Adjudication: three’s a crowd

In the case of Quadro Services Ltd v Creagh Concrete Products Ltd, the Technology and Construction Court (TCC) considered whether the claimant’s three applications for payment required three separate adjudications.

Background

Quadro Services Ltd (the claimant) entered into an oral agreement to provide construction labour to Creagh Concrete Products Ltd (the defendant). Throughout the project, the claimant made applications for payment and raised invoices for amounts said to be due and owing under the contract. However, three invoices were not paid (totalling £40,026). Two of those invoices were approved and no response was given to the third invoice. No payless notices were issued by the defendant in response to any of the invoices.

In the absence of pay less notices being served in relation to those invoices, sums falling due under the contract should be paid without deduction (assuming the invoices were valid and timely). Accordingly, the claimant commenced an adjudication in March 2021 on that issue.  

The defendant resisted the adjudication on the basis that the adjudicator didn’t have jurisdiction as the dispute referred to adjudication contained three disputes, one in relation to each invoice, and this was contrary to the statutory right to refer “a” (singular) dispute to adjudication (Section 108(1) of the Housing Grants, Construction and Regeneration Act 1996).

The adjudicator decided that one dispute had been referred to him, namely whether the total outstanding sum of £40,026 was due for payment. The defendant did not take any further part in the adjudication and the adjudicator issued his decision awarding the claimant the sums claimed.

The defendant did not comply with the adjudicator’s decision and the claimant issued proceedings in the TCC to enforce that decision.

In the TCC proceedings the claimant and defendant repeated their positions in the adjudication.

Decision

Her Honour Judge (HHJ) Sarah Watson held that the adjudicator was correct to conclude that he had jurisdiction because only one dispute had been referred to him i.e. whether the claimant was entitled to payment of £40,026,

The judge acknowledged that the adjudication involved consideration of three separate invoices. However, she confirmed that “a dispute” can include multiple sub-issues, even if those sub-issues could also be decided in isolation from each other.

Further, the judge noted that the defendant had not disputed the validity of the invoices or issued any pay less notices, it had simply not paid.

Conclusions

This judgment is a timely reminder to consider the meaning of “a dispute” and the framing of the relief sought when adjudicating a dispute (which in many cases may be multi-faceted).

Parties (and adjudicators) should look at the facts and apply common sense when considering  whether issues are in fact distinct disputes or aspects of one dispute. To use the example given by Judge Akenhead in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC), 50 variations which formed part of one application for payment may be one dispute.

By contrast, if an adjudicator is asked to consider a number of sub-issues independently, rather than in relation to an overarching question, a challenge to jurisdiction may be made.

In this case, HHJ Watson observed that if the defendant’s argument was accepted, this would lead to parties incurring “very significant cost and inconvenience of numerous separate adjudications to recover a single claimed balance under a single contract” which would conflict with the purpose of adjudication: to provide swift, cost-effective solutions to disputes.