Watkin Jones v Lidl UK GMBH [2002] HT 02/121

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

There is a dispute once money is claimed unless and until the Defendant admits that the sum is due and payable. Passive failure to admit suffices to constitute a dispute.

HHJ Moseley QC at the Cardiff Technology and Construction Court

11 January 2002

By a JCT Standard Form of Building Contract with Contractor's Design 1998 Edition incorporating various amendments, W agreed to demolish existing structures and construct a retail store for Lidl. Practical completion occurred on 22 June 2001.

On 17 July 2001 W submitted an application for payment no. 11 which it alleged was an application for an interim payment under the contract. Lidl made no payment and W served a Notice of Adjudication referring what they alleged was a dispute within the meaning of Section 108(1) of HGCRA to adjudication. The adjudicator ordered Lidl to pay W £345,264.99 plus VAT and also to pay the adjudicator's fees and expenses. In the period between the reference to adjudication and the decision Lidl had challenged the jurisdiction of the adjudicator. Lidl's challenge to the jurisdiction of the adjudicator was on the grounds that there was no dispute to refer to him. Following the adjudicator's decision W sought to enforce the award. Lidl contested the application for summary judgment on the ground that the adjudicator did not have jurisdiction to make the award on the basis that there had been no dispute in respect of which a decision was required.

In accepting W's argument that there was a dispute HHJ Moseley QC referred to where Swinton Thomas LJ stated "there is a dispute once money is claimed unless and until the Defendants admit that the sum is due and payable." W successfully argued that pursuant to the contract, failure to pay 20 days after the notice of the interim application (which was well before the notice of adjudication), constituted a dispute due to Lidl's non-payment. HHJ Moseley QC felt bound by to find that it was not necessary for Lidl either to refuse to answer or to reject a claim.  Passive failure to admit suffices to constitute a dispute.

Lidl had put forward an argument to the effect that in order to succeed in the adjudication W needed to prove 1) that it had made a valid application for interim payment and 2) that money was "due" to it pursuant to the interim application. Lidl did not explain how these arguments enabled Lidl to avoid the consequences of Section 108(3) of the Act or lead to the conclusion that the adjudicator had no jurisdiction under the Act: there was a dispute arising under a construction contract which W had a right under Section 108(1) to refer to adjudication; so the requirements of a valid reference were established. Further, any arguments that the adjudicator had failed to address the right question; i.e. whether W satisfied the burden of showing that it was entitled under the contract to receive payment for which it applied were rejected. HHJ Moseley QC considered that the adjudicator had answered the right questions.

On the basis of the above the application for summary judgment was successful.

There is a dispute once money is claimed unless and until the Defendant admits that the sum is due and payable. Passive failure to admit suffices to constitute a dispute.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

Click here to read full-screen | Click here to print the case