Robert McAlpine (Sir) v Pring St Hill [2001] TCC 779

This summary was provided by CMS Cameron McKenna LLP.

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An adjudicator's decision under the JCT contracts is likely to be enforced, and a stay will not be granted, in circumstances where the defendant has a counterclaim which is the subject of an adjudication if no effective withholding notice has been served. The sum awarded by the adjudicator will be treated as an amount due under the contract.

Moseley QC

2nd October 2001, TCC

R was the main contractor for the construction of a building and engaged P as sub-contractor on JCT standard terms. The contract provided for the referral of disputes to an adjudicator and that the parties would give effect to the decision of the adjudicator. The adjudicator found that P had damaged glass, which had already been installed by R, during the sub-contract works and awarded damages in favour of R.

P had lodged a counterclaim which was still awaiting a decision from the adjudicator, a substantial part of which was not in dispute. R brought proceedings to enforce the adjudicator's award. P acknowledged that the decision was binding by virtue of s. 108(3) of the Housing Grants, Construction and Regeneration Act 1996, but submitted that it was entitled to set-off of the counterclaim and therefore judgment should not be entered for the amount awarded. Alternatively, P argued that payment of any sum should be stayed pending the outcome of the counterclaim before the adjudicator.

An issue arose as to whether s.111 of the 1996 Act precluded the right to set-off. P contended that s.111 did not apply, as the sum awarded by the adjudicator was not an amount due under the contract because no due date for final payment was given. Further, P claimed that s.111 did not apply to unusual circumstances of the instant case.

It was held that s.111 of the 1966 Act applied to preclude any set-off. There was no reason why it should not be applied to these circumstances. The provision of the contract that provided that the parties would comply with the decision of the adjudicator made the sum payable under the contract. Moreover, the adjudication was in accordance with the contract and, by ordering that payment be made within 7 days, the adjudicator had given a date for final payment. Finally, as R was entitled to judgment, a stay should not be imposed.

An adjudicator's decision under the JCT contracts is likely to be enforced, and a stay will not be granted, in circumstances where the defendant has a counterclaim which is the subject of an adjudication if no effective withholding notice has been served. The sum awarded by the adjudicator will be treated as an amount due under the contract

This summary was provided by CMS Cameron McKenna LLP.

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

 

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