Mecright v Morris [2001] HT 01 84

This summary was provided by CMS Cameron McKenna LLP.

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

In an Adjudication conducted pursuant to the Scheme, the jurisdiction of the Adjudicator derives from the Notice of Adjudication which may not be cut down or enlarged upon by matters referred to in the Referral Notice or other documents submitted during the course of the Adjudication. The scope may be enlarged by agreement or if it is a matter arising under the relevant contract which the Adjudicator considers is necessarily connected with the dispute.

His Honour Judge Richard Seymour QC, Technology and Construction Court

22 June 2001

Morris subcontracted the design, fabrication, supply and erection of structural steel work, roof decking and walling cladding at a retail park in Staffordshire to Mecright. The Scheme for Construction Contracts applied.

After some time Morris purported to cancel the subcontract on the basis that Mecright had failed to proceed in a reasonable and workmanlike manner. An Adjudication Notice was issued by Morris seeking a declaration that the subcontract was cancelled in accordance with the subcontract and seeking damages from Mecright arising out of the cancelled subcontract. Part of the Referral Notice addressed what sum was due to Mecright in respect of the execution of the subcontract works.

In its response to the Referral Notice Mecright made a claim for monies it said were owed to it for work done. The adjudicator asked Mecright to clarify this claim by a certain date. That date was subsequently extended on a final basis. Mecright did not respond until 2 days after the date set by the adjudicator. Morris did not reply because it believed that Mecright's response had been provided out of time and that the Adjudicator would ignore it.

In fact, the adjudicator awarded Mecright a sum for works carried out under the subcontract and Mecright's costs in the Adjudication. At the Enforcement Hearing, Morris argued that the Adjudicator had had no jurisdiction to award sums against Morris and that the decision was unenforceable because there had been a breach of natural justice in the procedure followed in the Adjudication. Morris argued that, under the Scheme, the jurisdiction of the adjudicator derives from the terms of the Notice of Adjudication. The Judge agreed but noted that the Scheme expressly provides that an adjudicator "may take into account any other matters which the parties to the dispute agree should be within the scope of the adjudication, or which are matters under the contract which he considers are necessarily connected to the dispute".

The Judge decided the essence of the dispute described in the Notice was, first, whether in the circumstances Morris had been entitled to determine its contract with Mecright, and if so, what sum Morris was entitled to be paid by Mecright in consequence of the determination. The Judge accepted that how much Mecright was entitled to be paid in respect of the execution of the contract work was not covered by the Notice of Adjudication.

The Judge rejected Mecright's argument that the Referral Notice could enlarge the dispute beyond that contained within the Notice of Adjudication. He also rejected Morris's argument that there had been a breach of natural justice because Mecright's submissions were provided late. The Judge said that Morris' decision to ignore Mecright's letter to the Adjudicator was a voluntary decision.

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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