Tim Butler Contractors Ltd v Merewood Homes Ltd [2000] TCC 10/00

This summary was provided by CMS Cameron McKenna LLP.

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The question of whether a term or programme forms part of the contract is a dispute under the contract, and an adjudicator has jurisdiction to decide it. His decision will be binding upon the parties.

Mr Justice Gilliland, Manchester District Registry

12 April 2000

M placed an order with T for construction work. Correspondence between M and T indicated that the total cost would be £26,118, "payment interim valuations pre-agreed 90% material on site 28 day payments", with 5% retention. T also sent M a programme showing work commencing on 27 July and ending week commencing 16 August.

The first interim application was paid, but M refused to pay subsequent applications. No notices to withhold payment were served. M claimed that the contract period was specified or agreed to be three weeks. Therefore, according to section 109(1) of the Act, there was no right to interim or periodic payments.

An adjudicator was appointed under the Scheme, as the contract contained no adjudication provisions. The adjudicator decided that the parties had agreed upon price and date of commencement. He could find no evidence of an express agreement that the work period was less than 45 days (or on the duration of the works at all). There was no evidence of the parties agreeing on the programme duration.

T then attempted to enforce the adjudicator's decision, and M resisted. M argued that the adjudicator was clearly wrong. M also said that in fact the adjudicator did not have the power to make that type of finding. M said the adjudicator was trying to decide the meaning of an Act of Parliament to decide whether he had jurisdiction, and his mistake invalidated his decision. Therefore, the dispute was not one arising under the contract, but was a dispute about whether a term was or was not under the contract.

The Court decided that a question as to whether a term existed to allow for interim payments is a dispute as to the terms of the contract. An adjudicator has the power to decide such a dispute. This is a different question from whether a construction contract came into existence which involves a dispute as to jurisdiction to make any decision. The adjudicator's decision thus fell within his jurisdiction, and was binding upon the parties. This was the case even if his decision was wrong, although the Court declined to comment on if this was the case.

The question of whether a term or programme forms part of the contract is a dispute under the contract, and an adjudicator has jurisdiction to decide it. His decision will be binding upon the parties.

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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