Thomas-Fredric's (Construction) Ltd v Wilson [2003] EWCA Civ 1494

This summary was provided by CMS Cameron McKenna LLP.

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The question considered by the Court of Appeal was whether the parties in an adjudication were bound by the adjudicator's decision on the issue of whether he had jurisdiction to determine the dispute, one of the parties having claimed that the wrong party had been named as respondent in the adjudication. The Court of Appeal held that the parties would be bound if they had agreed to the adjudicator deciding the point, or if, in the absence of such agreement, the adjudicator's decision in that regard was plainly right.

Simon Brown, Judge and Jonathan Parker LLJ,
Court of Appeal
21 October 2003

Thomas Fredric's entered into a building contract with Wilson for works which were then carried out and for which they received payment from Wilson. A second contract was then entered into orally which was subsequently evidenced in writing. A dispute arose under the second contract, which was referred to adjudication. Wilson submitted in the adjudication that the claim had been made against the wrong party, the second building contract having been entered into not by himself but by a company, Gowersand Limited, of which he was company secretary. The adjudicator heard submissions from both parties on the issue. He decided that Wilson was the contracting party and that the he therefore had jurisdiction. The adjudicator subsequently awarded Thomas Fredric's various sums. Wilson refused to pay and Thomas Fredric's sought to enforce the decision by way of summary judgment.

In the Liverpool Technology and Construction Court, His Honour Judge MacKay held that the adjudicator had been asked to, and did, make a decision on the question of his jurisdiction and that in any event the evidence pointed "almost entirely substantially" to the contract having been entered into by Wilson personally. Wilson appealed.

Lord Justice Simon Brown, delivering the leading judgment, held that an adjudicator had the power to decide upon his own jurisdiction only if such power had been conferred upon him by the parties. In this case, such power had clearly not been conferred, and in fact Wilson had made it plain from the outset in the adjudication that he challenged the adjudicator's jurisdiction in this regard.

As to Judge MacKay's finding that the evidence clearly pointed to Wilson being the contracting party, Lord Justice Brown found that the evidence was far from compelling in this regard, as the letter which evidenced the second contract did not provide any evidence, let alone clear evidence, to the effect that Wilson rather than Gowersand Limited was the contracting party.

He concluded that two propositions should be applied, namely:

If the party challenging enforcement of a adjudicator's decision has submitted the adjudicator's jurisdiction in the full sense of having agreed not only that the adjudicator should rule on the issues of jurisdiction but also that he would then be bound by that ruling, he liable to enforcement of the decision in the short term, even if the adjudicator was plainly wrong on the issue.
If the party challenging enforcement had not submitted to the adjudicator's jurisdiction, he is still liable to enforcement if the adjudicator's ruling on the jurisdictional issue was plainly right.

On the facts, Wilson had not submitted to the adjudicator's jurisdiction and the adjudicator's findings were, if anything, plainly wrong. The appeal was therefore allowed.

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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