Lathom Construction Ltd v Brian & Ann Cross [1999] CILL 1568 LTL 10/1/2000

This summary was provided by CMS Cameron McKenna LLP.

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

The court may not enforce an adjudicator's decision over a compromise agreement which is not a "construction contract."

HHJ Mackay, Technology & Construction Court

29 October 1999

AB engaged L for certain building works under JCT. '81. Upon a dispute arising over payment of interim payments, an adjudicator was nominated, but the parties were able to reach a settlement which was put into writing before he gave any decision. AB then wrote to L and said that it was a precondition of the settlement that £5,000 was to be withheld for work still to be carried out by L. As these works were not carried out, AB withheld the money.

L then took this further dispute to adjudication. The same adjudicator was nominated. L argued that the settlement was ineffective and sought payment under the original building contract. AB said that a settlement did exist and the adjudicator did not have jurisdiction to hear matters arising under the settlement agreement. The adjudicator agreed that a settlement had been reached but found that AB could not rely on this to withhold the money, and awarded sums to L. L issued an application for summary judgment; AB maintained its argument that the adjudicator did not have jurisdiction.

The basis for this argument was that the settlement agreement was a separate collateral contract; it was not a contract for the performance of "construction operations"; therefore it was not a "construction contract"; therefore there was no statutory right to adjudication.

The court held that once the adjudicator had found that there was a compromise in existence, there was plainly a triable issue and a reasonable prospect of AB successfully arguing that the adjudicator did not have jurisdiction to make any decision. Therefore, summary judgment was refused.

The court may not enforce an adjudicator's decision over a compromise agreement which is not a "construction 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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