Sherwood & Casson Ltd v Mackenzie HT99000188

This summary was provided by CMS Cameron McKenna LLP.

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

The court can examine a jurisdictional challenge on the basis that the dispute is the same or substantially the same as one previously referred to adjudication, but will only enquire if there are substantial grounds for showing the adjudicator erred. A claim for interim payment and a final account claim may not be the same.

HHJ Thornton QC, Technology & Construction Court

30 November 1999

S was a sub-contractor to M, under a contract incorporating the provisions of JCT. '80. The sub-contract contained no adjudication clause so the Scheme for Construction Contracts applied.

In the first adjudication, S sought payment of variations contained within an interim application and was awarded £6,631.30. It then submitted its Final Account which contained the same variations at a higher valuation (with more substantiation) and a claim for loss and expense caused in part by the variations. M did not pay, and S issued an adjudication for payment of its final account.

A different adjudicator was appointed. M argued that he should resign on the basis that the dispute was the same or substantially the same as one previously referred to adjudication (Para 9(2) of the Scheme). The adjudicator decided the disputes were not the same on the basis that payment on an interim claim and a final account claim were different. The adjudicator awarded a sum of £9,324.59, but dismissed the claim for loss and expense.

S applied to court for summary judgment, and M claimed that the adjudicator had no jurisdiction as he should have resigned. Thornton summarised the effect of cases to date and decided that in this case, the court could examine this question as it was a question relating to the adjudicator's jurisdiction: if the two disputes were substantially the same, the adjudicator would lose his authority to adjudicate. Unless a challenge is to jurisdiction, the court should enforce without further ado. The adjudicator could examine this question himself (similar to an arbitrator having power to determine his jurisdiction), but his conclusion would be open to challenge by the court.

Although this only affects Scheme adjudications as other Rules do not have this provision, the same jurisdictional question could arise elsewhere as there would be no dispute or difference in existence if there had been an adjudication on the matter in question.

The court should enquire into this question for the limited purpose of ascertaining if the disputes are substantially the same and should not look into the merits. The court will give considerable weight to the adjudicator's views and only enquire if there are substantial grounds for believing that the adjudicator had erred.

The court agreed that there was no overlap, the disputes were clearly different, and the decision was therefore made with jurisdiction. M also made challenges on the adjudicator's findings of fact, and the court decided that any challenge on the facts should be mounted at a subsequent arbitration.

The court can examine a jurisdictional challenge on the basis that the dispute is the same or substantially the same as one previously referred to adjudication, but will only enquire if there are substantial grounds for showing the adjudicator erred. A claim for interim payment and a final account claim may not be the same.

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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