Source: http://www.fenwickelliott.com/files/docs/articles/html/law_enforce.htm
Timestamp: 2014-10-21 11:53:47
Document Index: 444012458

Matched Legal Cases: ['art 2', 'art 3', 'art 24', 'art 24', 'EWCA ', 'art 8', 'art 8', 'art 8', 'art 8', 'art 8', 'art 8', 'art 7', 'art 8', 'art 8', 'art 8', 'art 8']

Adjudication Law: Enforcement and Jurisdiction
Centre of Construction Law & Management MSc/Diploma in Construction Law & Arbitration, King’s College London
The Housing Grants Construction and Regeneration Act 1996 (“the Act”) has been with us now for over 5 years. At least 170 cases have been reported, although many of them unofficially, in respect of predominantly adjudication but also the payment mechanisms. This paper focuses on three main aspects. First, a short overview and a review of some general developments in the area. Second, issues relating to enforcement. Finally, a review of some jurisdictional challenges.
Part II of the Act came into force on 1 May 1998. Many of the standard forms were amended so that they were “Act” compliant in respect of entitlement to stage payments, identification of an amount due, the serving of withholding notices, the introduction of a right to suspend performance for non-payment, the prohibition of pay-when-paid clause (save in respect of insolvency) and finally the incorporation of adjudication provisions. At the time that the Act was brought into force, it was adjudication that created the vast majority of interest. Initial questions about the enforceability of an adjudicator’s decision were swept away in the first case of Macob Civil Engineering Limited v Morrison Construction Limited (12 February 1999), but few of the early decisions dealt with payment mechanisms or the payment notices in the Act.
1. Overview and recent developments
Once the Act was brought into force on 1 May 1998, the key question was whether the courts would enforce a decision of an adjudicator. Section 108(3) of the Act states that the “contract shall provide that the decision of the adjudicator is binding …”. At the time, there was some concern about the appropriate way to enforce a decision of an adjudicator, and in particular whether summary judgment would be available or whether the court would hear the matter afresh in a full trial thus defeating the purpose of adjudication. The first case of Macob Civil Engineering Limited v Morrison Construction Limited swept away those concerns. The Hon. Mr Justice Dyson delivered his judgment on 12 February 1999 confirming that the decision of an adjudicator is enforceable summarily regardless of any procedural irregularity, error or breach of natural justice. The judge adopted a purposive approach to the construction of the word “decision”, refusing to accept that the word should be qualified. The judges in the majority of the cases following Macob adopted a similar approach, enforcing adjudicator’s decisions that had found their way to the courts. The robust and purposive approach was reinforced by the first Court of Appeal decision of Bouygues v Dahl-Jenson (UK) Limited. The Court of Appeal delivered its judgment on 31 July 2000, upholding the first instance decision of Mr Justice Dyson. They confirmed that the purpose of the adjudication procedure set out in Section 108 of the Act was to provide the parties to a construction contract with a speedy mechanism for resolving disputes, which although not finally determinative, could and should be enforced through the courts by way of summary judgment. More importantly, even where an adjudicator had answered the question put to him in the wrong way, the court would not interfere with that decision but would enforce it. The decision of an adjudicator was and is being treated much like the decision of an expert resulting from an expert determination. Providing that an expert, and by analogy an adjudicator, has asked the right question then the decision will be enforced regardless of any errors made along the way. Only if the expert and therefore the adjudicator were to ask the wrong question would the decision be a nullity, because the adjudicator would not have jurisdiction to answer that “wrong” question.
The robustness of the courts in dealing with a great many of the jurisdictional challenges and the court’s willingness to enforce adjudicator’s decisions by way of summary judgment must certainly have contributed to the enormous growth and widespread use of adjudication. Recent research suggests that the number of adjudications arising from nominations by the Adjudicator Nominating Bodies (“ANBs”) amount to just over 6,000 in the UK.(1) This figure arises purely from ANB appointments. Many ad hoc adjudications are now taking place, and the figure may well be far in excess of 6,000, perhaps being as high as around 10,000.(2) The courts have now heard at least 170 cases relating solely to adjudication. A simple comparison between the figures suggests that adjudication is successful and effective. In other words, arguably only 1% of the disputes referred to adjudication progress to the courts for the purposes of enforcement.
DTI Consultees on “Improving Adjudication in the Construction Industry” On 14 August 2001 the DTI issued a proposed amendment to the Scheme for Construction Contract, and also draft guidance to adjudicators. The draft guidance had been prepared by the Construction Umbrellas Bodies Adjudication Task Group. The consultation draft guidance to adjudicators was to be “treated as suggestions to adjudicators rather than rules.” It was primarily drafted for adjudications conducted pursuant to the Scheme, but the guidance is generally applicable. The guidance note covers 7 main areas:
The parties' costs; and
Clerical mistakes or errors.
The guidance reminds adjudicators that natural justice is not a defined term, but requires that any tribunal (including an adjudication tribunal) that is acting in a judicial manner must be fair in all of the circumstances. There are two main limbs to this requirement. First, bias in that the decision maker should not have, nor appear to have, any direct interest in the dispute.
Second, there must be a fair hearing. Basically, this means that where one party makes an allegation against the other, that other party should have a reasonable opportunity of answering the allegations made. The guidance then goes on to suggest how, in practical terms, an adjudicator might comply with the requirements of natural justice. These include, for example, using telephone conferencing to involve all of the parties should the use of the telephone be necessary, holding meetings with all of the parties present (unless an absent party has consented to a meeting between just one party and the adjudicator) and obtaining the views of the parties before issuing directions.
Jurisdictional challenges cannot be avoided, but adjudicators are reminded that they should investigate and reach their conclusion on the merits of any jurisdictional challenge. If the adjudicator believes that he or she does not have jurisdiction he or she should tell the parties and resign. If the adjudicator believes that he or she does have jurisdiction, then he or she should tell the parties and continue with the adjudication. Of more interest is the guidance in respect of intimidatory tactics. Adjudicators are reminded to recognise “bullying” tactics early on in the procedure, and deal with them “firmly but fairly”. They are reminded not to loose their temper with any of the parties. The draft statutory instrument, the Scheme for Construction Contracts (Amendments) (England) Regulations 2001 makes three amendments to the Scheme. First, regulation 20, is to be amended. Regulation 20 is set out below, with the new wording set out in italics:
The Adjudicator shall decide the matters in dispute. He 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 with the dispute but shall not take into account any matter relating to the legal or other costs of the parties arising out of or in connection with the adjudication.
The purpose of this amendment is to remove from the adjudicator’s jurisdiction the ability for the adjudicator to deal with the parties’ costs associated with bringing or defending an adjudication. The case law in the area is conflicting, and so clarification is welcome, however, the preferred view is that adjudicators do not have the jurisdiction to deal with costs.(3) While this amendment deals with adjudications under the Scheme, other standard form adjudication procedure and perhaps more importantly bespoke adjudication procedures will not be caught by this amendment. To be truly effective, clarification in respect of legal costs would need to be included in the Act.
1. Glasgow Caledonian University Reports on Adjudication No. 3/4
2. Miller, J. (2002) Adjudication Update Seminar, Savoy Hotel, 13 May.
The second amendment in the draft SI is an amendment to regulation 22. If one of the parties requests reasons, then the adjudicator shall provide them. Alternatively, the adjudicator may set a deadline for the parties to request reasons, and any requests outside of that deadline shall be invalid. Finally, new draft regulation 22A deals with clerical mistakes or errors. This draft regulation gives the adjudicator on his or her own initiative or an application of any of the parties the ability to correct his or her decision in order to remove clerical mistakes or errors “arising from an accidental slip or omission”. A party must make an application within 5 days of the date of the decision, or a shorter period specified by the adjudicator in the decision. The adjudicator is then to correct the decision “as soon as possible” after the date upon which the application for the correction was received by the adjudicator. If the correction is to be made by the adjudicator on his or her own initiative, then it is to be made as soon as possible after he or she becomes aware of the need to make such a correction.
New TeCSA Rules
A new version of the Technology and Construction Solicitors Association TeCSA Adjudication Rules (2002 version 2.0) was published in October 2002. The new TeCSA Rules are very similar to the 1999 (version 1.3) Rules, although there are of course some slight amendments. In the definition section, a definition of “days” has been inserted, stating that the meaning should be the same as that contained in the Housing Grants, Construction and Regeneration Act 1996. The commencement and appointment procedure has been amalgamated, and some amendments have been made. The application for appointment in Rule 5(i) has been simplified, merely requiring a copy of the Contract as defined, together with the Notice of Adjudication and the fee to be attached to the request for an appointment. Rule 7 now requires the adjudicator to confirm to the parties the date of receipt of the Referral Notice. Similarly, Rule 8 now requires any replacement adjudicator to give written notice of acceptance of his appointment.
In respect of the scope of the adjudication, Rule 14 now requires an adjudicator to “decide” upon his substantive jurisdiction rather than “rule” upon jurisdiction. In respect of the adjudicator’s fees the cap of £1,000 per day has been increased to £1,250 per day.
The law relating to the costs of parties in respect of adjudication has developed, and this has been reflected in a new section dealing with costs. Rule 28 states that the adjudicator can have the jurisdiction to award costs to the successful party, but only if the parties agree. This appears to reflect the general position. However, the adjudicator has no jurisdiction to require the referring party to pay the costs of the other party merely by referring the dispute to adjudication. This is notwithstanding anything to the contrary in the contract. Finally, in respect of decisions Rule 31 has been amended to require the adjudicator to provide reasons should either party so requests. Old rule 27 stated that decisions were to be in writing, but did not include reasons. However, request for reasons under the new rules must be made within 7 days of the date of the referral of the dispute. A request at this early stage allows the adjudicator to prepare his reasons and provide them at the same time as the decision. New rule 32 provides the adjudicator with power to correct a clerical mistake or error arising from an accidental slip or omission. The adjudicator may correct the mistake or error on his own initiative, or as a result of an application by either of the parties. The party must make its application within 5 days of the decision or the shorter period directed by the adjudicator. The correction is to be made as soon possible after the application being received or as soon as the adjudicator notices mistake or error.
The New Zealand Construction Contracts Bill
Following the repeal in 1987 of the Contractors Liens Act 1939 and the liquidation several large development companies (which left contractors and subcontractors unable to recover substantial sums of money), the New Zealand Parliament decided it was time to overhaul the way payments operate within the construction industry. There is apparently a strong political force behind this legislation, predominantly led by the labour party who are pushing the bill through the legislative process with some speed following the introduction of the CCB prior to the 2002 election.
The New Zealand Construction Contracts Bill (CCB)(4) is based on the United Kingdom Housing Grants, Construction and Regeneration Act 1996 and the New South Wales Building and Construction Industry Security of Payment Act 1999.
3. Northern Developments (Cumbria) Limited v J & J Nichol (24 January 2001)
At this stage, the CCB is likely to be law in New Zealand by 2004. Unlike the HGCRA which had a two-year lead-in time, the CCB will become law three months after it receives Royal Assent. This does not leave the industry with much time to revise their standard form contracts to ensure compliance with the CCB.
The philosophy behind the CCB is similar to that of the HGCRA, namely to improve cash flow within the construction industry. There are some important differences in the New Zealand bill including:
The HGCRA requires contracts to be in writing, but the CCB applies to every construction contract (whether or not governed by NZ law) that relates to the carrying out of construction working in NZ and that is entered into after the date of commencement of the Act and is written or oral or partly written and partly oral.
The CCB will apply to residential construction contracts in relation to rendering ‘pay-if-paid’ and ‘pay-when-paid’ clauses void and introducing adjudication provisions. The CCB specifically outlaws ‘pay-if-paid’ and ‘pay-when-paid’ clauses. While this was intended to overcome the problem of contractors using these provisions to avoid paying subcontractors, the concern within the NZ construction industry is that this provision has simply increased the risk to contractors with the inevitable outcome that contractors will be forced into liquidation when a developer becomes insolvent, as the contractor is still obligated to pay the subcontractor for the work done. Despite submissions from the industry that pay if/when paid clauses remain effective in circumstances where the owner is insolvent (as in the HGCRA), the Select Committee expressly rejected this on the grounds that the risk of payment should be transferred from subcontractors to contractors arguing that contractors are better able to protect themselves.
The CCB has taken into account the practice developing within the UK whereby the party in a superior bargaining position requires the contract to provide that the other party must bear all the adjudication costs regardless of fault or outcome. The CCB expressly provides that such clauses are ineffective.
The CCB provides that an adjudicator may determine that costs be met by any of the parties if the adjudication considers that the party caused these costs to be incurred unnecessarily by bad faith or allegation that are without substance or merit.
The CCB reaches a midpoint in relation to the time within which an adjudicator is required to reach a decision. The New South Wales legislation requires a decision within 10 working days, the HGCRA within 28 days. The CCB provides that a decision must be reached within 20 working days (able to be extended by the adjudicator to 30 working days if he/she thinks necessary or longer with the consent of all parties).
Numerous submissions were received on the first draft of the bill which suggested that the CCB include mandatory bonding provisions of approximately 10% of the contract price. The Select Committee declined to include mandatory bonding at this stage on the basis that the introduction of mandatory bonding would require further research. It did not dismiss the possibility that the legislation may be amended in the future to include mandatory bonding.
The CCB provides that an adjudicator can use a charging order over third party properties to secure payment in certain circumstances.
The RICS Guidance Note, Surveyors Acting as Adjudicators in the Construction Industry, was prepared after the issue of the DETR consultation paper, Improving Adjudication in the Construction Industry, in April 2001. The Guidance Note is intended to set out best practice for RICS members when acting as adjudicators. The members are not required to adhere to the Guidance Note, but should an allegation of professional negligence be made against an RICS member then the court might well take into account the content of the Guidance Note when deciding whether the surveyor acted with reasonable competence. The Guidance Note provides an overview of the role of an adjudicator and the principles of adjudication, and so does not provide a detailed consideration of all of those matters that an adjudicator will need to understand in order to practise. Part 2 of the Guidance Note deals with appointment and acceptance. The RICS nomination procedure is set out, but also the adjudicator is reminded of his responsibilities, such as the need for a decision within a limited timescale and the requirement to carry out a conflict check. In respect of the conditions of engagement, the RICS Guidance Note states that the imposition of a lien in respect of the adjudicator’s fees is not an acceptable practice.
Part 3 deals with procedures and other matters. The powers available to an adjudicator are briefly set out, and the adjudicator is reminded that he or she may take legal or technical advice if necessary. While the guidance recognises that it may be appropriate to discuss substantive matters in dispute with one party alone, it reminds the adjudicator that such a course of action is “fraught with possible difficulties and one which is probably best avoided”. Practical tips in respect of establishing the procedure and establishing the facts and the law are set out. As indeed is the debate in respect of natural justice. Some of the practical tips given in the DTI draft guidance are also considered, such as dealing with excessive documentation and intimidatory tactics.
In respect of the adjudicator’s decision, the adjudicator is reminded of the short timescale, but also given practical guidance as to the suggested contents, awarding of interest and the giving of reasons.
Section 108(3) of the Act states:
The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agreed to arbitration) or by agreement.
Unlike the Arbitration Act 1996, the Act does not state that the decision of an adjudicator may be enforced in the same manner as a judgment of the Court or in the way that an arbitrator’s award may be enforced. There was, therefore, some debate about how an adjudicator’s decision may be enforced shortly after the introduction of the Act in May 1998. That debate was in part swept away by the first case of Macob. Since Macob, the frequent practice of enforcing a decision of an adjudicator has been to commence proceedings in court (usually the TCC) and then immediately apply under CPR Part 24 for summary judgment.
The grounds for summary judgment are set out in CPR Rule 24.2:
(a) it considers that: i) that claimant has no real prospect of succeeding on the claim or issue; or ii) that defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed at trial.
The claimant, when contending that the decision of an adjudicator should be enforced summarily therefore has to satisfy two hurdles. First, that the defendant has no real prospect of successfully defending his failure to comply with the decision, and the second, there is no other reason why the case should not go for trial. If successful then the judgment may be enforced like any other court judgment. The prospect must be “real” in that the court will ignore arguments that are fanciful or imaginary. It essentially means that the defendant has to have a case which is better than nearly arguable (International Finance Corporation v Ute african SRPL, [2001] LTL May 16).
On the other hand, one does not need to show that the case will probably succeed at trial. The hearing of a summary judgment application is not a “mini trial” nor a “summary trial”. The court only considers the merits of the case to the extent necessary to determine whether there is sufficient merit to allow the case to proceed to trial (see Lord Woolf MR in Swain v Hillman [2001] All ER 91). For a defendant to successful obtain the dismissal of the application he must show that his chances of success of trial are “realistic” rather than “merely fanciful” (Swain v Hillman).
The large majority of cases dealing with the enforcement of an adjudicator’s decision are dealt within under the summary judgment procedure set out at CPR Part 24. The initial cases before the court dealt with enforcement issues in a very purposive and robust manner, and that trend has in the main continued. In one of the early adjudication cases Outwing Construction Limited v H. Randell & Son Limited (15 March 1999), His Honour Judge Humphrey LLoyd QC found that it was acceptable for a claimant to abridge time for service for acknowledgment to just two days after the return date of the summons and abridge time down to 7 days for the defendant to adduce evidence in opposition to the summons when applying for summary enforcement of an adjudicator’s decision. His Honour Judge LLoyd QC made it clear that it might not be appropriate to abridge time in every case, but the practice is now frequently followed. There may also be an express contractual provision requiring payment. For example, Lord Justice Mantell in the case of Levolux AT Limited v Ferson Contractors Limited [2002] EWCA Civ 11 held that the terms of the contract must be construed so as to give effect to the adjudicator’s decision. In doing so he held that the determination clauses must be read as not conflicting with an adjudicator’s decision, but also noted that the parties had expressly agreed to be bound by the decision of an adjudicator. While summary judgment may be given for the whole of the claim or a particular issue, it may also be advisable to consider requesting an interim payment application at the same time as seeking summary judgment. This would only occur if there were some doubt as to the enforceability of the adjudicator’s decision, and it appeared clear that in any event an amount of money should be paid because of an absence of a defence for a particular sum. Providing a request for an interim payment is made (usually at the time of applying for summary judgment) then the court may if the summary judgment is unsuccessful order a payment in any event (see Glencot Development & Design Co Limited v Benn Barratt & Son (Contractors) Limited [2001] BLR 207). Part 8 Proceedings
Part 8 of the Civil Procedure Rules is described as an “alternative procedure for claims”. A claimant may use the Part 8 procedure where “he seeks the court’s decision on a question which is unlikely to involve a substantial dispute of fact” (Part 8.1 (2) (a)), or a rule or practice direction requires (or omits as the case may be) the use of the Part 8 procedure. The practice of commencing proceedings under the alternative Part 8 procedure is now more common than the “regular” Part 7 claim form procedure. This is because the court’s is quite simply looking to see whether the adjudicator had jurisdiction to make the decision, and would generally then enforce the decision without a consideration of facts even if the adjudicator has made some intra vires fundamental factual or legal error. Providing that the adjudicator had jurisdiction and the appropriate procedures had been followed then the question is usually quite simply one of jurisdiction and procedure and the facts of the dispute are irrelevant. Part 8 proceedings are now bring widely used. For example, the Part 8 proceedings were found to be appropriate in Shimizu Europe Limited v Auto Major Limited [2002] BLR 113. Shimizu issued Part 8 proceedings seeking enforcement. Two issues arose. First, should the decision be enforced, and second, did Auto Major waive any objection by making a part payment. His Honour Judge Seymour QC held that the Adjudicator had been asked to decide what sum should be paid, and so any mistake that might have been made by the Adjudicator did not go to his jurisdiction. The Adjudicator had essentially asked the right question. If a mistake had been made, then the place to correct it was in the final account or by arbitration. As a result His Honour Judge Seymour QC held that the Part 8 proceedings were appropriate. In any event, Auto Major had by making a part payment and inviting the Adjudicator to correct the Decision elected to treat the whole of the Decision as valid and waived its objection. Statutory Demand and Winding Up Proceedings
The Insolvency Act 1986 provides pursuant to Section 122(1) (f) that a company may be wound up on the grounds that it is unable to pay its debts. The question as to whether a company can pay its debts is not made by reference to the company’s accounts, but is determined by the situations listed at Section 123 of the Insolvency Act 1986. Providing that one of those situations exists, then the Court can accept that as evidence of an inability for a company to pay its debts. The key event is:
If a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at the company’s registered office, a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor
The written demand in the prescribed form is referred to as a “statutory demand”. A statutory demand is not issued under the Civil Procedure Rules, but pursuant to the Insolvency Act 1986. The term “debt” refers to a sum payable under a contract or a judgment where the amount is clearly specified. A statutory demand should therefore not be used if the amount cannot be readily identified at the start. Adjudicator’s decisions usually specify a precise amount for payment, and therefore lend themselves to the statutory demand process.
In the case of George Parke v Fenton Gretton Partnership (2001) CILL 1712 His Honour Judge Boggis QC in the Chancery Division had to consider whether to set aside a statutory demand served by the Defendant seeking payment of an Adjudicator’s Decision. Mr Parke was arguing that he had a valid cross-claim exceeding the amount of the Adjudicator’s Decision. He argued that he had commenced proceedings in the Technology and Construction Court for the recovery of the alleged overpayment. HHJ Boggis QC had to consider whether the demand should be set aside. Rule 6.5(4) of the Insolvency Rules 1986 set out the grounds upon which a statutory demand may be set aside:
If the Debtor has a counterclaim equalling or exceeding the debt
If the Creditor holds security in respect of the debt; or
If the Court is satisfied on other grounds that the demand ought to be set aside. The Judge initially made the point that the decision of an adjudicator should be enforced summarily and that the Court should not consider the facts behind the Decision. However, he also had to consider the competing fact that Mr Parke had commenced proceedings for a declaration that he had overpaid the Fenton Gretton Partnership. His Honour Judge Boggis QC held that Mr Parke had a valid cross-claim which was confirmed by his claim in the Technology and Construction Court proceedings. He therefore decided that the statutory demand ought to be set aside. The same question arose in the case of Oakley & Anor v Airclear Environmental Limited & Anor (4 October 2001). The parties had intended to enter into a NAM/T form of contract, but no formal contract was ever concluded. A dispute arose which was referred to adjudication. The adjudicator decided that Oakley should pay a sum of money to Airclear. Oakley refused and a statutory demand was issued by Airclear. Oakley argued that no contract was every concluded and therefore the adjudicator did not have jurisdiction because the contract was not evidence in writing as required by section 107 of the Act. Etherton J held that while the parties shared an assumption that the agreement was based on the NAM/T form, there was nothing to stop Oakely from disputing that assumption. He held that the contract was not based on the NAM/T form. Therefore the adjudicator had not been validly appointed (as he had been appointed under the provision of the NAM/T forms which did not apply) and so his decision was null and void. The statutory demand was therefore not based upon a debt and was set aside. The case of Guardia Limited v Datum Contracts (2003) CILL 1934 concerns winding-up petitions. Datum had carried out refurbishment work to a shop. Guardia claimed that there were defects and withheld payment, but failed to serve a valid withholding notice. The dispute was referred to adjudication. Guardia did not pay, and Datum served a statutory demand, and then issued a winding-up petition. Guardia successfully obtained an ex-parte injunction restraining advertisement of the petition. Such injunctions are only given for a limited period, and Guardia sought continuation of the injunction on the basis that the statutory demand and petition were an abuse of process because Guardia had a cross-claim.
The insolvency rules state that the grounds for restraining advertisement of a winding-up petition are:
(i) The court is satisfied that the presentation of the petition represents an abuse of process on the part of the petitioner because the debt asserted is disputed to the knowledge of the petitioner on substantial grounds and in good faith; or (ii) The court is certain that the petition is bound to be dismissed
Mr Justise Ferris in the Chancery Division held that none of these conditions were applicable. Essentially he noted that the continuing restraint of the petition would leave Guardia in the same position they would have been in if they had served a valid withholding notice. Further, Guardia had presented their cross-claim very late. He therefore refused to extend the injunction. The position in Guardia should be compared to that of Parke v Fenton, where the Court considered the counterclaim was genuine and had been commenced without delay. In, Parke v Fenton, Parke had already commenced proceedings in the Technology and Construction Court. Finally, there is the more recent case of Jamil Mohammed v Dr Michael Bowles (11 March 2003). In that case the Adjudicator decided that the Claimant contractor should pay the sum of £26,495.54 to Dr Michael Bowles, the Employer in respect of defective work. The contractor did not pay and Dr Bowles served a statutory demand. Jamil Mohammed applied to set the demand aside. Several grounds were raised.
First, he argued that the Adjudicator did not have jurisdiction as the contract related to a residential occupier. Ms Derrens held that the Minor Works Form of Contract governing the parties' agreement contained an adjudication clause, and therefore the exception within the Act was irrelevant. She went onto say that if the applicant believed that to be the real issue then the applicant should have applied to the court for a declaration. She said that it was not for the bankruptcy court to look behind the Adjudicator’s decision, and that an Adjudicator’s decision was sufficient to form a basis for a statutory demand.
In Macob Dyson J, as he was, stated that a mandatory junction would not be the appropriate remedy in respect of payment between contracting parties. This appeared to be a retreat from the position in the pre-Act case of Drake & Scull Engineering Limited v McLaughlin & Harvey Plc (1992) 60 BLR 102, in which the Court granted a mandatory injunction requiring compliance with the award of a contractually appointed adjudicator. However, that case can be distinguished. In the earlier case of Drake & Scull the Adjudicator’s decision required payment of the amount to a third party trustee stakeholder pending final determination of the dispute. The position with third parties is therefore different to that between contracting parties. Dyson J in Macob noted that there were other examples of situations where an injunction might still be appropriate. He cites, decisions of an adjudicator ordering a party to return to site in order to continue work to provide access or inspect facilities, to open up work, or to carry our certain specified work.
Most of the 170 or so cases arising from adjudication turn upon the specific facts of the particular case. The majority of those cases adopt the purposive and robust approach of His Hon. Mr Justice Dyson in Macob. But has this trend continued? Some have questioned whether the courts are now taking a more restrictive view, perhaps to “reign in” the process of adjudication and reinforce the checks and balances that one would normally expect to see operating within the dispute resolution arena. There are, of course, those jurisdictional challenges that will remove any chance of enforcing the adjudication decision. For example, the ability to demonstrate that there was no contract, that the adjudicator asked the wrong question, or rather that he did not answer a question put