Witney Town Council v Beam Construction (Cheltenham)
Technology and Construction Court 2011
If you start an adjudication, you naturally want to be confident that the decision will be enforced. Under the statutory Scheme for Construction Contracts, only one dispute can be decided in an adjudication, unless the parties agree otherwise. Many standard forms of construction contract take the same approach. This has led to jurisdictional challenges on the basis that more than one dispute has been referred. Construction disputes typically involve multiple issues, so how do you tell the difference between one, multi-issue, dispute and multiple disputes?
In this case, Witney Town Council had engaged Beam Construction (Cheltenham) to design and construct a new community hall. Witney took possession and opened the building on 6 January 2011, but did not accept that practical completion had taken place.
Beam returned to site to do some additional works, but also submitted a draft final account. In the next, interim, certificate no further payment was awarded and issues began to emerge between the parties regarding the works, the extension of time to which Beam was entitled and the correct level of retention to be withheld.
Beam submitted a revised final account, and Witney responded with a notice purporting to terminate the contract on the grounds that Beam had failed to proceed regularly and diligently.
Beam referred the matter to an adjudicator asking him to decide various questions over the draft and revised final account, the retention and the effect of Witney’s purported termination. Witney argued this was more than one dispute and reserved its position, but participated in the adjudication subject to its reservation.
The adjudicator found that practical completion had occurred on 6 January 2011 and awarded an extension of time to within three weeks of that date. He reached various conclusions on Witney’s complaints about workmanship and, having made the appropriate adjustments, awarded a sum to Beam.
In court, Witney argued that the decision should not be enforced because more than one dispute had been referred to the adjudicator. The judge disagreed. He said this was one dispute concerning the amount due to Beam, albeit with multiple issues. The fact that a dispute may “snowball” or expand before being referred to adjudication does not necessarily mean there is more than one dispute.
Peter Stockill’s analysis
The question of whether there is one or multiple disputes is highly fact sensitive, but in my experience, arguments that there are multiple disputes rarely succeed because the issues are usually inter-related. Two notable exceptions are:
- where the dispute related to two separate contracts for two separate sites: Grovedeck v Capital Demolition (2000); and
- where, on the facts, there was no connection between a claim for payment under a particular interim valuation and a claim for an extension of time: Bothma and another v Mayhaven Healthcare (2007).
In this case, the judge rejected the wider view that: “the ‘dispute’ is whatever claims, heads of claim, issues, contentions or causes of action…are in dispute which the referring party has chosen to crystallise into an adjudication reference.”
Instead, if you have to ask yourself whether there is more than one dispute, the key is to establish whether there is a clear link between the various matters in issue. The judge suggested, as a rule of thumb, that if a disputed claim cannot be decided without deciding all or part of another disputed claim, that points to them being parts of the same dispute rather than separate disputes.
For those drafting adjudication notices, make sure you refer to the matters in issue as one dispute and do not slip into referring to “disputes”, which might invite a challenge.
Peter Stockill MSc FCIArb is an associate in the construction team at law firm Berrymans Lace Mawer [email protected]
