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One way to look at it
A firm working for Alfred McAlpine put a whole load
of different disputes in one basket and presented it to an
adjudicator … What happened next?
"John Redmond suggests that if an
adjudicator puts a sum of money into an interim account for a
variation, it is not a decision about the variation"
Here is a little quiz for you. How many
disputes are there in this letter between Chamberlain Carpentry &
Joinery and Alfred McAlpine Construction? The letter is a “notice
of intention to adjudicate” from Chamberlain, and it relies on the
adjudication rules in McAlpine’s own subcontracts. The question
about number is important because McAlpine says its rules, like
the Scheme for Construction Contracts, only allow one dispute per
adjudication. Assume that to be the correct interpretation.
Chamberlain’s notice says: “A dispute arises
under the subcontract as to the following matters.” It then gave a
long list of complaints. It asked for money to cover the wrongful
deduction of amounts included for acceleration of the works, the
wrongful deduction of amounts included for preliminaries, the
wrongful deduction of the alleged duplication of measured works …
and so on, all the way to prolongation costs and what it was paid
for its “security worm bolts”.
McAlpine’s response, by contrast, was simple.
It said “shoo” to the adjudicator: “You have no business on this
pitch because this is not a dispute, it is umpteen disputes; look
at all the separate complaints in the letter.” McAlpine said that
the adjudication rules were broken so the notice of adjudication
was invalid.
Now then, if you were the adjudicator, what
would you do? There you are, all puffed up as the referee, with
one team telling you to give up the job and the other telling you
to press on … This adjudicator stood firm. He said it was one
dispute so he would not shoo. Twenty-eight days later, he awarded
Chamberlain £56k to be paid forthwith. McAlpine said that since
the referee never had a right to be on the pitch, his award didn’t
count and it wouldn’t pay. And do you know that if it were right
about the number of disputes, it was right to give short shrift to
the award? Chamberlain called on the court for help.
The judge’s job was to decide how many disputes
had been sent to the referee. He started by looking at the “notice
of intention to adjudicate”. That is the first round fired in any
adjudication. It is supposed to give the nature of dispute,
details of where and when it arose and the nature of the redress
sought. The judge could also have looked at the second round
fired: the “referral”. That is, the bundle of documents that
present the dispute – in other words, who said what to whom. But
the judge said he would only look at the notice.
He said that it was up to the party that began
the adjudication to describe the dispute as it wished. What it
amounted to was then to be considered objectively. The assortment
of items in the notice was to be put into a matrix of fact so that
a “reasonable” person could ascertain its meaning against that
background. A natural and ordinary approach to a commercial
contract is to apply “business” common sense. I suppose that he is
asking what the parties involved meant by the words and phrases
used. He looked at the “redress” called for by Chamberlain, which
was “a decision as to the amount owing and due to us of the
amounts wrongfully withheld”.
Oh well, said the judge, the assorted list is
merely one firm asking another for a sum of money having regard to
the particular matters in the notice. It was one dispute.
He enforced the adjudicator’s award.
So, if this is just one dispute, what is the
status of each decision taken by the adjudicator on the way to the
overall decision? For example, if he allows something for the
prolongation claim in the list, is that a binding decision on that
bit of the dispute? Or are these “bit part” decisions merely
matters “taken into account” when making the big one? Can we still
bring the dispute about the prolongation to a subsequent
adjudication? Or has it already been adjudicated upon? John
Redmond’s book
Adjudication in Construction Contracts suggests that if an
adjudicator puts a sum of money into an interim account for a
variation that is being quarrelled over, it is not a decision
about the variation. That matter can still come as an
adjudication. This may be right. Interim valuations by the
employer’s QS often include a sum of money “on account” of a
quarrel yet to be sorted. This is best understood by thinking of
the adjudicator as a certifier with judicial overtones. In other
words he can “take into account” such matters as he sees fit to
give an interim certificate/decision/award, call it what you like.
So, if McAlpine wants to pick a fight with Chamberlain about one
of the bit parts, the door may be open – may.
Readers are invited to forward recent judgments for reporting
in this column (with full acknowledgement) to: Tony Bingham,
3 Paper Buildings, Temple, London EC4Y 7EU.
DX:007I LDE
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