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Claims under Three Payment Applications are a Single Dispute for the purpose of Adjudication

Construction / 10 December 2021

A new decision from the TCC provides useful confirmation affirming adjudication as the construction dispute forum of choice allowing for a quicker and more cost-effective route to recover debts on construction contracts. The key issue in Quadro Services Limited (“Quadro”) v Creagh Concrete Products Limited (“CPP”) [2021] EWHC 2637 (TCC) was whether a claim for three outstanding payment applications was a single dispute under the Housing Grants, Construction and Regeneration Act 1996 or multiple disputes. This decision means parties can avoid the cost and inconvenience of pursuing numerous adjudications where several payments are outstanding. The decision also shows that courts are continually supporting the adjudication process in the face of technical challenges.

Factual Background
In this case Quadro entered into an oral agreement for Quadro to provide construction labour to CPP (the “Contract”). The Construction Act and the Scheme for Construction Contracts (England and Wales) Regulations 1998 applied as the Contract did not contain adjudication provisions.

During the Contract, Quadro made several payment applications and raised invoices for the amounts claimed. CCP did not issue any pay less notices in response to Quadro’s applications. CCP’s Quantity Surveyor had approved the first and second invoices but did not respond to Quadro’s request for approval of the third invoice.

CCP did not pay the amounts that were outstanding, so Quadro commenced an adjudication for the payment of the three outstanding invoices. CCP argued that Quadro’s three payment applications should be the subject of three separate adjudications. Consequently, the adjudicator lacked jurisdiction and his decision awarding the full amount claimed should not be enforced.

Decision
The judge, Her Honour Sarah Watson sitting in the TCC in Birmingham disagreed applying the principles in Witney Town Council v Beam Construction (Cheltenham) Limited (2011) and Prater Limited v John Sisk & Sons (Holdings) Limited (2021) to the facts and concluded that the adjudicator was right to decide he had jurisdiction. The judge considered that one dispute could include numerous sub-issues which may be capable of being determined independently from each other. In this case it was three payment applications that CCP had “simply not paid” and which were part of the dispute in total over the sum that was due to Quadro.

The judge also made the point that if she accepted CCP’s argument then parties would incur “very significant cost and inconvenience” if they had to start numerous adjudications to recover “a single claimed balance under a single contract”. That would be contrary to the policy underlying adjudication to provide “a process of efficient, swift and cost-effective resolution of disputes on an interim basis”.

This decision  will not be a surprise to seasoned practitioners of adjudication, but it serves as a useful reminder of the meaning of “a dispute” where adjudications concern multiple payment applications and ammunition when met with such a challenge.

If you have a claim which is rumbling please do reach out to our highly experienced construction team for advise on your options.

 

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This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoodsgrm.co.uk

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