Adjudication
The Project Consultancy Group v The Trustees of the Gray Trust (july 1999) TCC

© Daniel Atkinson 1999

In The Project Consultancy Group v The Trustees of the Gray Trust (July 1999) TCC  the issue was whether the contract had been entered into before 1^st May 1998.

It was held as a matter of statutory interpretation that a decision in respect of a contract which is not a construction contract at all, or which is a construction contract entered into before 1^st May 1998 is not a Statutory Adjudication decision and is not binding on the parties. It is open to a defendant in enforcement proceedings to challenge the decision of an adjudicator on the grounds that he was not empowered to make a Statutory Adjudicator’s Decision.

In order to succeed in Summary proceedings, it was held that the Defendant need only demonstrate that they have a real prospect of showing that the Adjudicator was wrong in holding that a contract was concluded after 1^st May 1998. In this case it was considered at least arguable that essential terms had not been agreed and that there was insufficient certainty of terms to support a contract. It was held that it was at least arguable that no contract was ever concluded. Since it was not possible to resolve these issues by summary process and without full evidence and argument the application for enforcement of the Adjudicator’s Decision by Summary Judgment was dismissed.

In deciding the issues, Mr Justice Dyson considered whether, by participating in the adjudication process, the defendants waived the jurisdiction point, and agreed to submit to abide by the decision of the Adjudicator on that issue. It was held that this was a question of fact. In this case the defendants had stated at the beginning that the Notice of Reference to Adjudication was invalid and that if the adjudication continued they would dispute the Adjudicator’s jurisdiction and put these issues before the Court in any enforcement proceedings. The defendant further stated that the defendant’s right to appear and present its case in the Adjudication was without prejudice to its position on jurisdiction. It was found that the defendant never departed from that position during the Adjudication and therefore did not submit to the jurisdiction of the Adjudicator.

The decision in The Project Consultancy Group shows that parties will need to consider carefully whether or not they consider the Adjudicator has jurisdiction and to make their position clear if they do not wish to be bound by his decision.

One further issue remains, which was raised but did not need to be dealt with in the above decision. What happens if the Adjudicator has dealt with the dispute referred to him, but for whatever reason has not dealt with a defence or a counterclaim? For instance there may be a defence of abatement because of defects in the work, or there may be a counterclaim which could be set-off against the claim. Will the Courts give Summary Judgment even in these situations, on the basis that these are matters which the payment provisions of the HGCR Act deal with? On the other hand will the Court decide that it would lead to injustice to give summary judgment when there is a real prospect of the claim being reduced or even extinguished by the defence or counterclaim?

In the above decision the question of abatement was raised but it was not necessary to deal with it to decide the application. We shall therefore need to wait and see the development of the law in this area.