Adjudication
Elanay Contracts Ltd v The Vestry (2000) TCC

© Daniel Atkinson 2001    22 January 2001

Elanay Contracts Limited –v- The Vestry (2000) TCC was an application for enforcement of an adjudication decision in which three important issues were decided.

The first issue was whether an issue estoppel was raised if summary judgment was given. It was submitted that all the matters pleaded will be decided by the judgment in summary proceedings and that therefore it would not be possible for the issues to be raised in other proceedings.

Reference was made to in the House of Lords, Arnold v Nat West Bank Plc (1991) 2AC. 93 at 105 in which Lord Keith of Kinkel said:

"Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue."

Reference was also made to Lord Justice Diplick in Thoday v Thoday, who made a similar point:

"There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action."

His Honour Judge Harvey QC held that from the passages cited, the particular issue had to be a necessary ingredient in the cause of action and had to have been litigated and decided.

It was held that in the instant case, it was quite unnecessary for the claimant to have pleaded their claim in the ways they had, because the basis of the claim, as set out in the prayer, was simply and solely the fact of the adjudicator’s decision. If summary judgment was given in this matter, it would not create any issue estoppel in relation to anything except the fact that the decision was made.

The second issue arose from the fact that if payment in accordance with the adjudicator’s decision was ordered, there would have to be proceedings for restitution, requiring a change in position. For example, if the monies had been dissipated, there would be problems tracing. The dispute that was before the adjudicator would not be finally determined by legal proceedings: it would be a different dispute.

It was held that any defence of dissipation of the monies would not be allowed to prevent recovery of monies which the court held had been wrongly ordered to be paid by an adjudicator. Effect was to be given to Section 108(3) of the Housing Grants, Construction and Regeneration Act 1996 even though the nature of the further proceedings brought by the paying party would be different in some material respects.

The third issue was in relation to the European Convention on Human Rights, Article 6. Reference was made to a case before the European Court of Human Rights Donbowbeher BV v Netherlands which referred to the requirement of equality of arms for the purpose of a fair hearing in the sense of a fair balance between the parties.

"Each party must be afforded a reasonable opportunity to present his case, including his evidence, under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent."

The Vestry argued that it was labouring under difficulties in the adjudication, partly due to the fact that much of the time of the principal person involved with the Vestry was spent in hospital, visiting his dying mother, and also due to the late delivery of documents produced by the other side in the adjudication.

It was found that the procedure had to be completed within 35 days. It was held that whilst it may be inherently unfair and no doubt was, the adjudicator had to comply with that time limit.

The question was whether the European Convention on Human Rights Article 6 applied to proceedings before an adjudicator. It was held that in the first place, the proceedings before an adjudicator were not in public, whereas the procedure under Article 6 has to be in public. Problems may arise if a decision was a final decision. In this case it was necessary to consider whether Article 6 applied to a decision that is not a final decision. It was held that if Article 6 did apply to proceedings before an adjudicator, a coach and horses would be driven through the whole of the Housing Grants Construction & Regeneration Act.

It was held that Article 6 of the European Convention on Human Rights did not apply to an adjudicator’s award or to proceedings before an adjudicator and that is because, although they are the decision or determination of a question of civil right, they are not in any sense a final determination. The determination is itself provisional in the sense that the matter can be reopened.

In those circumstances, therefore, it was held that the fact that the procedure before the adjudicator was very much a rough and ready procedure it could not of itself be regarded as a reason for not ordering summary judgment.

One further issue arose:- whether the Court should give a stay of execution in view of the financial circumstance of the party receiving payment. It was held that this would be running a coach and horse through the Act. This was a cash flow matter. It may be that the impecunious party seeking payment were those most in need of the money. A stay of execution was refused.