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 adjudicators 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 adjudicators 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--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 adjudicators 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.
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