Brown & Anr v Complete Building Solutions Ltd

[2016] EWCA Civ 1

This was an appeal against summary judgment enforcing an adjudicator’s decision. Mr and Mrs Brown (the “Employer”) argued that an adjudicator had no jurisdiction because he had been asked to adjudicate the same or substantially the same dispute as had been decided by another adjudicator in an earlier adjudication. The Contractor contended – as HHJ Raynor QC had found in the TCC – that the adjudicator did have jurisdiction.

The Employer had in December 2011 engaged the Contractor under a JCT Minor Works Building Contract (2011 edition) (the “Contract”) to demolish a dwelling house and build a new house. On 31 October 2013, the Architect issued a Final Certificate under the Contract, and on 20 December 2013, the Contractor sent a letter to the Employer claiming that a final payment of just over £115,000 was due. The Employer did not pay this sum, and the Contractor sent a Notice of Adjudication on 7 February 2014 (the “First Adjudication Notice”). The first adjudicator, A1, was subsequently appointed.

A1 issued his decision (the “First Adjudication”) on 1 April 2014, concluding that the Final Certificate issued by the Architect on 31 October 2013 was ineffective, but also that the Contractor’s letter of 20 December 2013 was not a valid payment notice for the purposes of the relevant clause of the Contract, Clause 4.8.4.1. Therefore, as no payment notice had been served, no sum was payable.

On that same day, 1 April 2014, the Contractor sent a new payment notice, and on 24 April 2014, the Contractor issued another Notice of Adjudication (the “Second Adjudication Notice”). A2 was subsequently appointed as Adjudicator on 29 April 2014, but the Employer disputed his jurisdiction on the grounds that the dispute referred to him was the same or substantially the same as that decided by the first adjudicator. The Employer therefore refused to participate in the adjudication and did not serve a counter- notice (which it was entitled to do under Clause 4.8.4.3, and in the absence of which it was obliged to pay the Contractor the sum stated in the Contractor’s notice).

A2 issued his decision (the “Second Adjudication”) on 27 May 2014, finding that the dispute which had been referred to him was not the same or substantially the same as that which had been referred to A1. A2 found that A1 had decided that no Final Certificate had been issued in accordance with Clause 4.8.1 and that that decision was binding on both the parties and him. He also decided, however, that the Contractor’s 1 April 2014 notice was effective under Clause 4.8.4.1, and that the Employer’s refusal to make payment had created a dispute which was not the same or substantially the same as that which had been referred to and decided by A1. Therefore, and having noted that the Employer  had not given a counter-notice, A2 decided that the Employer was required to pay the £115,000 plus interest and the Adjudicator’s fees.

The Employer refused to pay the sum awarded, and the Contractor subsequently began enforcement proceedings in the TCC, where Judge Raynor QC gave summary judgment in its favour. The Employer appealed.

The CA referred to the recent cases of Harding v Paice and Springhall [2015] EWCA Civ 1281 and Quietfield Ltd v Vascroft Construction Ltd (Issue 79), and reiterated that the “starting point is the Adjudicator’s view of whether one dispute is the same or substantially the same” as the other, this being a question of fact and degree. LJ Jackson in the Harding case had said that:

“It is quite clear from the authorities that one does not look at the dispute or dispute referred to the first adjudicator in isolation. One must look at what the first adjudicator actually decided. Ultimately it is what the first adjudicator decided which determines how much or how little remains for consideration by the second adjudicator.”

The Court found that A2 was entitled and correct to conclude that he was not considering the same or substantially the same dispute as A1: he had recognised that both parties were bound by A1’s original finding that the Final Certificate was ineffective and that the Contractor’s letter of 20 December 2013 did not constitute a valid payment notice, and that he was being asked to decide whether a different notice, served some four months later, had different consequences. Whilst both adjudications were dependent on the ineffectiveness of the Final Certificate and were for the  same sum, the Contractor was not seeking redetermination of any matter which had already been decided by A1.

This was not a case where the Contractor had “tried in some way to cure a defect in the earlier notice so as to rely on it”; the Contractor had approached its claim “via a new and different route … which relied on the letter of 1 April and thereby raised a different dispute”, and it was “the new notice and only the new notice which founded the Respondent’s entitlement to be paid”. The CA dismissed the appeal, agreeing with HHJ Raynor QC that

what was decided in the First Adjudication was the ineffectiveness of the notice given in December 2013. That was not raised at all as an issue in the Second Adjudication.”