As Ciaran Williams explains it has been over twenty years since the Construction Contracts (Northern Ireland) Order 1997 (the “Construction Order”) introduced statutory adjudication in Northern Ireland and the Construction Order provides for an almost identical construction adjudication framework to the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”) in England and Wales.

The Construction Order was amended by the Construction Contracts (Amendment) Act (Northern Ireland) 2011 which introduced changes to the payment procedures and removed the requirement for contracts to be in writing. These changes are similar to the amendments made to the HGCRA by Part 8 of the Local Democracy, Economic Development and Construction Act 2009.

The number of adjudications in Northern Ireland has steadily increased since the Construction Order came into force and there have been a number of enforcement cases before the Northern Irish Courts. This article discusses the steps to enforcement and some of the published decisions from the High Court of Justice in Northern Ireland.

Since 1999 there have been around ten published adjudication enforcement decisions in Northern Ireland and the courts’ approach to enforcement has generally been consistent with that in England and Wales.

In Northern Ireland, construction disputes are heard in a commercial list in the Queen’s Bench Division of the High Court of Justice Northern Ireland, whereas in England and Wales such cases are heard in the Technology and Construction Court.

Similar to England and Wales, there is no need to comply with any pre-action protocols provided that the enforcement concerns an adjudicator’s decision that was referred pursuant to the Construction Order.

The steps to enforcement in Northern Ireland

The first step is to issue a writ of summons in the Queen’s Bench Division of the High Court of Justice. The statement of claim should be endorsed onto the writ because an application for summary judgment cannot proceed unless the statement of claim has been served.

If the writ is served within the jurisdiction of Northern Ireland, the defendant has 14 days from the service of the writ to enter a memorandum of appearance (different rules apply if service is outside the jurisdiction).

The next stage is to apply for summary judgment in accordance with Order 14 of the Rules of the Court of Judicature (Northern Ireland) 1980 on the basis that the defendant has no defence to the claim. The application is made by a summons and supported by an affidavit verifying the facts.

The Court will then list the case for directions and a timetable will be set in terms of the filing of evidence and a hearing date. The case will be listed for hearing as soon as possible, the Court aiming to list the matter for hearing within 28 days. Some of the key decisions from the Northern Irish Courts are discussed below.

Decisions from the High Court of Justice in Northern Ireland

This was the first application for summary judgment to enforce an adjudicator’s decision in Northern Ireland. In this case, Ecomesh (the defendant) applied for summary judgment in its favour in the sum of £48,234.39.

Coleraine Skip Hire Ltd (“CSH”) resisted the application on a number of grounds including jurisdiction and that the decision was issued outside the statutory 28-day time limit for an adjudicator’s decision to be published in accordance with the Construction Order.

Mr Justice Weatherup decided that the adjudicator’s decision was issued on time and that there was no issue as to jurisdiction. CSH had also applied for a stay on the grounds of Ecomesh’s financial standing, but Mr Justice Weatherup decided that the financial position of the payee did not warrant a stay on this ground and that Ecomesh had an unanswerable claim for the sum of £48,234.39.

However, the Judge held that the application related to only one part of the claims that were in dispute and that the sum of £48,234.39 should only be paid following the conclusion of the trial which was ongoing. Exercising the discretion of the Court, Mr Justice Weatherup granted a stay pending the outcome of the trial on all of the matters in dispute between parties.

Following this case, there was some concern that adjudication might not be as successful in Northern Ireland because a stay was granted in circumstances where the payee’s financial position was satisfactory. The ethos behind construction adjudication is “pay now, argue later” and it is designed to promote cash flow in the construction industry.

D G Williamson Ltd v Northern Ireland Prison Service [2009] NIQB 8 (27 January 2009)

The second application to enforce an adjudicator’s award appeared before the Northern Irish Courts in a case between D G Williamson Ltd (“DGW”) and the Northern Ireland Prison Service (the “Prison Service”). DGW applied to enforce an adjudicator’s decision in its favour in the sum of £261,898.76.

The Prison Service put forward a number of grounds to resist the enforcement of the award including that the adjudicator did not have jurisdiction and that the contract was not in writing. Mr Justice McLaughlin rejected these grounds and then proceeded to consider the Prison Service’s application to order a stay of the enforcement pursuant to Order 14 rule 3(2).

Mr Justice McLaughlin did not grant the stay and awarded judgment in favour of DGW. Mr Justice McLaughlin showed support for construction adjudication in Northern Ireland and stated:

“I am satisfied that the starting point for a court dealing with a request for enforcement of the award of an Adjudicator is that it should work on the assumption that the award ought to be enforced, on a summary basis if necessary. The purpose of the legislation is to ensure speedy payment by dint of a summary process.”

This judgment was a welcome development and it set the ground rules for adjudication in Northern Ireland. Whilst there are certain circumstances where an adjudicator’s decision will not be enforced, the Court showed a willingness to enforce adjudication decisions and the Judge referred to the importance of the legislation in terms of protecting cash flow in the construction industry.

Mel Davidson Construction v Northern Ireland Housing Executive [2014] NIQB 110

This was another key case and involved Mel Davidson Construction (“MDC”) claiming summary judgment in relation to an adjudicator’s decision of 14 February 2014, which awarded MDC £53,440.28. This was the second adjudication between the parties and it concerned interest on a sum that had been paid by the Northern Ireland Housing Executive (“NIHE”) to MDC following the first adjudication decision of 15 March 2013.

NIHE resisted enforcement on two grounds. The first ground was that the dispute was the same or substantially the same as that which had previously been referred to adjudication. The second ground was that there was an estoppel because the interest claim should have been brought in the first adjudication.

In respect of the first ground, Mr Justice Weatherup considered a number of English cases including Quietfield Limited v Vascroft Contractors Limited (2006) EWCA Civ 1737 and concluded that:

“I see nothing in the nature of the Scheme which permits the Adjudicator, in such circumstances, to refuse to decide a matter referred for decision. The Scheme requires the Adjudicator to decide a claim if it is possible for him to do so. There are instances where an Adjudicator has been unable to make a decision, possibly because the material presented is not sufficient to permit the decision to be made. That is not this case.”

In respect of the second ground, Mr Justice Weatherup commented that a delay in asserting a contractual right within time limits would not usually result in the loss of the right and that MDC’s delayed response did not amount to a representation that results in estoppel. Accordingly, the Judge awarded judgment in favour of MDC for the sum of £53,440.28.

Conclusion

The construction industry is reliant on cash flow and the purpose of adjudication is to provide a quick and cost-effective dispute resolution mechanism to maintain cash flow in the construction industry. As part of this process, it is important that parties can enforce adjudicators’ decisions quickly and the Northern Irish Courts have acted to promote the success of adjudication.

The Northern Irish Courts have developed a process so that adjudication cases are heard as quickly as possible and there is an assumption that adjudication awards ought to be enforced. The relatively low number of adjudication enforcement decisions published by the Northern Irish Courts is perhaps a sign that adjudication has been a success over the past twenty years.