Aspect Contracts (Asbestos) Ltd v Higgins Construction plc

[2013] EWCA Civ 1541

As Mr Justice Akenhead pointed out, when the case came before him, this case raises an important issue as to when a dissatisfied party to an adjudicator’s decision must issue proceedings if they want to overturn that decision. The issue was of such importance that it ended up before the CA which had to decide whether a claim by the losing party to the adjudication for repayment of sums paid over to the successful party was subject to a time bar accruing at the time of the (supposed) original breach of contract, or only from the date of the (supposedly) unnecessary payment made as a result of the adjudication. Mr Justice Akenhead held that the cause of action accrued “whenever it otherwise did before the decision was issued”. Lord Justice Longmore set out a brief chronology of events:

  1. March 2004: Aspect carried out an asbestos survey;
  2. 27 April 2004: Aspect sent their survey report to Higgins;
  3. 24 June 2004: Higgins paid Aspect’s invoice;
  4. February 2005: alleged discovery of additional asbestos containing material  (or “ACMs”);
  5. July 2005: additional ACMs removed by Falcon;
  6. 26 June 2009: Higgins refers dispute with Aspect to adjudication;
  7. 28 July 2009: adjudicator issues decision in favour of Higgins;
  8. 6 August 2009: Aspect pay the sum of £658,017 as set out in the adjudicator’s Decision;
  9. 3 February 2012: Aspect issue Claim Form;
  10. 4 May 2012: Higgins’ Defence and Counterclaim served.

When Aspect began proceedings, it was much more than 6 years after their supposed breach of contract or duty, which occurred back in 2004, but less than 6 years after making the payment. Aspect sought to imply the following term into the contract:

“… that in the event that any dispute between the parties was referred to adjudication pursuant to the Scheme and one party paid money to the other in compliance with the adjudicator’s decision made pursuant to the Scheme, that party remained entitled to have the dispute finally determined by legal proceedings and if or to the extent that the dispute was finally determined in its favour, to have that money repaid to it.”

Lord Justice Longmore noted that here the contract incorporated the Scheme and expressly provided that the adjudication is only to be binding until the dispute is finally determined. Thus, the final determination may be different from the adjudication and so it will be the final determination that is to be determinative of the rights of the parties. If the final determination decides that a particular party has paid too much, repayment of any “adjudication monies” must be made.

 The appellate judge concluded, and in doing so disagreed with Mr Justice Akenhead, that if the contract is construed in accordance with what it appears to say, namely that any overpayment can be recovered, then the correct answer to the question posed would be that the accrual of that cause of action is the date of overpayment since the losing party is (on this hypothesis) “entitled” to have the overpayment returned to him. Therefore the claim had been brought in time.