Four principles

In Quietfield Ltd v Vascroft Construction Ltd 2006 the Court of Appeal approved the four principles, set out by Mr Justice Jackson in his first instance decision, that apply to multiple adjudications for extensions of time and liquidated damages.

They are:

  1. If the contract permits the contractor to make successive applications for extension of time on different grounds then either party, if dissatisfied with the decision made, can refer those matters to successive adjudications.
  2. If a contractor makes successive applications for extension of time on the same grounds, the architect or contract administrator should reiterate his original decision. The aggrieved party cannot refer this matter to successive adjudications because section 108(3) of the HGCRA provides that the earlier decision is binding until final resolution by legal proceedings, arbitration or agreement.
  3. Where a contractor is resisting a claim for liquidated damages in respect of delay he can raise, by way of defence, his entitlement to an extension of time.
  4. The contractor cannot rely by way of defence upon an alleged entitlement to an extension of time which has been considered and rejected in a previous adjudication.

In approving the Jackson principles, the Court of Appeal took matters a step further. Dyson LJ said that Clause 25 of the JCT 1998 Standard Form of Contract did not limit the number of:

  • notices in respect of any particular “relevant event” that may be given, or
  • times that particulars of expected effects may be given, or
  • estimates of expected delay to completion that may be given.

Are there limits?

Yes. The contractor cannot give successive notices of the same material circumstances, including the same causes of delay or the same relevant event, as given in a previous written notice. Nor can he successively give the same particulars of the expected effects of the same relevant event or make the same estimates of the expected delay to completion as previously given or made.

The result is that the contractor cannot just repeat himself. He must provide new material. He can, however, rely on the same relevant event provided materially different particulars of the expected effects or different estimates of the expected extent of delay to completion are given. As Dyson LJ put it:

“There is nothing in the express language which prevents the contractor from making good the deficiencies of an earlier application in a later application.”

Applications v Adjudications

There is a world of difference between successive applications for extensions of time and successive referrals of disputes to adjudication. Ultimately, it is a question of fact and degree whether the new material gives rise to a substantially different dispute capable of a subsequent referral to adjudication. If the particulars of expected effects are the same but the evidence is different this could give rise to a different dispute. However, Dyson LJ stated that “where the only difference between disputes arising from the rejection of two successive applications for an extension of time is that the later application makes good short comings of the earlier application, an adjudicator will have little difficulty in deciding that the two disputes are substantially the same.” Unfortunately, this latter remark appears at odds with the earlier remark and may come back to haunt the courts as parties tussle over whether new material has been presented, or whether in truth a mere making good of short comings has occurred.

Conclusions

If making successive referrals to adjudication, ensure new material is used to back up the successive claims for extension of time. If on the receiving end of successive referrals to adjudication for extensions of time, consider whether they can be defeated by arguing that the contractor is merely seeking to make good deficiencies in earlier attempts