Witney Town Council –v- Beam Construction – Dispute or Disputes? A Question of Linkage

The case, heard in the TCC on 11 August 2011, considered the enforceability of an Adjudicator’s decision dated 31 May 2011.  The dispute referred to adjudication by Beam comprised a package of issues including such matters as deduction of retention, a draft Final Account, a Final Account and interest.  The Adjudicator decided that Beam was entitled to a further payment of £69,819.00 based on a gross valuation of £735,000.

Witney resisted enforcement of the Adjudicator’s decision on the basis that the Adjudicator did not have jurisdiction to decide more than a single dispute.  Witney asserted that more than one dispute had been referred.  It was argued by their counsel that there were effectively four disputes referred.  The first dispute related to a January 2011 draft Final Account.  The second related to a March 2011 Final Account.  The third dispute was said to relate to interest on underpayment of retention and the fourth a claim for the payment of the whole of the retention based on repudiatory breach.  Counsel for Beam countered that there was only one dispute encompassing what was due and owing to the client from Witney.

Save where otherwise agreed between the parties, only a single dispute may be referred to adjudication.  The rationale is that it is expedient and fair if the Adjudicator has only to deal with a single dispute in the 28 day period allowed.  Confusion has arisen about the definition of “dispute” and a number of cases have considered the definition.  It is almost impossible to provide a definition that works in every case.  The dispute will usually be taken to involve a claim or assertion that is expressly or by implication challenged or not accepted.

Mr Justice Akenhead considered the previous authorities and set out a number of principles in relation to defining a dispute including the following:-

“(i) A dispute arises generally when and in circumstances in which a claim or assertion is made by one party and expressly or implicitly challenged or not accepted.  …

“(iii) Everything in issue [at the time that one party initiates adjudication] does not necessarily comprise one dispute, although it may do so.  …
 
“(v) The Notice of Adjudication and the Referral Notice are not necessarily determinative of what the true dispute is or as to whether there is more than one dispute.  One looks at them but also at the background facts. …

“(vii) Whether there are one or more disputes again involves a consideration of the facts.  It may well be that, if there is a clear link between two or more arguably separate claims or assertions, that may well point to there being one dispute.  A useful if not invariable rule of thumb is that, if disputed claim No 1 cannot be decided without deciding all or part of disputed claim No 2, that establishes such a clear link and points to there being only one dispute.”

Mr Justice Akenhead formed “a very clear view” that there was only one dispute referred to adjudication being the dispute as to what was due and owing to Beam.  His judgment provides a careful analysis of the constituent elements of what was referred indicating the linkage between the constituent parts.  By way of example of his analysis of linkage he said:-

“(h) There were clear links between the final account and some of the other matters in issue.  Thus, the disputed prolongation claim in the final account could not be resolved without deciding what if any extension of time was due to Beam because it was only if and to the extent that there was an entitlement to extension that the prolongation entitlement could be established.  Similarly, one could not determine the insurance claim, the level of retention to be maintained and the prolongation costs without determining when and if practical completion had occurred.”

Mr Justice Akenhead (at paragraph 41 of the Judgment) noted some aspects of the decision of the Adjudicator that he considered to be odd, but did not consider the oddities to undermine the enforceability of the decision.

This case contains helpful guidance of the definition of a dispute.  The case highlights that in multiple issue adjudications (typically relating to final accounts, retentions and termination) the matters referred and relief claimed have to contain some common linkage.  If such common linkage cannot be found, any decision reached may be susceptible to challenge upon enforcement.

Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.

 

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