With the untimely death of Paul Darrington it is appropriate to mention that he made a valuable contribution to this column that was not, so far as I recall, ever recognised. He had a wide range of sources, which he was always ready to share, and was a stimulating and interesting friend.

And so it goes on: everyone is getting in on the HGCR Act. No-one is altogether sure whether the lawyers are creating work for themselves because the Act would otherwise be causing it to dry up. We do know that they are crying foul, because the Act prevents justice from being done. Justice, of course is not defined, but is justice keeping a subbie out of his money for two years pending a decision in arbitration justice? Not for the lawyers, maybe, who have to learn that the Act is working, and is here to stay.

As an example, one of the latest decisions concerned a dispute over about £20k, a sum which was not too small for it to be referred to the TCC on an esoteric point of law, with all the costs that would have been involved. This was, as are most cases, a matter of jurisdiction. The question whether a construction contract came into existence which entitled the Claimant to stage payments was a dispute as to the terms of the contract, and not a dispute which went to the jurisdiction of the adjudicator. The judge held that a decision as to what the contract terms are is within the adjudicator’s jurisdiction.

Tim Butler Contractors Limited -v- Merewood Homes Limited, T&CC, 12th April 2000

In the second case, the question was whether the maintenance and repair of gas appliances such as heating systems and gas cookers were construction operations under section 105 of the Act. The court held that they were.

Nottingham Community Housing Association Limited -v- Powerminster Limited, T&CC 30th June 2000

In the third case, the judge upheld a clause in a subcontract which provided that the party serving the notice of adjudication shall bear all of the costs and expenses incurred by both parties in relation to the adjudication, including but not limited to all legal and experts’ fees. There was a further clause which stated that the party serving the notice to adjudicate shall be liable for the adjudicator’s fees and expenses.

The judge said, "It seems to me that the parties can contract how they like".

Presumably contractors believe that on balance they are more likely to be on the receiving end of adjudication notices from subcontractors.

Bridgeway Construction Ltd -v- Tolent Construction Ltd, T&CC 11th April 2000

The plaintiffs entered into a MW 80 contract with the defendants, under which any dispute or difference as to the construction of the agreement was to be referred to arbitration.

The plaintiff claimed that the work had been performed under a separate, oral contract, which did not contain an arbitration clause, and commenced proceedings. The defendants sought a stay under the Arbitration Act 1996 s.9, arguing that the work for which payment was claimed was under the original contract, and, therefore, the dispute was subject to the arbitration clause.

The Court at First Instance stayed the action, but refused to decide whether the subject matter of the action was covered by the arbitration agreement, referring this back to the arbitrator instead. The claimant appealed.

Held, dismissing the appeal: The approach to be applied was that contained in

Birse Construction v St. David Ltd., [1999].

In a case where the underlying issue was whether the dispute was covered by the arbitration agreement, the court had a choice whether to decide the issue itself or stay the proceedings whilst the matter was referred to arbitration. If the court decided to determine the matter itself and if there was a triable issue, directions should be given under RSC Ord.72 r.6(2) for its trial. This was equivalent to the procedure under CPR r.49.6.2. Under CPR r.32.1, the court possessed a wider discretion to rule what evidence it needed to decide any particular point.

It was for the judge to take into account whether the issue was one which could be determined on affidavit evidence without oral evidence in the interest of good case management and cost savings. Additionally, it was worth exploring whether the parties would agree any factual issues.

Rarely would it be appropriate to adopt the course of resolving issues of fact solely on written evidence unless the parties invited the court to do so. The court would decline to do so in cases where it considered that oral evidence was necessary. If the court decided that the proceedings should be stayed to arbitration, it would be better to view it as acting under its inherent jurisdiction, rather than under section 9. On its proper construction, section 9 probably required a court to be satisfied that there was an arbitration clause and that the subject matter of the dispute was within that clause before a stay could be granted.

Where a court could not be sure of those matters, but could see that it was desirable that the matter should be considered by an arbitrator, a stay under its inherent jurisdiction might be more sensible.

Al-naimi (t/a Buildmaster Construction Services) -v-Islamic Press Agency 28 January 2000 CA (Civil Division)

An important decision for construction arbitrators was given by the Court of Appeal recently. The judge at first instance reversed the arbitrator’s award, and the Court of Appeal upheld the judge by a majority. The question was whether the arbitrator had the power to alter the schedule of rates in the contract, which was under the ICE Conditions, however unreasonable they may be.

The fact that the contract prices or rates on which the valuation is to be based might be unreasonably high or low should be disregarded. The question why the prices or rates were high or low was irrelevant. Arbitrators could not adjust rates or prices simply because they gave an unreasonable result.

The decision was in relation to the ICE Conditions, but by analogy applies also to the JCT forms.

Henry Boot Construction Ltd -v- Alstom Combined Cycles Ltd, CA 4th April 2000