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When is final really final?
Our esteemed Chairman has decided to set us the following little teaser
This is the subject of the Institute's Young Members' Group's September seminar in Edinburgh. It is a subject of perennial concern to the courts, recently in Quietfield Limited -v- Vascroft Contractors Limited [2006] EWHC. This judgement included principles relating to successive adjudications concerning extensions of time, one of which was that, if successive applications for extensions of time are made on the same ground then this cannot be referred to successive adjudications.
Am I right in interpreting this to mean that the opposite also applies, i.e. successive applications for extensions of time made on different grounds can be referred to successive adjudications? If so, where is there even the temporary finality of adjudication?
I doubt if it was intended to create opportunities for adjudicators' decisions to be challenged at adjudication, but those wishing to re-open a decided dispute may disagree and attempt to have a second bite at the cherry.
Robin Orme
This is the reply suggested by Peter Horne. Does anybody else have some other thoughts on this topic?
The 'problem' arises out of S108(3) of the Construction Act and Paragraph 23(2) of the Scheme, which says that the decision of the adjudicator is final until the dispute is finally determined by legal proceedings, by arbitration or by agreement, but NOT by a further adjudication. Paragraph 9(2) of the Scheme is largely immaterial, providing that the adjudicator MUST resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication and a decision has been taken. If the previous adjudication only forms a part of the current adjudication, then the adjudicator does not resign but cannot make any other decision regarding the first adjudication. I suggest the adjudicator in a 'non-scheme' adjudication being the same as a previous adjudication should resign, being a cheaper option than writing a Decision to say that he is bound by the previous Decision.
I think that paragraph 42 of Mr Justice Jackson's judgment in 'Quietfield Ltd -v- Vascroft Contractors Ltd', fully covers the matter, in four principles:
(i) Where the contract permits the contractor to make successive applications for extension of time on different grounds, either party, if dissatisfied with the decisions made, can refer those matters to successive adjudications. In each case the difference between the contentions of the aggrieved party and the decision of the architect or contract administrator will constitute the "dispute" within the meaning of section 108 of the 1996 Act.
(ii) If the contractor makes successive applications for extension of time on the same grounds, the architect or contract administrator will, no doubt, reiterate his original decision. The aggrieved party cannot refer this matter to successive adjudications. He is debarred from doing so by paragraphs 9 and 23 of the Scheme and section 108(3) of the 1996 Act. (Note: not strictly correct, there is nothing to stop the party commencing adjudication but the result is inevitable).
(iii) Subject to paragraph (iv) below, where the contractor is resisting a claim for liquidated and ascertained damages in respect of delay, pursued in adjudication proceedings, the contractor may rely by way of defence upon his entitlement to an extension of time.
(iv) However, the contractor cannot rely by way of defence in adjudication proceedings upon an alleged entitlement to extension of time which has been considered and rejected in a previous adjudication.
Principle (i) says that successive applications for extensions of time made on different grounds can be referred. I think that the 'temporary finality' comes when the referring party has exhausted the available reasons or his own resources.
I would stress that the principles apply under contracts in which it is envisaged that there may be successive applications for extensions of time but may be restricted by requirements for notices.
These principles may also apply to the value of variations and loss/expense, that is any matter in which the contract provides for either successive applications or for interim and final applications.
I recommend all adjudicators and arbitrators to read the judgments coming from Mr Justice Jackson - I find that they are extremely clear and succinct and worth studying if only for the technique of writing 'judgments'.
Peter Horne