Benfield Construction Ltd v Trudson (Hatton) Ltd (Queen's Bench Division - 17 September 2008)
Trudson employed Benfield to design and build two houses. The contract contained a provision that the decision of an adjudicator would be binding in the event of any dispute and the parties would comply with the decision.
A dispute arose over whether the date of handover was also the date of practical completion, with Trudson refusing to certify practical completion due to the presence of a defect not identified in the list of outstanding defects at the date of handover.
Trudson had issued two notices of adjudication. The first sought a declaration that practical completion had not occurred on the handover date. The second sought a declaration that Trudson was entitled to liquidated damages for Benfield's failure to complete on time. The adjudicator found in favour of Trudson on both counts.
Benfield then went to a third adjudication for a declaration that practical completion had occurred when Trudson took partial possession on the date of handover. The third adjudicator found in Benfield's favour and concluded Trudson was not entitled to liquidated damages. Benfield applied to the Technology & Construction Court to enforce the third adjudicator's decision.
The judge declined to enforce the third adjudicator's award on the basis that the third adjudicator did not have jurisdiction to consider the issues raised in the third adjudication, as the issues dealt with - and the material facts presented - were the same or substantially the same as those dealt with in the first and second adjudications.
The issue in dispute in all three adjudications was whether practical completion had occurred and whether liquidated damages were due.
This case reinforces the fact that the court will not enforce adjudication decisions where there has been a previous adjudication on substantially the same issue. A party unhappy with an adjudicator's decision needs to consider carefully in each case whether the issue is substantially the same or whether the dispute really raises a new issue before proceeding to arbitration or the court. - Sarah Apperley, BLM London
- These law reports are contributed by national law firm Berrymans Lace Mawer (www.blm-law.com).
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