Hanging in the balance

Several weeks ago his prayers were answered. Both parties were represented by leading construction silks. Not only was the relevant law looked at closely, but the implications of the decision for the operation of statutory adjudication were also considered.

Readers will recall the thrust of Judge Seymour’s decision. The dispute that Nuttall defined in its notice of adjudication had been subsequently transformed into a different dispute. The judge felt that this surprising result had been achieved because Nuttall had, with its referral document, served an expert’s report that was inconsistent with the original claim document it had submitted to Carter many months earlier, before the dispute had crystallised.

The judge described the dispute that had been referred by the notice of adjudication as the whole package of arguments advanced and facts relied on by each side before the dispute began. Subsequently, both parties were restricted, in terms of introducing new arguments, facts and matters, purely to refining what was already in the package.

As Tim Elliott predicted, this decision has led to considerable confusion for both adjudicators and parties in on-going adjudications. That is one of the reasons why this decision is of such importance.

Typically, the subject of the proceedings before the Court of Appeal was a small part of the overall punch-up between the parties. By the time the Court of Appeal heard the matter, there had been no fewer than six adjudications and three trips to the Technology and Construction Court. Also, typically, there were important commercial issues bubbling under the surface. Those imperatives, as always, proved more important than the legal shenanigans. The law is, after all, no more than a means by which parties can achieve their commercial ends.

As always, commercial imperatives bubbling under the surface proved more important than legal shenanigans

The day after the parties had been in court, a settlement of the overall dispute was reached that included the subject matter of the appeal and costs. Subsequently, Carter’s solicitors approached the Court of Appeal saying it would be inappropriate for the court to deliver a decision. Hold on, responded Nuttall’s solicitors, one of the reasons the Court of Appeal granted permission to appeal was because of the importance of the case to the industry. Surely, notwithstanding the settlement, it would still be appropriate for the court to hand down a decision. On the contrary, responded Carter’s solicitors, since the matter was now of purely academic interest to the parties, the court should take no further action.

The Court of Appeal decided that, in view of the settlement, it was constrained by existing authority not to deliver a decision. But in an unprecedented statement to the parties, it said it recognised the question was indeed one of interest to the construction industry and of importance to the efficient operation of the adjudication system.

So, where do we stand now? In its statement, the Court of Appeal confirmed its agreement to the publication in relevant journals of the short order that Lord Justice Dyson made, in granting Nuttall permission to appeal, in the following terms: “There are real prospects of success on appeal. Further, the issues are of general importance and relevant to the efficiency of the adjudication scheme.”

It is regrettable that the Court of Appeal considered itself unable to hand down a decision in this case. Its statement is clearly not binding authority, but could it be treated as of persuasive effect? The first question here is whether it is possible to infer from the statement what the Court of Appeal’s views on the substantive question were. I believe it suggests the likelihood that the appeal would have been allowed.