Kaduna and Durtnell entered into a £6m deal for the restoration of Laverstoke House in Whitchurch, Hampshire – a building that had been mentioned in the Domesday Book. It was all to be done, according to the JCT document, by 11 July 2000. However, the job rocketed to £11m and the finish date was pushed back February 2002. By anyone's standards, this adventure was not the one anticipated in the contract, was it? But the parties seem to have just pressed on under the same contractual bumf – always a mite awkward to do that.
After another six months passed, everyone was getting agitated. My guess, and it's only a guess, is that the blame game was about to start.
It always does on jobs that expand like this. Durtnell was pressing for reassurance of extension of time and relief from liquidated damages. In September 2002, it pressed formally for an extension. Nothing had happened by November, so it called for the adjudicator to come on stage. He did his stuff, gave extensions, prolongation compensation and relief from liquidated and ascertained damages. Kaduna didn't like that. Of the £1.2m ordered to be paid over, Kaduna stumped up only half.
That half, by the way, was not an arbitrary sum. The lawyers for the employer carefully and impressively severed the adjudicator's decision into what they said were those parts where adjudication had been authorised and those where it had not. For example, the adjudicator may well have been authorised to deal with a dispute about the value of variations, but not authorised to deal with an extension of time. Put legalistically, the adjudicator, arbitrator, or any other tribunal for that matter, must not exceed their jurisdiction. Put less legalistically, nobody is to be stuck with the consequences of the adjudicator going on "a frolic of his own". Will Shakespeare used the word frolic, but not in Twelfth Night.
Now be careful with all of this. It is not to be thought that an adjudicator has to await an architect’s deliberations. He can arrive very early on …
Kaduna argued that Durtnell was too early in asking the adjudicator to work out the extension of time. Too early because JCT98 says that the architect is to be given 12 weeks to fathom out the appropriate extension. That 12 weeks ran out on 4 December, but the call for the adjudicator was made three weeks before that. Can you see the argument? The architects were yet to do their necessary impartial, unbiased pondering and should have been left to do their stuff. Hence the adjudicator was without authorisation until the architect had pronounced, and Durtnell had rejected the adjudicator's decision. The judge agreed. An adjudicator can be sent for only after a dispute had crystallised. You can't adjudicate if no dispute has arisen.
Now be careful with all of this. It is not to be thought that adjudicators have to await an architect's deliberations. They can come on the pitch very early on. The JCT extension of time machinery has specific steps in its operation. The overall time period for the architect is 12 weeks from the moment the contractor gives notice of delay or likely delay. The first step for the architect is to decide if the alleged reason for delay, or likely delay is a "relevant event". If it is, then the contractor is entitled to its extension of time. The architects can be asked to decide that straight away. If they disagree, the contractor can adjudicate that sole issue.
The second step is the architects deciding if the event is likely to delay completion beyond the date given in the appendix. If they says no, the contractor adjudicates that sole issue.
The third step is the decision as to how much time should be added. That issue has to await the twelfth week, or no later than the original completion date in the contract.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on email@example.com.