Macob, Outwing – now A&D

After the Macob and Outwing decisions showed how parties could get adjudication awards enforced, it was clearly only a matter of time before someone won a decision granting enforcement. The first party to cross the line was a small Essex subcontractor, A&D Maintenance, which has won a summary judgment for more than £100 000 against Pagehurst Construction, a main contractor.

The story has a twist in the tail, which I will come to later, but the background to this important decision, handed down by Judge Wilcox in the Technology and Construction Court on 23 June 1999, is not unfamiliar.

A&D was engaged by Pagehurst to carry out carpentry and plumbing work in connection with a refurbishment and renovation project at Ashdown School in Kent. The scope and price for the work was never finalised and no formal contract agreement was signed.

Predictably, there was a dispute about whether there was a contract and, if so, its terms. What was clear was that any contract that did exist must have been made after 1 May 1996. The parties had not attempted to include provisions complying with the Construction Act, so the Scheme for Construction Contracts applied.

Matters came to a head when, with payments of £98 000 allegedly outstanding to A&D, Pagehurst, having had its own contract terminated, terminated the subcontract on the grounds of poor progress and defective work. Shortly afterwards, a fire broke out at the school, the cause of which, in the opinion of the loss adjusters, was the defective installation of a boiler. A&D began adjudication proceedings for the recovery of the outstanding money.

During the course of the adjudication, Pagehurst – which by then had solicitors on board – challenged A&D’s entitlement.

First, it argued that A&D’s works were incomplete and that the price agreed was less than A&D was claiming. Second, since the boiler formed part of A&D’s works, Pagehurst argued that it was responsible for the fire and the losses. Even more fundamentally, it claimed that the adjudicator, Maxwell McCoy, had no jurisdiction to hear the matter.

• Jurisdictional issues in the Construction Act were resolved by the judgment

• Substantive issues in dispute were held to be irrelevant to enforcement of the adjudication

McCoy, undeterred, pressed on with the process and issued an award in A&D’s favour. Pagehurst refused to honour the award and threatened to start an action to recover the losses that it claimed to have suffered as a result of the fire. Summary judgment proceedings began on 21 April and, following the adoption of an Outwing-style accelerated procedural timetable, the matter came before Judge Wilcox for decision on 21 May.

By that stage, Pagehurst had started separate proceedings over the fire and sought to use that in the enforcement proceedings as a reason why the judge should not grant summary judgment under part 24 of the new Civil Procedure Rules.

Pagehurst also questioned the adjudicator’s jurisdiction on two grounds: first, it argued, there was no written contract for the purposes of the Construction Act and, second, even if there was, the rights imported into it by that legislation must have come to an end with the contract.

These jurisdictional points allowed the court to clarify some grey areas in the Construction Act. Judge Wilcox quickly disposed of the “no contract” point. Although there was conflicting evidence on this issue, A&D had contended during the adjudication that a contract did exist and Pagehurst had not formally denied its existence during the process. In dismissing Pagehurst’s argument, the judge pointed out that those are precisely the circumstances in which section 107(5) deems a contract to have been made for the purposes of the legislation.

Moving on to the termination point, the judge observed that section 108 gives a right to refer a dispute arising “under the contract” and also provides that such a right can be exercised “at any time”. There was no doubt in his mind that the dispute had arisen under the contract; furthermore, parliament had not limited the exercise of that right while the contract was subsisting. On the contrary – it said that it could be exercised at any time.

Having disposed of the jurisdictional points, Judge Wilcox had to decide to what extent Pagehurst could, in defending the summary judgment application, rely on the substantive defences that it had raised during the adjudication. Robustly, Judge Wilcox dismissed all such matters as irrelevant to the question of whether he should give judgment in A&D’s favour. Any other result would, in the judge’s opinion, amount to going behind the adjudicator’s decision and parliament’s clear intention that such an adjudication decision should be immediately enforceable.