The adjudicator shall notify its decision to the Contractor and the Sub-Contractor not earlier than 10 and not later than 28 days from receipt of the notice of referral, or such longer period as is agreed by the Contractor and the Sub-Contractor after the dispute has been referred. The adjudicator may extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred. The adjudicator’s decision shall nevertheless be valid if issued after the time allowed. ..” (emphasis added)

Judge Havery QC, for the same reasons as Epping Electrical Limited v Briggs and Forrester held that this provision was not compliant with the Act because of the last sentence (emphasised in the quote above). Section 108(2)(c) and (d) were mandatory rather than directory. Therefore the provisions of the Scheme applied.

Jerram also argued that the decision of the adjudicator was made out of time. The referral notice was dated 11 October 2006 and the time was validly extended by 7 days so that the decision had to be reached by 15 November 2006. However, the decision was not reached until 17 November 2006. Judge Havery decided that the date of the referral notice means the date of its receipt by the adjudicator. The adjudicator had received his decision on 13 October and therefore his decision was in time. Judge Havery also dismissed Jerram’s arguments that the matter was not referred to the adjudicator within 7 days, the adjudicator was not appointed under the Scheme as the notice was expressly based on clause 38A of the GC/Works subcontract and that Aveat had not validly consent to extend the time until 17 November.

Jerram also argued that the adjudicator’s decision was out of time even if not due until 17 November. As the adjudicator had acknowledged receipt of the referral by faxed letter dated 13 October 2006 at 16:24 and therefore he had to reach his decision by 16:24 on 17 November. Judge Havery stated that no account is to be taken of fractions of a day and the adjudicator reached his decision on 17 November, within the time allowed.

Although the Notice did not comply with paragraphs 1(3)(b) or (c) of the Scheme, the notice was sufficient for the purpose of selecting a suitable adjudicator. Judge Havery did not think that compliance with all the requirements of paragraph 1 (3) was a condition of enforcement of an award. The Scheme’s requirements of a notice of adjudication must be regarded as directory rather than mandatory.

Judge Havery then considered whether there was a dispute and if so whether it was sufficiently clearly identified in the notice of adjudication. Jerram relied on Edmund Nuttall Ltd v RG Carter Ltd as they alleged that Aveat had relied on information that was not previously relied upon and therefore could not be the subject of the dispute. Jerram stated that Aveat relied on many matters and documents in the adjudication that did not form part of Aveat’s application number 7. Judge Havery analysed the monetary claim in application no 7 and concluded that the claim referred to the adjudicator was substantially the same as that made previously. This additional material was considered by the adjudicator. Jerram did not specify the difference that they alleged between Aveat’s application no 7 and its notice of referral. However, it was clear that there was a dispute over application no 7 and exactly the same dispute was the subject of the notice of referral. There was “not the slightest doubt” that Jerram knew what the dispute was. Therefore the adjudicator had jurisdiction to make his decision.

Further, the adjudicator was not deprived of his jurisdiction by failing to give notice under Clause 38A.3.2 of the Contract. Its only effect would be that the adjudicator was not appointed under Clause 38A and this had been found for other reasons.

The adjudicator had awarded costs and expenses to Aveat without substantiation. Jerram argued this indicated bias. Judge Havery was not satisfied that the adjudicator was biased but he had no jurisdiction to award costs under the Scheme. As the adjudicator’s jurisdiction derived from the Scheme (rather than the contract), the adjudicator’s award of costs and expenses could not stand and Jerram was granted permission to defend the claim to this extent only.