Cowlin Construction Limited v CFW Architects (A Firm)
Case reference:
[2002] EWHC 2914 (TCC)
Friday, 15 November 2002
Key terms: Design & Build - Construction Contract - no dispute
Cowlin, as a design and build contractor and CFW were involved in a project for the rebuilding of servicemen's housing for the Ministry of Defence.
CFW resisted enforcement proceedings brought by Cowlin on the grounds that the Adjudicator did not have jurisdiction because there was no construction contract between the parties and/or that there was no dispute capable of being referred to adjudication.
In a previous adjudication, the Adjudicator had decided on the form of contract entered into between the parties. In the adjudication which was the subject of this case, the second Adjudicator applied that contract and decided that CFW should pay Cowlin the sum of £275,211.51 plus VAT. Cowlin said that the decision by the first Adjudicator on the contract was binding. CFW had initially accepted that the first Adjudicator had jurisdiction to decide the contract position and had issued a Counter Notice, they then changed their mind. However, HHJ Kirkham found that CFW had submitted to jurisdiction in the first adjudication. When they made their election, they were represented by solicitors and had been represented by solicitors for some time before the notice of adjudication was served. Even though CFW had swiftly changed their position, this was not sufficient.
CFW then said that they (and their insurers) had not had sufficient opportunity to consider the issues referred to the Adjudicator and hence there was no dispute. On the facts it was clear that on 3 May 2002, when Cowlin made a peremptory demand which required a substantive response by 17 May (and which lead to the adjudication), CFW had already been in possession of both the claim since 27 February and further details in relation to that claim since 11 March i.e. for at least some 8 weeks. Therefore, the Judge adopting (and expressing a preference for the analysis of the Court of Appeal in that case) the Halki v Solpex ( [1998] 1 WLR 727) analysis concluded that CFW should have known broadly whether they admitted some or all of Cowlin's claim or rejected it totally. Thus they had been given a sufficient opportunity to indicate their response. By not responding to the ultimatum in these circumstances, a dispute had arisen.
HHJ Kirkham said:-
CFW resisted enforcement proceedings brought by Cowlin on the grounds that the Adjudicator did not have jurisdiction because there was no construction contract between the parties and/or that there was no dispute capable of being referred to adjudication.
In a previous adjudication, the Adjudicator had decided on the form of contract entered into between the parties. In the adjudication which was the subject of this case, the second Adjudicator applied that contract and decided that CFW should pay Cowlin the sum of £275,211.51 plus VAT. Cowlin said that the decision by the first Adjudicator on the contract was binding. CFW had initially accepted that the first Adjudicator had jurisdiction to decide the contract position and had issued a Counter Notice, they then changed their mind. However, HHJ Kirkham found that CFW had submitted to jurisdiction in the first adjudication. When they made their election, they were represented by solicitors and had been represented by solicitors for some time before the notice of adjudication was served. Even though CFW had swiftly changed their position, this was not sufficient.
CFW then said that they (and their insurers) had not had sufficient opportunity to consider the issues referred to the Adjudicator and hence there was no dispute. On the facts it was clear that on 3 May 2002, when Cowlin made a peremptory demand which required a substantive response by 17 May (and which lead to the adjudication), CFW had already been in possession of both the claim since 27 February and further details in relation to that claim since 11 March i.e. for at least some 8 weeks. Therefore, the Judge adopting (and expressing a preference for the analysis of the Court of Appeal in that case) the Halki v Solpex ( [1998] 1 WLR 727) analysis concluded that CFW should have known broadly whether they admitted some or all of Cowlin's claim or rejected it totally. Thus they had been given a sufficient opportunity to indicate their response. By not responding to the ultimatum in these circumstances, a dispute had arisen.
HHJ Kirkham said:-
"While I accept that the adjudication process involves short timescales, and that there is a risk that a responding party may be ambushed, those are not in my judgment reasons to construe the word dispute more narrowly in the context of adjudications than in other contexts. I bear in mind the practical difficulties faced by an adjudicator whose jurisdiction is challenged on the ground that there is no dispute. The court should not add unnecessarily to those difficulties by giving a narrow meaning to the word dispute which would in turn permit a responding party to introduce uncertainties which might be difficult for an adjudicator to deal with. Otherwise, there is a risk that the purpose of HGCRA may be defeated."