Dacy Building Services Ltd v IDM Properties LLP

Case reference: 
[2016] EWHC 3007
Friday, 25 November 2016

Key terms: 
Adjudication – Summary judgment – Enforcement proceedings – Adjudicator’s jurisdiction – Contractual relationship

Dacy Building Services Ltd (‘Dacy’), the claimant sub-contractor, applied for summary judgment to enforce the decision of an adjudicator that IDM Properties LLP (‘IDM’), the defendant, to pay the claimant the sum of £247,250 plus interest.

Some of the claimant’s invoices were not paid in full hence Dacy referred the dispute to adjudication. Dacy claimed IDM was the main contractor, but IDM resisted enforcement on the basis that the adjudicator had no jurisdiction because it was not the main contractor, the parties had not entered into a contractual relationship with the consequence that the adjudicator did not have jurisdiction to reach the decision which he had reached. The adjudicator came to a decision that there was a contract between the claimant and the defendant and proceeded to award the claimant the sums the defendant did not pay.

Jefford J held the claimant was not entitled to summary judgment in order to enforce the decision of an adjudicator because the defendant had established a realistic prospect of succeeding in its defence that no contract had been entered into between the parties. 

The issue was the identity of the claimant’s contracting party and there was conflicting evidence before the court such that Jefford J said that it was “not at all clear who Dacy contracted with if anyone”, concluded that this kind of dispute was not one which it could resolve on a summary basis and dismissed the application for summary judgment.

Jefford J held that it was well-established that, if the responding party in an adjudication contended that the adjudicator lacked jurisdiction for whatever reason, he must have raised that objection promptly and clearly. If he didn’t, he may have participated in the adjudication without affecting his right to resist the enforcement of any decision on the grounds of lack of jurisdiction. The Judge held that, here, the defendant did not agree to the adjudicator’s jurisdiction, noting that “…parties may often want to agree the identity of a putative adjudicator rather than leave it in the lap of a nominating body but something more would be needed for that to amount to agreement to his appointment with jurisdiction over a particular dispute”. The reference to the Response being “without prejudice” meant that it was served without prejudice to the defendant’s position that the adjudicator lacked jurisdiction.

This case served a useful reminder for practitioners that parties should have been clear about who they were in contract with before embarking on adjudication proceedings which might ultimately be ineffective. And finally, the judgment was a good example where the facts and evidence presented were too complex for the court to come to a decision on a summary basis.

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