R Durtnell & Sons Limited v Kaduna Limited

Case reference: 
[2003] EWHC 517 (TCC)
Wednesday, 19 March 2003

Key terms: 
Jurisdiction - scope of dispute - EOT - practical completion - no dispute - part payment of decision - approbation and reprobation - waiver

The Contractor, Durtnell, was engaged by Kaduna by a written construction contract dated 18th May 1999 in order to take works at a freehold property (Laverstoke House) for the sum of £5,890,244.55. Kaduna was a company operated for the benefit of a racing driver Mr Jody Scheckter. The contract was based on the JCT 1980 Edition together with amendments, including Amendment 18. The duration of the works extended considerably and the contract sum increased to in excess of £11 million. Various disputes arose, and a Notice of Adjudication was issued on 14th November 2002. The Notice covered a variety of matters including interim application no. 40. An Adjudicator's decision was issued on 24th December 2002 instructing payment of £1,228,313.50 to be paid by Kaduna to Durtnell. On 13th January 2003 Kaudna paid the sum of £610,883.50. A letter issued on 10th January 2003 stated that the Adjudicator had exceeded his jurisdiction as at the time the Notice of Adjudication was issued no dispute had arisen in relation to the extension of time sort.

Durtnell were therefore seeking the balance of the Adjudicator's decision by way of summary judgment.

Kaduna argued that the Adjudicator had no jurisdiction in respect of delay because an application for an extension of time had been made to the Architect and the Architect had not yet made a decision in respect of the extension of time, if any, and the time allowed in the contract for the Architect to make that determination had not at the date of the Notice of Adjudication expired. Durtnell on the other hand argued that all of the issues decided by the Adjudicator were in dispute. In any event, as Kaduna had taken part in the adjudication and had not raised a jurisdictional objection Kaduna had waived their right to challenge the decision. Further, by adopting and paying half of the decision they were approbating and reprobating the decision and so should pay the outstanding balance.

HHJ Seymour QC held that whilst the granting of an extension of time was not a condition precedent to the exercise of the right to adjudication "at any time", a dispute must have crystallised before it could be referred to adjudication. At the time the Notice of Adjudication was issued there could not be said to be a "dispute" as to the entitlement to an extension of time or the valuation of loss and expense consequent upon that ground of an extension of time because the question of whether any further time should be allowed had been referred to the Architect in accordance with the contract. The Architect had not yet made a determination and a time provided in the contract for him to make that determination had not yet expired. Until the architect had made an assessment or failed to do so within the time provided by the contract there was clearly nothing to argue about and therefore no "dispute" that was capable of being referred to adjudication. The decision was therefore invalid and made in excess of jurisdiction.

He also rejected Durtnell's argument that Kaduna could have objected to the jurisdiction of the Adjudicator at the time of the adjudication. A party is not disabled from taking a point that an adjudicator has decided something not referred to him or not in dispute unless he has elected to raise it. In this case Kaduna were held to have not appreciated the nature of the challenge until receiving the decision.

Finally, the doctrine of approbation and reprobation was applicable to the decision of Adjudicators. However on the facts of this case did not apply as the decision related to a different dispute.

In conclusion the surviving claims of Durtnell failed because the decision was in excess of the jurisdiction.

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