Benfield Construction Ltd v Trudson (Hatton) Ltd

Adjudication is intended to be a quick, one-off process. A party cannot refer substantially the same dispute to a second adjudicator by advancing a new legal argument which could and should have been raised earlier. The court must analyse the terms, scope and extent of the references and decisions. Whether disputes are the same or substantially the same is a question of fact and degree. Different legal concepts, such as practical completion and partial possession, do not necessarily create different disputes where they concern the same underlying questions. A subsequent decision which reopens or fundamentally contradicts an earlier decision is unenforceable. The proper remedy for dissatisfaction with an adjudicator’s decision is final determination by arbitration or court proceedings.

The claimant contractor sought to enforce a third adjudicator’s decision that partial possession on 17 August 2007 had deemed practical completion to occur and had removed the employer’s entitlement to liquidated damages. Earlier adjudications had decided that practical completion had not occurred on that date and that the employer was entitled to liquidated damages. The claimant relied on the same handover form and, in the third adjudication, relied more specifically on the partial-possession provisions. The employer argued that the third reference concerned the same or substantially the same dispute as the earlier references and was barred by the contract’s adjudication provisions.

The central issue was whether the third adjudicator had jurisdiction to reopen practical completion and liquidated-damages issues already decided.

1. The application to enforce the third adjudicator’s decision was dismissed. The third adjudicator lacked jurisdiction because the dispute referred was the same or substantially the same as disputes decided in the first two adjudications. The directly contrary outcomes made the overlap plain: the earlier decisions rejected practical completion on 17 August 2007 and awarded liquidated damages, whereas the third decision deemed practical completion to have occurred on that date and excluded liquidated damages.
2. Under clause 39A.7.1, an adjudicator’s decision remains binding until finally determined by arbitration, court proceedings or a later written agreement. The scope of that temporary binding effect depends on analysing the terms, scope and extent of the dispute referred and the decision made. The relevant comparison is whether the later dispute is the same or substantially the same. That is a question of fact and degree.
3. The third adjudication introduced no materially different facts. It relied on the same handover form which had been central to the earlier adjudications. The claimant had already advanced both factual and deeming arguments concerning practical completion. The absence of an express reference to clause 17.1 did not create a new dispute.
4. Practical completion and partial possession are distinct legal concepts, but that distinction was not decisive. Partial possession was relied on only as an issue or legal argument within the underlying dispute about whether practical completion had occurred and whether liquidated damages were payable. A party cannot avoid the prohibition on serial adjudication by dividing one underlying dispute into successive legal arguments.
5. Even if the clause 17.1 argument had not been expressly raised earlier, it could and should have been raised in the first or second adjudication. Allowing successive adjudications on the same facts until a favourable result was obtained would be an abuse of the adjudication process and impose an intolerable burden on the responding party. The proper course was to seek final determination by arbitration or the court.

The third adjudicator’s decision was therefore not enforced.