Geoffrey Osborne Ltd. v Atkins Rail Ltd.

An adjudicator’s decision remains binding despite an error of law or fact where the adjudicator answered the question referred. The court may finally determine a discrete issue decided by an adjudicator in Part 8 proceedings alongside enforcement, where there is no substantial dispute of fact and that course is just and expedient. A referral may be limited to selected items in a payment application. The adjudicator must value those items without deciding unrelated claims, but must take account of sums already paid or allowed against them when determining the amount payable. A plainly wrong calculation does not, without more, establish excess of jurisdiction or justify setting aside the decision.

Geoffrey Osborne Ltd. sought summary judgment to enforce an adjudicator’s decision requiring Atkins Rail Ltd. to pay approximately £504,385 following a dispute about the value of ground investigation works and variations relating to a signal control centre. Atkins Rail issued Part 8 proceedings seeking declarations that the adjudicator lacked jurisdiction, had erred, and that the decision should be set aside.

The adjudicator had valued the two referred claims but failed to deduct amounts already paid or allowed for them in an earlier interim certificate. The central issues were whether that error concerned jurisdiction or merely the answer to the referred question, whether the payment regime required the deduction, and what relief was available on the Part 8 application.

1. Part 8 procedure. The court could determine a discrete question finally decided by an adjudicator at the same time as an enforcement application, provided the question involved no substantial dispute of fact and could be determined on the material before the court. It was unnecessary to adopt an all-or-nothing approach if an isolated part of the adjudicator’s decision could justly and expeditiously be resolved.
2. Scope of referral. GOL was entitled to refer only the SCC and ground investigation claims from Payment Application No 36. The adjudicator was not entitled to determine unrelated claims in that application or the previous certificate, subject to taking account of an un-referred item where it was interlinked with a referred claim and affected its valuation.
3. Payment calculation. Under the subcontract, GOL was entitled to payment only of the amount stated in a certificate. In valuing the referred claims and determining what was payable, the adjudicator had to take account of sums already paid or allowed against those claims. His failure to deduct £912,147 meant that the payment order did not reflect GOL’s legal entitlement.
4. Jurisdiction. Although the adjudicator’s order was plainly wrong, the wording of the Notice of Adjudication gave him jurisdiction to order such other sum as he thought fit. He had therefore answered the right question wrongly, rather than answering a question that had not been referred. The error did not justify setting aside the decision.
5. Costs and final orders. The adjudicator had jurisdiction to award costs and fees, and there was no sufficient basis for interfering with those orders. GOL obtained summary judgment for the adjudicator’s costs award of £44,453.25, with interest to be assessed if not agreed, and for the adjudicator’s fees. ARL obtained a declaration that the payment order was wrong because it failed to account for sums already paid or allowed. The valuations in paragraphs 1.1 to 1.3 and the first sentence of paragraph 1.4 remained binding unless varied in subsequent litigation.

Not stated in the judgment.