Allied P&L Ltd v Paradigm Housing Group Ltd

A dispute for adjudication requires a communicated claim, assertion or position which the other party expressly rejects or does not accept. The dispute is identified when the contractual adjudication process begins. Its scope is not necessarily confined by the evidence or arguments exchanged beforehand, but consequential relief must remain ancillary to the essential dispute. Knowledge that a claim may later arise does not itself crystallise that claim.

A party challenging jurisdiction must reserve its position clearly. A reservation directed to one specific, unsuccessful ground will generally amount to submission to jurisdiction on other grounds. Where jurisdiction exists over separate disputes, an adjudicator’s decision may be severed unless it is practically inseparable or the excess of jurisdiction taints the whole decision.

Allied was engaged by Paradigm to construct housing and related works. Paradigm withheld an interim payment and served notices alleging breaches which entitled it to determine the contract. Allied denied the breaches and Paradigm’s entitlement to terminate. Paradigm subsequently determined the contract and ejected Allied.

Allied referred to adjudication the validity of the determination and claims for unpaid work, damages and loss of profit. The adjudicator found that the determination was invalid and awarded Allied £274,279.35. Paradigm resisted enforcement, arguing that the financial claims had not crystallised before the adjudication and that it had reserved its jurisdictional objections. The central issues were the scope of the crystallised dispute and the effect of Paradigm’s reservation and participation.

1. The adjudicator’s decision was enforced. Judgment was entered for Allied, together with agreed interest of £4,791.75. Paradigm was ordered to pay the adjudicator’s fees, interest and assessed costs within 14 days.
2. By 3 June 2009 there was a crystallised dispute about whether the breaches relied upon in Paradigm’s first notice existed and justified determination, and whether they continued or were repeated before the second notice. A dispute arises where one party communicates a claim, assertion or position and the other rejects or fails to accept it. The court adopted an inclusive and non-legalistic approach, consistent with Balfour Beatty Engineering Services (HY) Ltd v Shepherd Construction Ltd [2009] EWHC 2218 (TCC), Amec Civil Engineering Ltd v The Secretary of State for Transport [2005] BLR 63 and Bovis Lend Lease Ltd v The Trustees of the London Clinic [2009] EWHC 64 (TCC).
3. The dispute did not, on the evidence available, include claims for the financial consequences of an unlawful determination. Allied had not communicated any such claim before the notice of adjudication. Paradigm’s knowledge that financial consequences might follow was insufficient to crystallise those claims. Nevertheless, the adjudicator had jurisdiction to decide the validity of the determination and could find, as ancillary and incidental matters, that the invalid determination amounted to repudiatory conduct accepted by Allied.
4. Paradigm’s references to the absence of a letter of claim did not constitute an effective jurisdictional objection. The adjudication clause and the Housing Grants Construction and Regeneration Act 1996 imposed no such formal precondition. Paradigm had expressly reserved its position only on stated grounds which were abandoned or unjustified. It therefore acceded to the adjudicator’s jurisdiction over the claims in the referral. The court applied the reservation principles discussed in The Project Consultancy Group v The Trustees of the Gray Trust [1999] BLR 377.
5. The court approved the severability approach stated in Cantillon Ltd v Urvasco Ltd [2008] EWHC 2218 (TCC): separate disputes may be enforced separately unless the decision is practically inseparable or the jurisdictional defect taints the remainder. That issue did not prevent enforcement here because Paradigm’s effective reservation failed and the adjudicator’s decision was enforceable in full.

Allied’s costs were assessed at £20,500 on the standard basis. Indemnity costs were refused.