O'Donnell Developments Ltd v Build Ability Ltd

An adjudicator may correct an accidental error or omission under an implied slip rule, provided the correction gives effect to the adjudicator’s first thoughts and is made within a reasonable time. A court should distinguish between an adjudicator exercising a jurisdiction that does not exist and exercising an existing jurisdiction incorrectly. It should not characterise a mistaken application of the slip rule as an excess of jurisdiction. Information supplied by a party may contribute to a slip, without preventing correction where the adjudicator concludes that the decision did not reflect the intended result.

O’Donnell Developments Limited sought summary judgment to enforce adjudication decisions concerning the value of subcontract works and deductions from interim valuations. Build Ability Limited accepted most of the sum claimed but disputed a correction made by the adjudicator to Adjudication 8A. The correction increased the amount payable by £148,468.67 because a payment relating to loss and expense awarded in an earlier adjudication had been deducted from sums due under a later valuation.

Build Ability also sought a stay of execution, but withdrew that application before the hearing. The remaining issues were whether the correction was within the implied slip rule and how the costs of the two applications should be dealt with.

1. Summary judgment. O’Donnell Developments Limited was entitled to summary judgment for £148,468.67 under the corrected Adjudication 8A decision.
2. Jurisdiction and the slip rule. The court accepted that the subcontract contained an implied term permitting an adjudicator to correct an accidental error or omission within a reasonable time. The rule may operate after the period for issuing the original decision has expired, because the correction takes effect as a correction to the decision reached in time. The rule permits correction of a patent error to give effect to the adjudicator’s first thoughts or intentions, rather than second thoughts.
3. The court distinguished an exercise of a jurisdiction that does not exist from an erroneous exercise of an existing jurisdiction. If no express or implied slip rule existed, an adjudicator purporting to use one would act outside jurisdiction. Where the adjudicator accepts that a slip within the rule has occurred, an error of fact or law in exercising that power does not ordinarily take the matter outside jurisdiction. The court should guard against treating a mistaken answer to a question within the reference as an excess of jurisdiction.
4. Both parties had supplied similar payment figures. The adjudicator intended to deduct only payments relevant to Application for Payment 25, but inadvertently included a payment for loss and expense awarded in Adjudication 7. The correction therefore gave effect to his first intention and was not a reconsideration based on second thoughts. The court should not interfere with that exercise of jurisdiction.
5. Costs. O’Donnell Developments Limited was awarded the costs of the summary judgment application on an indemnity basis up to 25 November 2009, when several abandoned grounds of challenge had caused unnecessary work, and on the standard basis thereafter. It was also awarded the costs of the withdrawn stay application on the standard basis. A claiming party is not obliged to provide widespread disclosure of its financial and business information merely to enable the opposing party to investigate a possible stay.