Witney Town Council v Beam Construction (Cheltenham) Ltd

For the purposes of construction adjudication, a dispute generally arises when a claim or assertion is expressly or implicitly challenged. A dispute may contain several issues, claims or causes of action, but everything in issue between the parties does not necessarily constitute one dispute. The question is fact-sensitive and should be approached commercially, without over-legalistic analysis.

The notice and referral notice are relevant but not conclusive. The court must consider the underlying circumstances. Where separate claims are so linked that one cannot be decided without deciding all or part of another, they may form one dispute. Absent agreement, however, two genuinely separate disputes cannot be referred to one adjudicator.

The Council employed Beam under a JCT design and build contract for construction of a community hall. Disputes arose concerning practical completion, extensions of time, valuation, the final account, retention, interest, termination and alleged repudiation.

Beam referred the matters to adjudication under the Scheme for Construction Contracts. The adjudicator rejected the Council’s jurisdictional objection, treated the reference as one dispute concerning what was due to Beam, and ordered payment. Beam sought enforcement in related proceedings, while the Council sought declarations that the decision was unenforceable because multiple disputes had been referred.

The central issue was whether, on the facts and against the commercial background, the reference concerned one dispute or several separate disputes.

1. Judgment for Beam. The adjudicator had jurisdiction and his decision was enforced.

2. A dispute generally arises when one party makes a claim or assertion which the other expressly or implicitly challenges. Its scope is a question of fact, although the facts may require interpretation. A dispute may comprise one issue or many issues. It may develop or change as the parties’ positions evolve.

3. Commercial construction contracts should be construed sensibly. The court should avoid an over-legalistic analysis. Everything in issue when adjudication is commenced does not necessarily constitute one dispute, although one dispute may encompass several causes of action, heads of claim or issues.

4. The notice of adjudication and referral notice are relevant but not necessarily determinative. The court must examine the background and characterise the dispute referred. If there are two separate and distinct disputes, only one may be referred to an adjudicator without the parties’ agreement. A useful, though not invariable, guide is whether disputed claim 1 cannot be decided without deciding all or part of disputed claim 2.

5. On the facts, the dispute was what sum was due to Beam. The draft final account had been replaced by the later final account. The claims for prolongation, retention, insurance and related sums were linked to issues concerning extension of time, practical completion and termination. Interest was included in the final account and was within the adjudicator’s jurisdiction under paragraph 20 of the Scheme. The adjudicator therefore had jurisdiction to determine the reference.

6. Although aspects of the adjudicator’s reasoning were unusual or imperfectly expressed, including his treatment of liquidated damages and interest, the substance of his decision was sufficiently clear and remained enforceable.