Brown & Anor v Complete Buildings Solutions Ltd

Under the Scheme for Construction Contracts (England and Wales) Regulations 1998, a party cannot refer the same or substantially the same dispute to a second adjudicator. The comparison must consider what the first adjudicator actually decided, not merely the issues originally referred. The question is one of fact and degree. A later referral may concern a distinct dispute where it relies on a new contractual notice and seeks consequences not previously decided. The result may differ where the later referral merely cures a defect in the earlier notice.

The appellants engaged the respondent to demolish a house and build a replacement under a JCT Minor Works Building Contract. The first adjudicator held that the final certificate was ineffective and that the respondent’s December 2013 letter was not a valid payment notice.

The respondent later served a new notice and commenced a second adjudication concerning the same claimed payment. The second adjudicator found that the new notice created a different dispute and ordered payment. The Technology and Construction Court entered judgment and later dismissed the appellants’ application to set aside that judgment. The central issue on appeal was whether the second adjudicator lacked jurisdiction under Regulation 9.2 because the dispute was the same or substantially the same as the first.

The Court of Appeal unanimously dismissed the appeal.

1. Under Regulation 9.2 of the Scheme for Construction Contracts (England and Wales) Regulations 1998, an adjudicator must resign where the dispute is the same or substantially the same as a dispute previously referred and decided. The parties remain bound by the first decision until final determination by a court or arbitration, or later agreement. The applicable principles were summarised in Benfield Construction Ltd v. Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC), adopting the summary in HG Construction Ltd v. Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 (TCC).
2. The scope of the first reference and, importantly, the first adjudicator’s actual decision must be compared with the second reference. Complete identity of factual and legal issues is unnecessary. Whether disputes are the same or substantially the same is a question of fact and degree. The court should give due respect to the adjudicator’s assessment, consistently with Quietfield Limited v. Vascroft Construction Limited [2006] EWCA Civ 1737, Matthew Harding (trading as M J Harding Contractors) v. Paice and Springhall [2015] EWCA Civ 1281 and Carillion Construction Ltd v. Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358.
3. The first adjudicator decided that the December 2013 letter was ineffective. The second adjudication concerned the different consequences of a new notice served in April 2014. It did not seek to redetermine anything decided in the first adjudication. The fact that both references concerned the same sum and depended on the ineffective final certificate did not make them substantially the same. The respondent was pursuing a new contractual route, rather than curing a defect in the earlier notice.
4. The court noted that the analysis might differ where a later referral merely cures an earlier notice defect and relies on that notice. That was not the position here. The second adjudicator therefore had jurisdiction, and the first-instance judgment was upheld.

1. Court of Appeal (Civil Division) — In [2016] EWCA Civ 1, the appeal was dismissed. Simon LJ gave the judgment, with which Beatson LJ and Sir Robin Jacob agreed.
2. Technology and Construction Court, Manchester District Registry — HH Judge Raynor QC entered judgment for the respondent on 10 July 2014 and, on 14 October 2014, dismissed the appellants’ application to set aside that judgment. The Court of Appeal dismissed the appeal from that decision.