Ex Novo Limited v MPS Housing Ltd

An adjudicator appointed under an admitted construction contract may decide whether later dealings were variations of that contract or separate contracts only where that question forms part of the substantive dispute referred to the adjudicator. A decision required merely to determine jurisdiction is not thereby made unchallengeable. The court must ask why the decision was necessary and whether it was necessary to resolve the substantive dispute after jurisdiction was established. Contemporary documents and commercial common sense may show that several work instructions formed part of one contract. On the evidence, the adjudicator’s conclusion that there was one varied contract had no real prospect of being shown wrong and the award was enforceable.

The claimant applied for summary judgment to enforce an adjudicator’s award of £307,357.45. The defendant argued that the adjudicator lacked jurisdiction because the reference concerned disputes arising under at least four separate contracts. The claimant maintained that there was one contract formed in November 2018, varied as to pricing, under which later property works were instructed. The central issues were whether the adjudicator could conclusively determine the single-contract or multiple-contract question, and whether the defendant had a real prospect of establishing that the works arose under separate contracts.

1. Summary judgment test. The resistance to enforcement had to have a real, rather than fanciful, prospect of success. That test was applied in light of adjudication’s cashflow policy and the principle of pay now and argue later.
2. Jurisdiction and substance. The authorities, including Thomas-Fredric's (Construction) Ltd v Keith Wilson, [2004] BLR 23, established the basic principle that an adjudicator cannot confer jurisdiction on himself. The analysis in Air Design (Kent) Limited v Deerglen (Jersey) Limited, [2008] EWHC 3047 (TCC), as explained in Camillin Denny Architects Ltd v Adelaide Jones & Co, [2009] EWHC 2110 (TCC), Supablast (Nationwide) Ltd v Story Rail Ltd, [2010] EWHC 56 (TCC), and Viridis UK v Mullaley and Company Limited, [2014] EWHC 268 (TCC), required a distinction between a preliminary jurisdictional question and a question forming part of the substantive dispute.
3. A determination is unchallengeable only where it was necessary not merely to conduct the adjudication, but also to resolve the referred dispute once jurisdiction was established. Here, the single-contract or multiple-contract issue was necessary to decide whether the adjudicator had jurisdiction, but was not necessary to decide the substantive pay-less-notice and valuation issues. The adjudicator’s decision on jurisdiction was therefore challengeable.
4. Single contract. The contemporary documents persuasively indicated one contract, with later instructions operating as call-offs and a subsequent variation to the discount. The defendant’s case on multiple contracts had no real prospect of success. The adjudicator was therefore properly exercising jurisdiction and the award was enforceable.
5. Severance. The issue was academic. The judge nevertheless indicated that, had there been a reference under multiple contracts without jurisdiction, he would have been very wary of severing and enforcing parts of the award. The tentative suggestion in Willow Corporation v MTD Contractors, [2019] EWHC 1591 (TCC), did not overcome the difficulty of identifying which parts of an award were valid.

Summary judgment was entered for the claimant for the full amount claimed.