Thursday, 7 October 2021

Quadro Services Ltd v Creagh Concrete Products Ltd

[2021] EWHC 2637 (TCC)

Quadro sought summary enforcement of an adjudication decision against Creagh, who said that the adjudicator had no jurisdiction because three disputes were referred to them. An adjudicator will not have jurisdiction to adjudicate more than one dispute in a single adjudication.

Here, during the course of the project, Quadro made applications for payment and raised invoices for the amounts claimed. Three invoices were outstanding, two were approved by Creagh’s QS, one was apparently not replied to at all. The payment applications were cumulative, with each payment application being for the full value of the work done, less the previous payment applications. No pay less notices were issued in respect of any of the applications. The total value outstanding was £40,026.

Quadro was owed monies by Creagh on four other contracts and an issue was said to have arisen over works at one of these sites. In the adjudication, Creagh said that the adjudicator did not have jurisdiction because Quadro had referred three separate disputes under one notice and referral, i.e., the three applications for payment. Quadro said that the dispute was the failure to pay a debt in the sum of £40k under one contract for works that they had carried out for Creagh. Any issue as to the consideration of the sums agreed and rendering of the invoices were sub-issues to be considered in resolving that one dispute – namely, the debt. Creagh took no further part in the adjudication. The adjudicator considered that “a single dispute had been referred, namely a dispute over an amount owed”.

Before HHJ Watson, Creagh said that the claims here could be decided without reference to each other. The questions of whether there was a valid payment application, the due date, the final date of payment, whether a pay less notice was served, and whether the final date for payment had passed, had to be considered separately for each claim.

The Judge considered that one dispute could include numerous sub-issues which might be capable of being determined independently from each other. Whether they were sub-issues or separate disputes was a question of fact.

Here, the dispute that was referred was the failure to pay £40k. Whilst Creagh were correct to say that the adjudication involved the consideration of the payment process of three separate payment applications, each of which could be decided in isolation from the other, this was not the case here, because Creagh had not taken any issue with the payment process before the adjudication. It had not raised any issue as to the validity of the payment applications or suggested that it had issued any pay less notices. It had simply not paid and had raised a claim on another project. 

The result was that, in the absence of any substantive dispute as to liability to pay the invoices, the adjudicator considered the validity of the payment notices and concluded they were valid applications for payment. That it was “technically” possible to determine whether each individual invoice was due without determining whether the other invoices were due did not mean that those issues could not be sub-issues in the wider dispute as to whether Quadro was entitled to the sum it claims it was due under the contract. The Judge further noted that, if Creagh’s argument was correct, then:

“the result would be that the parties would be put to the very significant cost and inconvenience of numerous separate adjudications to recover a single claimed balance under a single contract. That would be contrary to the policy underlying the adjudication process of efficient, swift and cost-effective resolution of disputes on an interim basis.”

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