Legal Developments In Construction Law January 2021

Published date27 January 2021
Subject MatterCorporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
Law FirmMayer Brown
AuthorMayer Brown

1. Adjudicator's failure to consider substantial part of defence dooms enforcement

An employer's adjudication notice, seeking a true value adjudication of parts of a contractor's interim application, excluded a number of matters from the scope of the adjudication. The adjudicator considered that the employer was entitled to limit the scope of his jurisdiction but, in finding that the adjudicator was acting in breach of the rules of natural justice, in failing to consider and deal with matters relied on by the contractor in its defence, the court set out the applicable legal principles, in summary:

  • a referring party can define the dispute by its notice of adjudication and, in doing so, confine the dispute to specific parts of a wider dispute, such as valuation of particular work elements forming part of an interim application;
  • a responding party cannot, without consent, widen the adjudication's scope by adding further disputes under the contract but it can start separate adjudication proceedings in respect of other disputes;
  • a responding party can raise any defences it considers properly arguable but, in doing so, it is not widening the scope of the adjudication; it is engaging with, and responding to, the issues within the scope of the adjudication;
  • where the referring party seeks a declaration as to valuation of specific elements of the works, the responding party cannot seek a declaration as to valuation of other elements;
  • where, however, the referring party seeks payment in respect of specific elements of the works, the responding party can rely on all available defences, including valuation of other elements of the works, to establish that the referring party is not entitled to the payment claimed;
  • it is for the adjudicator to decide whether any defences amount to a valid defence in law and on the facts;
  • if the adjudicator asks the relevant question, the decision will be enforced. It is irrelevant whether the answer is right or wrong;
  • if the adjudicator fails to consider whether the matters relied on by the responding party amount to a valid defence in law and on the facts, that may be a breach of the rules of natural justice;
  • not every failure to consider relevant points will amount to a breach of natural justice. The breach must be material and a finding of breach will only be made in plain and obvious cases;
  • if there is a material breach of natural justice, the decision will not be enforced.

Global Switch Estates 1 Ltd v Sudlows Ltd [2020] EWHC 3314

2. Suspending work for non-payment = repudiation?

Repudiation of a contract...

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