C & B Scene Concept Design Ltd V Isobars Ltd (Part I)
Technology and Construction Court
Mr Recorder Moxon Browne QC
20 June 2001
The contract incorporated JCT 81, clause 30.1 of which required an election to be made as to how interim payments were to be made. The parties failed to make such an election with the result that the Scheme for Construction Contracts applied. It was common ground that the employer’s letter disputing the payment applications was not served in time to satisfy the requirements of clause 30.3.3 of JCT 81 that a notice should be sent within five days of receipt of the application or the requirements of paragraphs 9 and 10 of the Scheme for Construction Contracts. The adjudicator found in favour of the contractor and awarded the contractor the full amounts claimed.
Mr Recorder Moxon Browne QC held that the interim payment provisions of the Scheme for Construction Contracts were implied into the contract. The adjudicator had addressed the wrong question in coming to his decision of whether the employer had complied with clause 30 of JCT 81 with the result that he exceeded his jurisdiction. This was on the basis that the payment provisions of clause 30 had been supplanted by the Scheme for Construction Contracts and that the adjudicator had been wrong in law to find that clause 30 continued to form part of the contract. The question he did ask was whether any of the payment applications had been the subject of a timely notice of intention to withhold payment. The question he should have asked was as to the value of the work done and/or materials supplied during the relevant periods covered by the applications.
The Court of Appeal overturned this decision on the basis that the adjudicator did answer the questions referred to him and that it was irrelevant whether he was wrong in reaching his decision. The adjudicator’s jurisdiction was determined by and derived its nature from the dispute referred so that if he determined matters over and beyond the dispute, he acted without jurisdiction. In the instant case the scope of the dispute was agreed, ie the contractor’s (lack of) entitlement to payment in respect of the interim payment applications in question. Even if the adjudicator was wrong in finding as a matter of law that clause 30.3.3 to .6 of JCT 81 applied, this error did not affect his jurisdiction.