C & B Scene Design Concept Ltd V Isobars Ltd (Part II)

C & B Scene Design Concept Ltd V Isobars Ltd (Part II)

Adjudicator did ask himself the right question when deciding that the contractual payment provisions had not been complied with notwithstanding that the judge at first instance held them not to apply

Court of Appeal
Potter and Rix LJJ and Sir Murray Stuart-Smith
31 January 2002

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 at first instance held that the adjudicator had addressed the wrong question in coming to his decision of whether the employer had complied with clause 30 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 Court of Appeal overturned the decision of the judge at first instance 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 and that the employer’s failure to serve the necessary notices thereunder meant that the contractor was entitled to summary judgment, this error did not affect his jurisdiction


Advice Note

An adjudicator cannot be said to have acted outside his jurisdiction if he bases his decision on the wrong conditions of contract provided that his finding as to which conditions applied was made in order to resolve the dispute referred.