John Cothliff Limited -v- Allen Build (North West) Limited
The adjudicator's award of costs in his decision under the Housing Grants, Construction and Regeneration Act 1996 should be enforced by way of summary judgement
29 July, 1999
The sub-contractor referred a dispute to adjudication under the Construction Act 1996. The Scheme for Construction Contracts applied to the adjudication. The adjudicator made his decision in the sub-contractor's favour and included a costs award against the contractor. The sub-contractor applied to the court to enforce the decision, including the costs award, by way of summary judgement. Judge Marshal Evans held that the award to the sub-contractor of the costs of the adjudication should be enforced by way of summary judgement. This was on the basis that the adjudicator had the power to award costs where they had been expressly sought in the referring party's application and where the other party was represented by lawyers. The Scheme for Construction Contracts plainly needed a purposive construction insofar as it was intended to provide a swift and cheap means of resolving disputes on an interim basis. The adjudicator's powers under the Scheme were intended to give the adjudicator for general power to control, regulate and direct matters relating to the procedure, including its implementation and conduct and sufficiently wide to give the adjudicator a discretion as to whether it was appropriate to make a costs award or adjust the award by assessing the proper level of total costs and proportioning the amount payable by stages. An adjudicator's decision was plainly to be enforced unless it was void, ultra vires or null etc, which it was not in the instant case. In any event the costs element of a decision was open to revision by an arbitration award or court judgment. In these circumstances it was appropriate to imply a contractual term that the adjudicator should have the power to award costs in an adjudication under the Scheme. This would give effect to what in reality was business efficacy to the contract and as a necessary incident of a construction contract containing adjudication provisions in accordance with the principles for implying terms. Advice Note Judge Bowsher in Northern Developments v J & J Nichol (2000) disagreed that there was an implied term for an adjudicator to make an award of costs under the Scheme for Construction Contracts. Whilst there is no Court of Appeal guidance to resolve this conflict of view at first instance, the generally held view is that Judge Bowsher's view is the correct one.