Lulu Construction Ltd v Mullaley & Co Ltd (TCC - 17.3.2016)

Lulu Construction Ltd v Mullaley & Co Ltd (TCC - 17.3.2016)

The sum awarded by the adjudicator in respect of the sub-contractor’s debt recovery costs in conducting the adjudication begun by the contractor should be enforced by way of summary judgment
 
LULU CONSTRUCTION LTD V MULLALEY & CO LTD
TECHNOLOGY AND CONSTRUCTION COURT
JONATHAN ACTON-DAVIS QC SITTING AS A DEPUTY JUDGE OF THE TCC
17TH MARCH 2016

The contractor referred to adjudication a dispute concerning the value of the sub-contractor’s payment claim under the sub-contract. The sub-contractor brought claim for debt recovery costs in the form of the claimant’s costs of running the adjudication instituted by the contractor’s notice of adjudication pursuant to sections 1(1) and 5A(3) of the Late Payment of Commercial Debts (Interest) Act 1998. This claim was (unsurprisingly) not referred to in the notice of adjudication or the sub-contractor’s response and was raised for the first time in its rejoinder when it was met by a jurisdictional objection by the contractor. The adjudicator awarded the sub-contractor specified sums in respect of what he held to be the sub-contractor’s payment entitlement and of this claim. The contractor paid the sum awarded in respect of the sub-contractor’s payment entitlement but did not pay the sum awarded in respect of the sum awarded in respect of the sub-contractor’s debt recovery costs. The sub-contractor brought court enforcement proceedings to recover the debt recovery costs.

 

Jonathan Acton-Davis QC held that the sum awarded by the adjudicator in respect of the sub-contractor’s debt recovery costs in conducting the adjudication begun by the contractor pursuant to sections 1(1) and 5A(3) of the Late Payment of Commercial Debts (Interest) Act 1998 should be enforced by way of summary judgment.

 

The reason why the sub-contractor’s claim for the recovery of its debt recovery costs was not within the wording of the dispute referred by the contractor was the fact that the notice of adjudication was issued by the contractor. The contractor’s contention that the adjudicator did not have jurisdiction to award the debt recovery costs on the ground that the claim for them was not part of the dispute referred should be rejected. The debt recovery costs were clearly connected with and ancillary to the referred dispute and were properly to be considered part of it despite the facts that the claim for them was (unsurprisingly) not referred to in the notice of adjudication or the sub-contractor’s response and was raised for the first time in the sub-contractor’s rejoinder when it was met by a jurisdictional objection by the contractor.

 

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