RMP Construction Services Ltd v Chalcroft Ltd (TCC - 21.12.2015)
The sub-contractor submitted an interim payment application. The contractor did not serve a payment notice, did serve a pay less notice and did not pay the sum applied for. It was common ground that the pay less notice was not served in time for it to be valid if the dates in the Scheme for Construction Contracts applied. The sub-contractor began an adjudication in which it claimed the sum applied for. The contractor disputed the sub-contractor's account of when and how the sub-contract had been entered into and proposed its alternative analyses of how and when the sub-contract was formed. The adjudicator accepted the sub-contractor’s case as to contract formation and awarded it the sum claimed on the basis that the contractor had failed to serve a valid pay less notice.
Stuart-Smith held that the adjudicator had jurisdiction to award the sum applied for due to the contractor’s failure to serve a valid pay less notice despite the contractor’s contention that the sub-contract did not contain the payment provisions of the Scheme for Construction Contracts on which he based his decision being reasonably arguable.
The judge stated that however the contractual arrangements between the parties were correctly to be described, the adjudicator had jurisdiction because (i) Regardless of which party was correct in its contention as to how the sub-contract came to be entered into, they mandated the use of the adjudication provisions of the Scheme for Construction Contracts and (ii) The adjudicator was properly appointed under the Scheme's procedure.
The possible difference in substantive outcome that could arise from identifying the sub-contract correctly should not be ignored insofar as it was reasonably arguable that the contractor was correct to contend that (i) The sub-contract was formed by the sub-contractor’s acceptance of its order and therefore incorporated that order and (ii) That order’s payment provisions meant that the adjudicator's substantive decision that the contractor did not serve a valid pay less notice was wrong. However, it was consistent with the legal policy and authority in relation to enforcing adjudicators’ decision to treat this substantive difference as going not to jurisdiction but only to the substantive decision.