Walker Construction Ltd v Quayside Homes Ltd (CA - 7.2.2014)
The burden of proof in and the applicable limitation period in respect of claims to overturn adjudicators decisions brought by an unsuccessful responding party in court or arbitration proceedings to finally determine the dispute
7 February, 2014
WALKER CONSTRUCTION LTD v QUAYSIDE HOMES LTD
Court of Appeal
Laws, McFarlane and Gloster LJJ
7th February 2014
Gloster LJ had occasion to comment on recent caselaw in relation to these two issues, although her comments did not set a binding precedent.
The first issue was the burden of proof. Lord MacFadyen stated in City Inn Limited v Shepherd Construction Limited that (i) An adjudicator's decision does not reverse the onus of proof in any such proceedings (ii) It is reading too much into the reference in the Construction Act to the adjudicator's decision being binding "until the dispute or difference is finally determined" to construe it as affecting the burden of proof and (iii) The burden of proof lies where the law places it and is unaffected by the decision.
Gloster LJ expressed “real difficulty” with Lord MacFadyen’s analysis because the defendant in such proceedings (the successful referring party in the adjudication) has been paid and has no need to bring court proceedings to claim payment or to seek a declaration that it was entitled to have been paid. She asked (rhetorically) why the defendant should not be entitled to contend, until the contrary was proved to the court's satisfaction, that (i) The adjudicator's decision remains binding and (ii) The onus of proof is on the claimant (the unsuccessful responding party in the adjudication) to adduce evidence and prove on that evidence that no such extension was justified. She also asked why the court should have to proceed on the incorrect hypothesis that the defendant had brought the court proceedings to claim what it had already been awarded.
The second issue was limitation. Judge Davies in Jim Ennis Construction Limited v Premier Asphalt Limited held that the date the cause of action for the court proceedings to overturn the adjudicator’s decision arose was when payment of the sum awarded by the adjudicator was made by the responding party. In contrast Akenhead J in Aspect Contracts (Asbestos) Ltd v Higgins Construction PLC held that the cause of action that for the (original) claim itself which formed the basis of the decision.
Gloster LJ preferred the decision of Akenhead J because when an unsuccessful responding party brings such court proceedings, it is doing so on the basis of its original rights under the construction contract to claim payment under the contract, damages for breach of contract or a negative declaration that it is not in breach. However, a differently constituted Court of Appeal in the Aspect case subsequently overturned Akenhead J’s decision, thus presenting the possibility of an appeal to the Supreme Court to finally determine this issue.