Watkin Jones & Son Ltd v Lidl UK GMBH (Part I)
Technology and Construction Court
His Honour Judge Moseley QC
The adjudicator awarded the contractor a specified sum of money in his decision. The employer refused to pay the amount awarded. The contractor brought court enforcement proceedings. The employer resisted enforcement on the ground that there was no dispute factually insofar as the application was for a final account and that there could be no dispute until the time for payment of that account had arrived. The contractor submitted that if the contractor's application was for an interim payment (as the adjudicator held), it followed inextricably after the period specified in JCT 98 that there was a dispute in the absence of a payment by the employer.
Judge Moseley held that a dispute had arisen and that the decision should therefore be enforced. In the Court of Appeal decision of Halki Shipping v Sopex Oils (1998), Swinton Thomas LJ stated that once money was claimed, there was a dispute unless and until the defendant admitted that the sum claimed was due and payable. The decision in Halki when applied to the facts of the instant case meant that there was a dispute by reason of the employer's non-payment whether or not the employer was investigating the figures contained in the application or knew that there was a dispute. Judge Thornton was wrong in stating in Fastrack Contractors v Morrison Construction (2000) that a dispute only arose when a claim had been notified and rejected (even if there was no discernible answer to it in fact or law) and a rejection could only occur when the party to whom the claim had been submitted refused to answer it. This was because his decision was irreconcilable with the Court of Appeal’s reasoning in Halki and defined "dispute" too narrowly. Any court of first instance was bound by the Court of Appeal’s decision in Halki to find that it was not necessary for the party to whom the claimant was submitted to refuse to answer or to reject it.
Judge Moseley is of the opinion that there can be a dispute for adjudication purposes merely because a defendant does not admit that a sum is due whereas other judges take the view that there must be a process of negotiation resulting in the rejection of a claim before it can be said that there is a dispute.