Workplace Technologies -v- E Squared Limited and Mr J L Riches
The sub-contractor should be awarded the costs of the hearing at which the contractor indicated that it would not pursue its application for an injunction preventing the sub-contractor from continuing with the adjudication it had started against the contractor
16 February, 2000
The sub-contractor served a notice of intention to refer disputes to adjudication. An adjudicator was appointed. The contractor contended from the start that the sub-contract came into existence before the Construction Act 1996 came into effect with the result that the adjudicator had no jurisdiction. The contractor applied to the court for declarations that the sub-contract was entered into before section 108 of the Act came into force, as to the sub-contract terms and when it came into existence and that the adjudicator had no jurisdiction together with an injunction preventing the sub-contractor from continuing with the adjudication. The contractor applied for an interlocutory injunction but at a hearing for directions decided not to pursue that application in view of the early hearing date secured for the final determination of its applications for declarations. Judge Wilcox held that the sub-contract was entered into after the Act came into force. He also held that the sub-contractor should be awarded the costs of the directions hearing. This was because there was no power to grant an injunction to restrain a party from starting a void adjudication reference and pursuing proceedings which, as in the instant case, were themselves void and might give rise to a void and thus unenforceable adjudication decision. Although in most adjudication cases it would perhaps be difficult to satisfy the threshold test of there being a serious question to be tried with the result that the balance of convenience favoured allowing the adjudication process to continue, the issue in the instant case of when the sub-contract was concluded satisfied that test. If an injunction were to have been granted without determining this issue, the statutory scheme of giving an early decision as to which party should hold the money pending the final resolution by litigation or arbitration would have been frustrated. Advice Note The courts wish to interfere as little as possible with the conduct of adjudications. Judge Wilcox in his judgment emphasised that the correct way of determining whether a contract was entered into before the Construction Act came into effect (and by implication any other jurisdictional issue) was to apply for the appropriate declaration from the court rather than applying for an injunction to prevent the adjudication from proceeding.