Benfield Construction Limited v Trudson (Hatton) Limited

An adjudicator has no jurisdiction where the same or substantially the same dispute has previously been the subject of an adjudicator’s decision. If the underlying dispute is the same in successive adjudications then an adjudicator will not have jurisdiction, even if the legal issues which are raised in those successive adjudications differ from those raised in the original adjudication.

Mr Justice Coulson, Queen’s Bench Division, Technology and Construction Court

Background

Trudson engaged Benfield to carry out works pursuant to a JCT Form of Contract (With Contractor’s Design) 1998 edition, which provided for liquidated damages in the event that the date for completion was not met. The works were seriously delayed but the parties nonetheless signed a handover form, which Benfield subsequently alleged was a written statement confirming practical completion.

Trudson commenced two adjudications against Benfield. The same adjudicator was appointed in both adjudications. In the first adjudication Trudson sought a declaration that practical completion had not occurred and in the second it sought liquidated damages. In considering the first adjudication, the adjudicator concluded that practical completion had not occurred. In the second adjudication it followed that Trudson was entitled to liquidated damages. Benfield subsequently initiated a third adjudication in which it sought a declaration that, notwithstanding the decision of the adjudicator in the first two adjudications, Trudson was not in fact entitled to liquidated damages. Benfield relied upon a legal argument that had not been put forward in the first two adjudications, namely that Trudson had taken partial possession of the project on the date of the handover form and as such had no right to liquidated damages (as, under the contract, practical completion should be deemed to have occurred on the date of partial possession). A different adjudicator was appointed in the third adjudication. He found that practical completion should be deemed to have occurred on the date of handover form and as such that Trudson was not entitled to liquidated damages after that date. The third adjudicator considered that practical completion and partial possession were two different aspects of the same contract, and that he therefore had jurisdiction to decide the partial possession issue, even though his decision could potentially alter the outcome of the previous adjudicator’s conclusion on liquidated damages.

Issues

Benfield sought enforcement of the decision of the adjudicator in the third adjudication. In refusing enforcement, Coulson J sought to clarify the rules concerning serial adjudication.

Decision

Coulson J refused enforcement on the following three grounds:

1. The factual similarities between the case at hand and the judgment of Ramsey J in HG Construction Limited v Ashwell Homes (East Anglia) Limited [2007] EWHC 144
2. The dispute in the third adjudication was the same or substantially the same as the dispute that had been decided in the first and second adjudications. Importantly, Coulson J held that there were no different material facts presented in the third adjudication which had not already been presented (and dealt with) in the previous adjudications. Coulson J also stressed that even if the legal issues/arguments before an adjudicator differ from those raised or deployed in preceding adjudications, the adjudicator will still lack jurisdiction if the underlying dispute is the same as in previous adjudications.
3. Issue estoppel and the prohibition against serial adjudication. Coulson J held that Benfield was essentially estopped from relying on the partial possession argument in the third adjudication because it could have done so in the earlier adjudications and chose not to. It would be an abuse of the adjudication system if a party were allowed to raise one issue at a time in serial adjudications over several months or years until that party achieved the result that it liked.

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