A recent land mark decision in the High Court of Justice in Northern Ireland in the matter of D G Williamson Ltd .v. Northern Ireland Prison Service and Northern Ireland Office (Reference: MCL7361) created a further view on “evidence in writing” in respect of adjudication. McLaughlin J, one of our eminent and younger Judges took a very practical and even handed approach in dealing with the case. I will rehearse the issues.
Williamson, a Northern Ireland company was carrying out works for the Prison Service. It was something it had done for many years. A formal contract was entered in between the parties on or around October 2001, and works were carried out by the Plaintiff which raised 54 invoices which became the subject of a dispute or difference and low and behold the Plaintiff initiated adjudication procedures under the Construction Contract (NI) Order 1997 (which is essentially the same as that existing in the rest of the UK) for a disputed sum of money.
In due course the adjudicator gave his decision which ordered the Defendants to pay within 7 days, the sum of £261,898.76. There was an objection by the Defendant to the adjudication in that the adjudicator did not have jurisdiction, and in the usual flow of things the Plaintiff issued a summons dated 19th September 2008 seeking summary judgement against the Defendants under Order 14 RSC. The point here is that summary judgement against the Crown was not available and the proceedings were amended to seek a declaration to treat the hearing before the Judge as a final determination of the issue. The Defendants contended:
1. That the adjudicator had no jurisdiction to determine the dispute on the ground that the Notice of Adjudication issued by the Plaintiff referred only to the original contract concluded in October 2001 and not any further or extended contract applicable beyond 31st December 2006.
2. That the contract was not a “contract in writing” as required by the 1997 Order.
3. That if the adjudicator had jurisdiction and made a valid award the Judge should refuse enforcement on the same grounds in that the Defendants have entitlement to a Set Off which sum they stated was in excess of that due.
4. That if the adjudicator had jurisdiction to make a valid award and the Defendants were not entitled to a Set Off, there should be a stay of judgement which might otherwise be issued pending resolution of the Set Off claim at arbitration.
The Judge considered the objections. In the true form of good judging there was a deep consideration. You should read the entire judgement for yourself. It is good reading both for students, Lawyers and for Consultants. Leaving all the nitty gritty aside and the to-ing and fro-ing, the Judge decided the following:
1. That he was clear that there was in force at all relevant times a contract which was entirely valid and enforceable between the parties. (guidance was practical)
2. He found that the Adjudicator had jurisdiction to determine the issue of liability on the Defendants to pay the sums of money claimed, on the invoices which he was asked to consider, and that the adjudicator’s award was valid and enforceable.
3. The Set Off claim – the Judge recognised that the Set Off even by its own notion was at very early days. In fact he stated “he did not consider that he had been given any sufficiency cogent reason for refusing to enforce the awards simply on the basis that an inferred counter claim had been referred to arbitration”. He also went on to state that there was no suggestion if he granted enforcement of the adjudicators award, that there would be a problem recovering the money that had been paid out in the circumstances if the Defendant way have won at any future reference. He did not accept the arguments advanced on behalf of the Defendant in this regard and refused to aceed to the application.
4. Request for a stay – The Judge here indicated that given that the claim was no longer for summary judgement under Order 14 but for a declaration, he was satisfied that a remedy of declaration was a discretionary remedy.
Furthermore, he decided he proposed to make the declaration sought and the Defendant should pay the sum claimed together with interest within 14 days of the declaration etc. This was a very practical approach to an issue that arises consistently throughout the tenure of adjudication. The Judge considered all the learned facts from other precedential cases and applied the law sensibly, it is new law but more importantly it is direction!
Contractors should read this.
The Plaintiff was supported by Nigel Brown of McIldowies Solicitor, a very able fellow, and aided by Monya Daines QC and Michael Humpries Barrister-of-Law, all from the Northern Ireland Bar Library. Remember in Northern Ireland the Bar is general practice however there are one or two specialists and they are good. The Defendants are respectfully looked after by Crown Solicitors and Mr Henshaw, Council. The nub of the matter is this, adjudication was brought in for an interim relief and the Judge recognised that. He also recognised the equity that an interim relief should not be blocked. I think his judgement goes along way to removing the shenanigans, as we say in Ireland, that are purported and played in respect of cases like this. The day of accountability is here and we could be well advised the Judges will seek to enforce equitable remedies in a practical way.A recent land mark decision in the High Court of Justice in Northern Ireland in the matter of D G Williamson Ltd .v. Northern Ireland Prison Service and Northern Ireland Office (Reference: MCL7361) created a further view on “evidence in writing” in respect of adjudication. McLaughlin J, one of our eminent and younger Judges took a very practical and even handed approach in dealing with the case. I will rehearse the issues.
Williamson, a Northern Ireland company was carrying out works for the Prison Service. It was something it had done for many years. A formal contract was entered in between the parties on or around October 2001, and works were carried out by the Plaintiff which raised 54 invoices which became the subject of a dispute or difference and low and behold the Plaintiff initiated adjudication procedures under the Construction Contract (NI) Order 1997 (which is essentially the same as that existing in the rest of the UK) for a disputed sum of money.
In due course the adjudicator gave his decision which ordered the Defendants to pay within 7 days, the sum of £261,898.76. There was an objection by the Defendant to the adjudication in that the adjudicator did not have jurisdiction, and in the usual flow of things the Plaintiff issued a summons dated 19th September 2008 seeking summary judgement against the Defendants under Order 14 RSC. The point here is that summary judgement against the Crown was not available and the proceedings were amended to seek a declaration to treat the hearing before the Judge as a final determination of the issue. The Defendants contended:
- 1. That the adjudicator had no jurisdiction to determine the dispute on the ground that the Notice of Adjudication issued by the Plaintiff referred only to the original contract concluded in October 2001 and not any further or extended contract applicable beyond 31st December 2006.
- 2. That the contract was not a “contract in writing” as required by the 1997 Order.
- 3. That if the adjudicator had jurisdiction and made a valid award the Judge should refuse enforcement on the same grounds in that the Defendants have entitlement to a Set Off which sum they stated was in excess of that due.
- 4. That if the adjudicator had jurisdiction to make a valid award and the Defendants were not entitled to a Set Off, there should be a stay of judgement which might otherwise be issued pending resolution of the Set Off claim at arbitration.
The Judge considered the objections. In the true form of good judging there was a deep consideration. You should read the entire judgement for yourself. It is good reading both for students, Lawyers and for Consultants. Leaving all the nitty gritty aside and the to-ing and fro-ing, the Judge decided the following:
- 1. That he was clear that there was in force at all relevant times a contract which was entirely valid and enforceable between the parties. (guidance was practical)
- 2. He found that the Adjudicator had jurisdiction to determine the issue of liability on the Defendants to pay the sums of money claimed, on the invoices which he was asked to consider, and that the adjudicator’s award was valid and enforceable.
- 3. The Set Off claim – the Judge recognised that the Set Off even by its own notion was at very early days. In fact he stated “he did not consider that he had been given any sufficiency cogent reason for refusing to enforce the awards simply on the basis that an inferred counter claim had been referred to arbitration”. He also went on to state that there was no suggestion if he granted enforcement of the adjudicators award, that there would be a problem recovering the money that had been paid out in the circumstances if the Defendant way have won at any future reference. He did not accept the arguments advanced on behalf of the Defendant in this regard and refused to aceed to the application.
- 4. Request for a stay – The Judge here indicated that given that the claim was no longer for summary judgement under Order 14 but for a declaration, he was satisfied that a remedy of declaration was a discretionary remedy.
Furthermore, he decided he proposed to make the declaration sought and the Defendant should pay the sum claimed together with interest within 14 days of the declaration etc. This was a very practical approach to an issue that arises consistently throughout the tenure of adjudication. The Judge considered all the learned facts from other precedential cases and applied the law sensibly, it is new law but more importantly it is direction!
Contractors should read this.
The Plaintiff was supported by Nigel Brown of McIldowies Solicitor, a very able fellow, and aided by Monya Daines QC and Michael Humpries Barrister-of-Law, all from the Northern Ireland Bar Library. Remember in Northern Ireland the Bar is general practice however there are one or two specialists and they are good. The Defendants are respectfully looked after by Crown Solicitors and Mr Henshaw, Council. The nub of the matter is this, adjudication was brought in for an interim relief and the Judge recognised that. He also recognised the equity that an interim relief should not be blocked. I think his judgement goes along way to removing the shenanigans, as we say in Ireland, that are purported and played in respect of cases like this. The day of accountability is here and we could be well advised the Judges will seek to enforce equitable remedies in a practical way.
Adrian Kearney is a Chartered Arbitrator and Director of Kearney Consulting Ltd who are Consultants and Experts in the Built Environment - Dispute Resolution & Building Surveying.
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