Adjudication Matters December 2016: Festive Edition – Part 2

20th December 2016

Welcome to Part 2 of the festive edition of Adjudication Matters.

The results are in!

Thank you to everyone for taking part. We will contact the winner direct regarding your prize which we hope you enjoy over the Christmas period!

Below are the correct answers to our Christmas Quiz.

Merry Christmas!

1. What is the correct and full name of the Construction Act? (1 mark)

Housing, Grants, Construction and Regeneration Act 1996

2. What are the 4 basic requirements for a notice of adjudication as set out at paragraph 1 of the Scheme for Construction Contracts 1998? (4 marks)

a. Brief description of the dispute and parties

b. Details of when the dispute arose

c. Nature of redress sought

d. Names and addresses of parties to the contract.

3. A collateral warranty is not a “construction contract” for the purposes of the Construction Act 1996. True or False? (1 mark)

The answer is False; Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd [2013] EWHC 2665 (TCC) sets out that a collateral warranty was caught by the Construction Act so as to be subject to statutory adjudication rules.

4. Can a dispute regarding whether or not a signed settlement agreement has been entered into, be referred to adjudication? (1 mark)

The answer is No. The case of J Murphy & Sons Ltd v W Maher and Sons Ltd [2016] EWHC 1148 (TCC) sets out the principle which was discussed here.

5. If a contract is silent as to payment terms, what timescales does the Scheme for Construction Contracts 1998 set out for the due date and final date for payment? (2 marks)

a. Due Date: the later of ___ days following the relevant period or the making of a claim by the payee

b. Final Date for Payment: ___ days from the due date.

Paragraph 4 and 8 of the Scheme set out that the Due Date is to be 7 days following the relevant period and the Final Date for Payment is to be 17 days from the Due date.

6. Can an adjudicator consider events occurring after the adjudication has commenced? (1 mark)

Yes. Goldsworthy & Others v Harrison & Another [2016] EWHC 1589 (TCC) outlined that an Adjudicators decision must be made on the basis of the facts as they are at the time of the decision.

7. The Construction Act 1996 only applies to “construction contracts” for the carrying out of “construction operations” or “providing labour”. Which 2 of the following activities are “construction operations” under the Construction Act? (2 marks)

a. Construction of self-contained bedroom units at a motel

Yes but is dependent on the degree of annexation to the land.

b. A contract to find and negotiate a land purchase

No. A contract to find and negotiate a land purchase is not a construction operation as it does not involve anything to do with building works or works on the land. Husband and Brown Ltd v Mitch Developments Ltd [2015] EWHC 2900 (TCC)

c. Installation of shopfitting items bolted to the floor

No. HHJ Seymour QC held that they were only bolted to the floor to ensure stability. The equipment could be moved “as goods come and go and the seasons change”. It was not a “construction operation”. Gibson Lea Retail Interiors Ltd v Makro Self Service Wholesalers Ltd [2001] BLR 407

d. Construction of two boiler plants on a site adjacent to an oil refinery

No. Section 105(2) of the Construction Act 1996 lists particular exclusions from construction operations. Mitsui Babcock Energy Services Ltd v Foster Wheeler Energia OY 2001 S.L.T. 1158 set out that the construction of two boiler plants on a site adjacent to an oil refinery was not a construction operation as the installation of the boilers was intended to further the primary activity of processing the oil and not the primary activity itself.

e. Installation of wiring for standby generators to a site where printing works were to be erected.

Yes. In contrast, the court held in ABB Zantingh Ltd v Zedal Building Services Ltd [2000] EWHC Technology 40 that installing the wiring for standby generators to a site where printing works were to be erected was a construction operation as the primary activity was printing, not power generation.

8. Does an adjudicator have jurisdiction where it is not possible to identify all the terms of the contract? (1 mark)

Yes. An adjudicator does have jurisdiction even if it cannot identify all the terms of the contract. Take a look at our article here which considers: Rob Purton t/a Richwood Interiors v Kilker Projects Limited [2015] EWHC 2624 (TCC)

9. Under the Construction Act, (for contracts entered into after 1 October 2011) if I want to withhold money, I must issue a _____________ notice? (1 mark)

• a. Withholding
• b. Pay Less

Pay Less Notice. See section 111 of the Construction Act 1996 as amended by part 8 of the Local Democracy, Economic Development and Construction Act 2009.

10. If an Application for Payment does not state on the face of it that it was intended to be an Application for Payment, is it still valid? (1 mark)

No. Caledonian Modular Ltd v Mar City Developments Ltd [2015] EWHC 1855 (TCC) makes clear that a Contractor should clearly state its intention to the other side if it wishes to make an application for payment.