UK Adjudicators July 2018 newsletter

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JULY 2018 NEWSLETTER
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EDITORS’ COMMENTS
At this time of year, most people’s thoughts
turn to summer holidays and other such
seasonal enjoyments. During a time of annual
national distraction, with many choosing to go
away on holiday, there is the potential for a
‘summer ambush’ in the adjudication sector.
There can only be an ambush if there is an
established, crystallised dispute. The
judgment given by Lord Justice Jackson in the
case of Amec Civil Engineering Ltd v The
Secretary of State for Transport [2004] EWHC
2339 (TCC) provides sound explanation on this
point.
If the dispute has not crystallised, there is
nothing capable of being referred. The
adjudicator will subsequently lack jurisdiction
to proceed.
If a dispute has crystallised, then plans should
be put in place to manage the adjudication in
an individual’s absence. Whilst adjudicators
could potentially work from a hotel or from
the beach, it would take a very brave
responding party to run adjudication from
their holiday destination.
Sean Gibbs LLB (Hons) MICE FCIOB FRICS
FCIARB is a director with Qualsurv
International and is available to serve as an
arbitrator, adjudicator, mediator, quantum
expert and dispute board member.
sean.gibbs@qualsurv.co.uk
Kirsty Potts (MA Cantab) is an Associate
Lecturer in Law at the University of the West
of England, Bristol and author of GDL guides
to contract and land law.
kirsty.mills@cantab.net
CONSTRUCTION (RETENTION
DEPOSIT SCHEMES) BILL 2017-19
The second reading debate of the
Construction (Retention Deposit Schemes)
Bill, introduced by Mr Peter Aldous MP, has
been postponed again. It has been postponed
from 15 June and is now expected to take
place on Friday 26 October 2018.
The Bill can be accessed via the following link:
https://publications.parliament.uk/pa/bills/cb
ill/2017-2019/0148/18148.pdf

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IS AN EMPLOYER ENTITLED TO
RAISE SET-OFFS NOT PREVIOUSLY
RAISED IN A PAY LESS NOTICE?
The answer to this question depends on
whether the applicable law is Scottish or
English, following a recent TCC case.
The case of M I Electrical Solutions Limited v
Elements (Europe) Limited [2018] EWHC 1472
(TCC) confirmed that the court will uphold an
adjudicator’s decision which declined to look
at a response of set-off that was not raised in
the Pay Less notice.
The court stated that: “The time at which to
raise defective works in defence of a cross-
claim to a claim for payment is in the Pay Less
notice.”
When dealing with the subsidiary point as to
the applicability of a set-off provision in the
sub-contract, the court considered that: “the
requirement, in that context, as I have
construed it, is that the Pay Less notice should
have been served identifying the set-off relied
upon”.
This is in contrast with the Scottish case of DC
Community Partnerships v Renfrewshire
Council [2017] CSOH 143 where a dispute
arose over the sum the Council was to pay as
an interim payment. An amount significantly
less than the amount applied for was certified
and the Council paid the certified sum. The
Council failed to issue a Pay Less notice.
In response the Contractor referred the
dispute over the payment certificate to
adjudication, seeking an increased amount.
The Council claimed an entitlement to set-off
liquidated damages against any further sums
the adjudicator may find due in the
adjudication.
The adjudicator did find additional sums to be
due to the Contractor, but did not specifically
refer to the Council's set-off argument in his
decision.
When the Contractor sought enforcement,
the court refused to enforce the adjudicator's
decision. Instead, the court found that the
adjudicator had failed to consider the
Council's entitlement to deduct liquidated
damages.
The court considered that the “notified sum”
in section 111 could not sensibly be construed
as including any additional sums that an
adjudicator may later decide are due. The
Council had paid the “notified sum” and there
was nothing preventing it from raising new
defences in response to the contractor’s claim
for an increased payment.
We wait to see further cases on this subject to
find out if there is a difference in English and

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Scottish law, or whether a more senior court
will hand down a binding decision that unifies
this point.
In the meantime, advisers are likely to
encourage their clients to include all relevant
set-offs and counterclaims in any payment or
Pay Less notices. This avoids the risk of the
court rejecting later arguments as to any right
of set-off at enforcement.
Thomas Johnson is a director in the global
construction claims and expert witness
consultancy Hanscomb Intercontinental.
SINGAPORE COURT OF APPEAL
PROVIDES GUIDANCE ON DUTY OF
ADJUDICATORS TO CONSIDER
ISSUES RAISED BY PARTIES
The Singapore Court of Appeal, in the recent
appeal of Bintai Kindenko Pte Ltd v Samsung
C&T Corporation (2018) SGCA 39, upheld the
decision of the High Court which found in
favour of Samsung C&T Corporation
(“Samsung”). The High Court set aside an
adjudication determination made under the
Building and Construction Industry Security of
Payment Act (“SOPA”), on the basis that an
adjudicator had not considered certain issues
in reaching his determination.
Samsung applied to set aside the adjudication
determination due to breaches of natural
justice. It argued that the adjudicator did not,
in his adjudication determination, consider
issues regarding backcharges and variation
works that had been raised by Samsung.
Samsung submitted that:
(i) the adjudicator had failed to
consider the backcharges and
variation works; and
(ii) the adjudicator had failed to give
any reasons on these issues in the
adjudication determination.
The Court of Appeal held that an adjudicator
acts in breach of natural justice in failing to
consider an issue in the dispute before him if
the issue was essential to the resolution of
the dispute. The inescapable conclusion to be
drawn from the Court’s decision is that the
adjudicator did not apply his mind at all to the
relevant issue.
It was noted by the Court that not a single
paragraph in the adjudication determination
related to the issues of the backcharges and
variation works.
The Court also found that it was not possible
to infer that the adjudicator had implicitly
considered these issues. If anything, in the
Court’s evaluation, the adjudicator had in fact
shut his mind to the issues of backcharges and
variation works. Reliance was placed by the

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Court on the adjudicator’s statement in the
adjudication determination that “the payment
claim dispute is centered solely on the release
of the first retention monies, and not the
variations or backcharges”.
This case provides a reminder to adjudicators
of the importance of their duty to duly
consider the issues raised by disputing parties.
POWERPARK SYSTEMS PTY LTD
[2018] NSWSC 793
The New South Wales case of Powerpark
Systems Pty Ltd [2018] NSWSC 793 considered
the nature of an adjudication certificate and a
statutory demand based upon that certificate.
The facts of this case were that Powerpark Pty
Ltd (“Powerpark”) contracted with Shoemark
Electrical Pty Ltd (“Shoemark”) to install solar
panels at various sites.
Powerpark responded to Shoemark’s claim for
payment by issuing a payment schedule which
listed Shoemark’s defective work at various
sites. Powerpark agreed to pay Shoemark the
sum of $24,956.97, but threatened Shoemark
with rectification costs if the defective work
was not resolved.
Shoemark proceeded to have the claim
adjudicated, which was determined in its
favour for $44,811.11. Relying on the
adjudication certificate, Shoemark served a
statutory demand on Powerpark under the
Corporations Act 2001.
Subsequently, and pursuant to the SOPA,
Shoemark obtained judgment against
Powerpark from the Local Court for
$48,230.74. This was the amount determined
under adjudication, plus fees and interest.
Powerpark applied to the Supreme Court to
have the statutory demand set aside. It
argued that there was a genuine dispute
about the existence or amount of the debt
which was due to the purported jurisdictional
error affecting the adjudication certificate and
judgment.
Powerpark convinced the Court of its off-
setting claim, resulting in the amount of the
statutory demand being reduced to
$21,483.14. This figure took into account the
defective works.
A judgment which arises from the filing of an
adjudication certificate determines that the
judgment debt is indisputably due and
payable. The legislative policy supporting the
SOPA is to facilitate payment of an
adjudicated amount. This is notwithstanding
the potential of a ‘curial dispute’ which, if

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later established could be cured by
restitution.
An off-setting claim (in respect of a statutory
demand) may be ordered by a Court without
disturbing the validity of an adjudication
certificate or the statutory demand.
Once a judgment debt forms the subject of an
adjudication certificate and a statutory
demand, a respondent will face difficulties in
challenging its validity. As Powerpark
illustrates, parties may have to persuade the
Court of an off-setting claim instead.
CAN A COMPANY IN LIQUIDATION
REFER A DISPUTE TO
ADJUDICATION ?
The recent decision in the case of Michael J
Lonsdale (Electrical) Ltd v Bresco Electrical
Services Ltd [2018] EWHC 2043 (TCC) (31 July
2018) confirms that a company in liquidation
cannot refer a dispute to adjudication when
that dispute includes (whether in whole or in
part) determination of any claim for further
sums said to be due to the referring party
from the responding party.
The reason for this is that the Insolvency Rules
2016 apply and not the Housing Grants
Construction and Regeneration Act 1996
(“The Act”) or the Scheme for Construction
Contracts 1998 (“The Scheme”).
The relevant phrases are: "a dispute arising
under the contract" in The Act; or "any
dispute under the contract" in The Scheme.
Both include the important words "under the
contract".
Upon the appointment of the liquidator, any
number of disputes between the parties to a
construction contract becomes a single
dispute, namely one relating to the account
under the Insolvency Rules. It becomes a
claim for the net balance under Rule 14.25(2)
of the 2016 Rules. Before those Rules came
into force in 2017, it would have been a
"claim….. for the net balance under Rule 4.90"
of the 1986 Rules.
A dispute in relation to the taking of the
account, as per the Insolvency Rules, is not "a
dispute arising under the contract" to use the
wording in The Act, or "any dispute under the
contract" to use the wording of The Scheme.
It is a dispute arising in the liquidation.
Parliament, in enacting both The 1996 Act and
its successors, has not given adjudicators the
power to resolve disputes in the taking of the
account required by the Insolvency Rules. This

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was true under the 1986 Insolvency Rules and
remains the situation under the 2016 Rules.
Read further on this case:
http://www.bailii.org/ew/cases/EWHC/TCC/2
018/2043.html
WHAT IS THE LATEST POSITION ON
CONCURRENT DELAY IN ENGLAND?
The Court of Appeal ruled on the appeal by
North Midland in the case of North Midland
Building Ltd v Cyden Homes Ltd [2018] EWCA
Civ 1744 (30 July 2018).
In giving judgment, the court stated at
paragraph 16:
Although in one sense of tangential relevance
to this appeal, it is also necessary to say
something about concurrent delay. In Adyard
Abu Dhabi v SD Marine Services [2011] EWHC
848 (Comm), Hamblen J (as he then was) said:
"A useful working definition of concurrent
delay in this context is 'a period of project
overrun which is caused by two or more
effective causes of delay which are of
approximately equal causative potency' – see
the article Concurrent Delay by John Marrin
QC (2002) 18(6) Const. L.J. 436."
The court went on to dismiss the appeal by
North Midland. If there is a clause in a
building contract which provides for delay for
which the contractor was responsible, and
that delay was concurrent with a delay for
which the employer was responsible, such
concurrent delay would not be taken into
account when calculating any extension of
time to the contract completion date.
The court rejected North Midland’s case that
this clause was contrary to 'the prevention
principle' and was therefore ineffective.
For further reading:
http://www.bailii.org/ew/cases/EWCA/Civ/20
18/1744.html
2018 England and Wales High Court
(Technology and Construction
Court) Decisions
January
 Bombardier Transportation
UK Ltd v Merseytravel (No. 3:
Costs) (Rev 1) [2018] EWHC
41 (TCC) (17 January 2018)

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 Connect Plus (M25) Ltd v
Highways England Company
Ltd [2018] EWHC 140 (TCC)
(31 January 2018)
 Contact (Print And Packaging)
Ltd v Travelers Insurance Co
Ltd [2018] EWHC 83 (TCC) (23
January 2018)
 Crown House Technologies
Ltd v Cardiff Commissioning
Ltd & Anor [2018] EWHC 54
(TCC) (18 January 2018)
 Fluor v Shanghai Zhenhua
Heavy Industry Co, Ltd [2018]
EWHC 1 (TCC) (11 January
2018)
 Victory House General
Partner Ltd v RGB P&C Ltd
[2018] EWHC 102 (TCC) (26
January 2018)
February
 Almacantar (Centre Point) Ltd
v Sir Robert McAlpine Ltd
[2018] EWHC 232 (TCC) (21
February 2018)
 BHC Ltd v Galliford Try
Infrastructure Ltd (t/a
Morrison Construction)
[2018] EWHC 368 (TCC) (27
February 2018)
 Dacy Building Services Ltd v
IDM Properties LLP [2018]
EWHC 178 (TCC) (05 February
2018)
 Equitix ESI CHP (Wrexham)
Ltd v Bester Generacion UK
Ltd [2018] EWHC 177 (TCC)
(08 February 2018)
 Grove Developments Ltd v
S&T (UK) Ltd [2018] EWHC
123 (TCC) (27 February 2018)
 Lancashire Care NHS
Foundation Trust & Anor v
Lancashire County Council
[2018] EWHC 200 (TCC) (08
February 2018)

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 Triumph Controls UK Ltd &
Anor v Primus International
Holding Co & Ors [2018]
EWHC 176 (TCC) (07 February
2018)
March
 Fluor v Shanghai Zhenhua
Heavy Industry Co. Ltd [2018]
EWHC 490 (TCC) (16 March
2018)
 Gosvenor London Ltd v Aygun
Aluminium UK Ltd [2018]
EWHC 227 (TCC) (28 March
2018)
 Haberdashers' Aske's
Federation Trust Ltd v
Lakehouse Contracts Ltd &
Ors [2018] EWHC 558 (TCC)
(19 March 2018)
 McDonald & Anor v D&F
Contracts Ltd [2018] EWHC
1600 (TCC) (19 March 2018)
 M Hart Construction Ltd &
Anor v Ideal Response Group
Ltd (Rev 1) [2018] EWHC 314
(TCC) (07 March 2018)
April
 Cleveland Bridge UK Ltd v
Sarens (UK) Ltd [2018] EWHC
751 (TCC) (10 April 2018)
 Cleveland Bridge UK Ltd v
Sarens (UK) Ltd [2018] EWHC
827 (TCC) (18 April 2018)
 Colas Ltd & Ors v Transport
for London [2018] EWHC 831
(TCC) (18 April 2018)
 Redbourn Group Ltd v
Fairgate Developments Ltd

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[2018] EWHC 658 (TCC) (13
April 2018)
 RG Carter Building Ltd v Kier
Business Services Ltd [2018]
EWHC 729 (TCC) (05 April
2018)
 Tetronics (International) Ltd v
HSBC Bank Plc [2018] EWHC
201 (TCC) (12 April 2018)
 Wheeldon Brothers Waste
Ltd v Millenium Insurance
Company Ltd [2018] EWHC
834 (TCC) (19 April 2018)
May
 King Felix Sunday Bebor
Berebon & Ors v The Shell
Petroleum Development
Company of Nigeria Ltd
[2018] EWHC 1377 (TCC) (24
May 2018)
 MLS (Overseas) Ltd v The
Secretary of State for Defence
[2018] EWHC 1303 (TCC) (25
May 2018)
June
 Imperial Chemical Industries
Ltd v Merit Merrell
Technology Ltd [2018] EWHC
1577 (TCC) (21 June 2018)
 Lancashire Care NHS
Foundation Trust & Anor v
Lancashire County Council
[2018] EWHC 1589 (TCC) (22
June 2018)
 Office Depot International
(UK) Ltd v UBS Asset
Management (UK) Ltd & Ors
[2018] EWHC 1494 (TCC) (15
June 2018)
 Tees Esk & Wear Valleys NHS
Foundation Trust v Three
Valleys Healthcare Ltd & Anor
[2018] EWHC 1659 (TCC) (29
June 2018)

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 Triple Point Technology, Inc. v
PTT Public Company Ltd
[2018] EWHC 1398 (TCC) (07
June 2018)
July
 Amey Highways Ltd West
Sussex County Council [2018]
EWHC 1976 (TCC) (30 July
2018)
 BDW Trading Ltd v Integral
Geotechnique (Wales) Ltd
[2018] EWHC 1915 (TCC) (25
July 2018)
 Castle Trustee Ltd & Ors v
Bombay Palace Restaurant
Ltd [2018] EWHC 1602 (TCC)
(06 July 2018)
 Michael J Lonsdale (Electrical)
Ltd v Bresco Electrical
Services Ltd [2018] EWHC
2043 (TCC) (31 July 2018)
 Moore & Anor v National
Westminster Bank [2018]
2018)
 SRCL Ltd v The National
Health Service Commissioning
Board (NHS) [2018] EWHC
1985 (TCC) (27 July 2018)
 Vinci Construction UK Ltd v
Beumer Group UK Ltd [2018]
2018)
ESCL CONFERENCE 2018
The European Society of Construction Law
conference 2018 is due to take place from
Thursday, 25 October 2018 to Saturday, 27
October 2018 in Bucharest.
For more information on the conference:
http://rscl.ro/en/escl-2018/

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SCL INTERNATIONAL CONFERENCE
2018
The Society of Construction Law’s 8th
International Conference is being held at the
Palmer House Hotel Chicago from the 26th-
28th September 2018.
Further information can be found at:
https://www.scl-
na.org/system/files/SCL_Program_Final.pdf
https://www.scl-na.org/conference-
registration
ADJUDICATION SOCIETY ANNUAL
CONFERENCE 2018
The Society's Seventeenth Annual Conference
will be held at the Mercure Bristol Hotel on
Thursday 8th November 2018.
FIDIC CONFERENCES 2018
2018 FIDIC INTERNATIONAL INFRASTRUCTURE
CONFERENCE: 9-11 September 2018; the
Intercontinental Hotel Berlin.
FIDIC LATIN AMERICA CONTRACT USERS'
CONFERENCE: 2 & 3 October 2018
Introduction to 1999 and 2017 FIDIC Suite of
Contracts Workshops: 4 October 2018
Held at the Panama Marriott Hotel, Panama
City, Panama .

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FIDIC AFRICA CONTRACT USERS'
CONFERENCE; 30 & 31 October 2018.
Dispute Resolution and Claims & Defence
Workshops: 29 October 2018.
Introduction to FIDIC Contracts Workshop: 1
November 2018.
Held at the Hyatt Regency Hotel,
Johannesburg, South Africa .
DRBF CONFERENCES 2018
Charlotte, USA: 17-19 October 2017
Geneva, Switzerland: 14-16 November 2018
SCL (SINGAPORE) ANNUAL
CONFERENCE
This year's SCL (Singapore) Annual Conference
is being held at Fort Canning Hotel on the 12th
September 2018.
UK ADJUDICATORS’ DINNER
The UK Adjudicators will be holding a dinner
at Loch Fyne restaurant in Bristol the evening
of the 7th
November 2018, 7.00pm for
7.30pm.
Anyone with an interest in adjudication is
welcome to attend. Further details will follow
in due course.

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9 August 2018
SCL Networking Evening: 5pm
Venue: The Oyster Shed, The Observation
Deck, Angel Lane, London EC4R 3AB.
If you wish to be placed on a waiting list,
please email frances.whitehead@scl.org.uk

UK Adjudicators July 2018 newsletter

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UK Adjudicators July 2018 newsletter