Cases - J W Hughes Building Contractors Ltd v GB Metalwork Ltd
Record details
- Name
- J W Hughes Building Contractors Ltd v GB Metalwork Ltd
- Date
- (2003)
- Citation
- EWHC 2421 (TCC)
- Legislation
- Keywords
- Adjudication - construction contract - enforcement of adjudicator's decision - referral to adjudication - whether dispute at time of referral - natural justice - insolvency - inability to pay
- Summary
-
This matter arose out of a subcontract for the fabrication and erection of steelwork. GB Metalwork made this application for summary judgment of an adjudicator's decision by way of a counterclaim to court proceedings commenced by J. W. Hughes.
J. W. Hughes resisted the application for summary judgment on 3 grounds:
- They argued that there was no dispute at the time of the purported referral to adjudication.
- They argued that the adjudicator infringed the rules of natural justice, in particular because they had not been provided with a certain critical document and the adjudicator had failed to take steps to enable J. W. Hughes to deal with that documentation fully and properly in presenting its own case.
- It was argued that GB Metalwork were on the brink of insolvency and would not be able to pay the money back in subsequent proceedings.
With regard to point (1), the judge concluded that it was clear that there were outstanding matters relating to GB Metalwork's subcontract claims that were additional to the contract sum and were matters in respect of which it was hoped that J. W. Hughes would then be able to pass the financial responsibility up the line to the employer. The judge concluded that this matter had already been considered by the adjudicator; that there was an ad hoc agreement by the parties to the adjudicator having jurisdiction to deal with jurisdiction; and that therefore there was no need for the judge to elaborate further.
With regard to point (2), J. W. Hughes had changed their solicitors part-way through the adjudication and did not have copies of the documentation accompanying the referral, which had been mislaid by the original solicitors.
The importance of this omission did not fully come to light until both parties attended a meeting with the adjudicator. The missing documentation had been highlighted to the adjudicator at an earlier stage; the adjudicator had invited J. W. Hughes to raise the matter further with him some six days prior to the meeting. However no further representations were made.
The adjudicator had satisfied himself that GB Metalwork had done what they were required to do by way of serving documentation on J. W. Hughes's then solicitors. He had invited J. W Hughes to raise the matter further with him some six days in advance of the meeting if it was felt that it was necessary to do so. J. W. Hughes did not do so. The adjudicator had got on with the process as the legislation required him to do - that is to say, he dealt with it promptly and fairly and arrived at his decision within the normal tight timescale. Therefore the judge dismissed J. W. Hughes's contentions in relation to their second point.
With regard to point (3), the judge was faced, on the one hand, with company accounts lodged at Companies House and credit ratings given by an independent credit trading organisation, and on the other hand by letters from GB Metalwork's accountants and bank stating that the financial position of the company was expected to improve and that it was anticipated that the overdraft facility would be extended.
The judge therefore formed the view that this was not a case in which it can be said that there was a high risk of a present inability to pay the money in the event that GB Metalwork were ordered, as the result of the resolution of underlying dispute, to return any or all of the money that the adjudicator's decision had made available to them as a result of the adjudication process.