Cases - Northern Developments (Cumbria) Ltd v J & J Nichol

Record details

Name

Northern Developments (Cumbria) Ltd v J & J Nichol

Date

(2000); [2000]

Citation

TCC 24 January 2000; BLR 158

Legislation

• Housing Grants, Construction and Regeneration Act 1996
• Scheme for Construction Contracts (England and Wales) Regulations 1998

Keywords

Construction contracts - adjudication - adjudicator's jurisdiction - set off - withholding notice - adjudication costs - whether the adjudicator had jurisdiction to consider a claim for set off in the absence of a valid withholding notice - whether the adjudicator had jurisdiction to award costs - Housing Grants, Construction and Regeneration Act 1996, s. 111

Summary

This application followed an adjudication in which the adjudicator decided that J&JN were entitled to payment of approximately £250,000.

Northern Developments brought this application for a declaration that the adjudicator lacked jurisdiction to make some of the decisions that he had made. One issue raised by Northern Developments was that the adjudicator had failed to consider 'its claims for set off arising out of J&JN's repudiation of the contract'. The judge concluded that the adjudicator had no jurisdiction to consider the 'the claims for set off because such claims had not been the subject of a valid withholding notice'.

Another issue raised by Northern Developments was that the adjudicator was wrong to have ordered Northern Developments to pay J&JN's costs and the costs of the adjudication. The adjudication was governed by Scheme for Construction Contracts (England and Wales) Regulations 1998 and the adjudicator had relied on the decision in John Cothliff.

The judge concluded that although the Housing Grants, Construction and Regeneration Act 1996 did not confer jurisdiction on an adjudication to award costs, the parties could confer such jurisdiction on him by consent.

The Court held that the intention of the statute was that if there is to be a dispute about the amount of the payment required by s. 111, that dispute is to be mentioned in a notice of intention to withhold payment not later than five days after the due date for payment. It was considered that, for the temporary striking of balances which were contemplated by the Act, there 'was to be no dispute about any matter not raised in a notice of intention to withhold payment'.

This case is considered to be the high water mark of those cases dealing with the requirement to issue a withholding notice. There are now, clearly, a number of exceptions to the general statement set out by the Court in this case.