Redwing was employed by Wishart to complete a refurbishment of a domestic property relating to four floors of a mews house. The contract was a standard JCT Prime Cost Building Contract form (2006 Revision 1 with amendments). The contract provided that Redwing would be paid the Prime Cost, the Contract Fee and any direct loss and/or expense ascertained pursuant to the contract (all defined terms). Redwing did not complete the Works by the original Date for Completion and submitted an application for extension of time after Practical Completion was achieved.

 

Redwing issued the first Notice of Adjudication seeking an extension of time and payment for Redwing’s Contract Fee and/or loss and expense (the “First Adjudication”). During the course of the First Adjudication the adjudicator sent a note to the parties in relation to the contract conditions concerning the Fixed Fee. In this note, the adjudicator stated that, on his reading of the Contract, any difference between the estimated Prime Cost and the actual Prime Cost would generate a pro-rata adjustment to the Fixed Fee. He asked the parties if this was correct. Wishart’s solicitors replied that Redwing had not advanced an argument that they were entitled to adjustment of the Fixed Fee and therefore the adjudicator did not have jurisdiction in relation to this issue. Redwing did not respond. 

 

The adjudicator issued his Decision awarding Redwing an extension of time and some associated monies, both not for the full amount sought by Redwing.

 

At paragraph 5.2 of the Decision, the Adjudicator addressed the question as to how the Contract Fee should be calculated. Following receipt of the Decision, Redwing noted that the decision precluded any adjustment of the Contract Fee but this was not a matter referred to the Adjudicator. Rather, the matter referred was for the payment of the Contract Fee for the period of the extension of time and not for the adjustment of the Contract Fee which was a separate matter. 

 

Redwing then commenced a second adjudication in relation to the Final Account (the “Second Adjudication”). One of the issues was whether the Contract Fee could be adjusted. Mr Wishart’s solicitors made a number of jurisdictional complaints and stated that the First Adjudicator should be treated as having dealt with and decided the issues in relation to the Contract Fee. Redwing disagreed. 

 

After the decision in the Second Adjudication was made, Redwing’s solicitors emailed the adjudicator advising of an “arithmetical error” in the decision’s appendix. Wishart’s solicitors disagreed that it was a figure that could be corrected under the slip rule. The adjudicator corrected his error and revised his decision. 

 

At enforcement, there were two issues:

(a) One needs to determine what the dispute referred in the first or earlier arbitration was. That dispute may be wide or narrow.

(b) One also needs to determine whether and to what extent the parties gave the adjudicator in that adjudication jurisdiction to address matters which were not obviously within the ambit of the referred dispute. This could cover a defence which had not been raised before the referral but can legitimately be raised as a defence to the referred claim. The adjudicator will need to rule on that.

(c) One must then examine what the adjudicator has decided, first in relation to the referred dispute and any arguable defence put up and secondly if he has purported to decide something which has not been referred or which has not become within his or her jurisdiction.

(d) Any decision which can be described as deciding the dispute, as referred or as expanded effectively within the adjudication process, is binding and cannot be raised or adjudicated upon again in any later adjudication.

(e) In contrast, any decision or part of a decision which can be described as not deciding the dispute, as referred or as expanded effectively within the adjudication process, is not binding and can be raised or adjudicated upon again in any later adjudication.

Thus, where an adjudicator who, in court terms, offers an obiter opinion on a point or topic which is not part of the dispute for which he does have jurisdiction, that opinion is not jurisdictionally part of his decision.

 

In this case, the dispute in the First Adjudication did not involve a claim for an adjustment of the Contract Fee’s weekly “rate” and the parties did not give the First Adjudicator jurisdiction to rule upon any issue regarding the adjustment of the Contract Fee rate. The First Adjudicator’s reasoning in relation to the implied term was a wholly unnecessary part of the decision and was not reasoning that underpinned or supported his findings about the weekly rate or the period which it related to. That is, this paragraph of the adjudicator’s decision was obiter to what the adjudicator was required to and in fact did decide on the dispute actually referred to him. Therefore the Second Adjudicator had jurisdiction to rule upon the issue as to whether Redwing was entitled to an adjustment of the Contract Fee rate.

 

In relation to the slip rule, the Judge cited and approved the principles set out in YCMS Ltd v Grabiner. In this case, the essential reasoning of the Second Adjudicator’s decision both before and after revision of the decision remained the same. This reasoning was not disputed by the parties and the Second Adjudicator was correcting a very obvious arithmetical error within a reasonable time (the correction was made 2 days after the decision). Therefore the Second Adjudicator was applying the Slip Rule and there was an implied term that the Second Adjudicator within a reasonable time could revise his decision for patent errors.