Watkin Jones & Son Ltd -v- Lidl UK GmbH
Friday, 1 February 2002
Key terms: Part 24 Summary Judgment - stay under section 9 of the Arbitration Act 1996 - JCT WCD 98 edition - jurisdiction - dispute - "dual purpose" application for payment
Watkin Jones & Son Limited was the contractor for the demolition and construction of a retail store in Wales for Lidl UK GMBH. The contract was a JCT Standard Form of Building Contract with Contractor's Design, 1998 Edition together with various amendments. Work commenced around 17th July 2000 and practical completion occurred on 22nd June 2001. The contractor submitted an application for payment no. 11 on 17th July 2001. Lidl made no payment, and the contractor served a Notice of Adjudication. The Adjudicator ordered Lidl to pay Watkin £345,264.99 plus VAT and his fees and expenses of £5,812.34 inclusive of VAT. The Judge referred to the "expert determination" nature of adjudication and considered that the case raised two issues.
First, whether there was a dispute between the parties which the contractor could then refer to adjudication, and second, if there was such a dispute, then whether that was the dispute which the adjudicator had in fact addressed in his decision. The grounds upon which the parties argued the case varied slightly to those issues raised during the adjudication, but basically Lidl argued that there was no dispute. Essentially, there was an argument as to the purpose of application no. 11, with Lidl arguing that application no. 11 was in fact a final account and so a different contractual mechanism, applied to the resolution of that account.
HHJ Moseley QC held that there was a dispute as to the amount to be paid. The Adjudicator had held that application 11 had a dual purpose (in that it was an application for payment, and a draft final account) and the Adjudicator's decision in that respect could not be challenged. In respect of the second issue, the Adjudicator had addressed the application for payment and concluded that the claimant was entitled to be paid. The terms of that particular contract are unusual in that clause 30.3.5 states that where the Employer does not give a written notice pursuant to the contract then "the Employer shall pay the Contractor the amount stated in the Application for Interim Payment". The Adjudicator did not need to consider the state of the account between the parties. The consideration of what sum was "due" and the application of clause 30.3.5 to the facts of this particular case was within the Adjudicator's jurisdiction.
Finally, the counterclaim was stayed under section 9 of the Arbitration Act. The Judge considered that the counterclaim was based on rectification of the contract, and that was a matter for arbitration. The Judge therefore gave summary judgment for the claimant and stayed the counterclaim.
First, whether there was a dispute between the parties which the contractor could then refer to adjudication, and second, if there was such a dispute, then whether that was the dispute which the adjudicator had in fact addressed in his decision. The grounds upon which the parties argued the case varied slightly to those issues raised during the adjudication, but basically Lidl argued that there was no dispute. Essentially, there was an argument as to the purpose of application no. 11, with Lidl arguing that application no. 11 was in fact a final account and so a different contractual mechanism, applied to the resolution of that account.
HHJ Moseley QC held that there was a dispute as to the amount to be paid. The Adjudicator had held that application 11 had a dual purpose (in that it was an application for payment, and a draft final account) and the Adjudicator's decision in that respect could not be challenged. In respect of the second issue, the Adjudicator had addressed the application for payment and concluded that the claimant was entitled to be paid. The terms of that particular contract are unusual in that clause 30.3.5 states that where the Employer does not give a written notice pursuant to the contract then "the Employer shall pay the Contractor the amount stated in the Application for Interim Payment". The Adjudicator did not need to consider the state of the account between the parties. The consideration of what sum was "due" and the application of clause 30.3.5 to the facts of this particular case was within the Adjudicator's jurisdiction.
Finally, the counterclaim was stayed under section 9 of the Arbitration Act. The Judge considered that the counterclaim was based on rectification of the contract, and that was a matter for arbitration. The Judge therefore gave summary judgment for the claimant and stayed the counterclaim.