Morrison were the main contractors for the construction of a new leisure complex in Coventry. Fastrack was the brickwork subcontractor. Delays occurred to the works and a dispute developed. As a result Morrison engaged third parties to progress some of Fastrack’s work. Fastrack considered that Morrison’s employment of others was a repudiation of the subcontract, and so accepted the repudiation and left site. Notice of Determination was then served by Morrison on Fastrack. After leaving site, Fastrack submitted Application no. 13 for the gross sum of £383,873.97. Morrison then served a notice of set-off in respect of cost to complete in the sum of £226,177.00, which succeeded the net sum claimed by Fastrack in Application No.13. The dispute was referred to adjudication and the Adjudicator awarded Fastrack the sum of £85,401.98.

Morrison refused to pay, and argued that, at the time the Notice of Adjudication was served, the only dispute in existence related to the matters set out in Application No. 13. However, the sums claimed in the adjudication were different to those claimed in the application for payment. Morrison therefore argued that the amounts set out in Application No. 13 had been superseded by a new claim, that was not yet in dispute as Morrison had not had the chance to consider the new claim and respond. They went on to argue that there was therefore no dispute and the Adjudicator was appointed without jurisdiction.

At enforcement, the Judge noted that the Act refers to a “dispute” but not to “disputes”. He therefore considered that a Referring Party could only refer a single dispute, although that dispute may have several or many matters at a particular point in time and it will be a question of fact as to what constitutes the dispute. The Judge disagreed with Fastrack’s agreement that it was possible to refer a number of disputes, and the disputes referred did not need to be identical to the pre-existing dispute, providing that it was substantially the same as the pre-existing dispute. Adopting the rationale in Halki he went on to hold that a dispute within s108 of the Act can only arise when a claim has been notified and rejected. However, it should be noted that a rejection can occur when a party refuses to answer the claimant.

Finally, the Judge stated that Fastrack would have recovered no sum at all if it had limited its Notice of Adjudication to Application 13, but as the Notice of Adjudication was expressed in extremely wide terms and so covered the matters in dispute. The Notice included such matters as: disputes that have arisen, issues as to Fastrack’s right to payment, or such other sums as the Adjudicator shall find payable in respect of breaches of contract, loss of profit etc. The interim payment procedure had come to an end as a result of Fastrack’s acceptance of Morrison’s repudiation, and so had been replaced by an entitlement to damages of sums due as a result of the repudiation. Therefore, there had been a notification and rejection of the claims forming the subject matter of the dispute which had been captured in the Notice of Adjudication.