C&B Scene Concept Design Limited -v- Isobars Limited
Case reference:
[2002] EWCA Civ 46
Thursday, 31 January 2002
Key terms: Jurisdiction - JCT 98 WCD, alternative A or B - Section 111 notices
This is the second Court of Appeal decision relating to adjudication, the first being Bouygues v Dahl Jensen 31 July 2000. The case concerned the jurisdiction of the adjudicator, and appeared to focus on appendix 2 of the JCT WCD. In the absence of the selection of either payment alternative A or B, the judge decided that the payment mechanism fell away and was replaced with the Scheme.
The result was that the decision was not enforced. At the summary judgment application in the TCC, three reasons for non-compliance with the adjudicator's decision had been advanced. First, since the parties had failed to select alternative A or B, the whole of clause 30 fell away, the provisions requiring the employer to give notice also fell away, and the provisions of the Scheme applied. Second, failure to give notice does not preclude the employer from arguing that sums are not "due under the contract". Third, the adjudicator had asked the wrong legal question by failing to appreciate that clause 30 had been superseded by the Scheme. Sir Murray Stuart Smith considered that the real question was whether the error on the part of the adjudicator went to his jurisdiction. He applied the law which has developed in respect of expert determination, citing the test set out by Knox J. in Nikko Hotels (UK) Limited v MEPC plc [1991] 2 EGLR 103;
The result was that the decision was not enforced. At the summary judgment application in the TCC, three reasons for non-compliance with the adjudicator's decision had been advanced. First, since the parties had failed to select alternative A or B, the whole of clause 30 fell away, the provisions requiring the employer to give notice also fell away, and the provisions of the Scheme applied. Second, failure to give notice does not preclude the employer from arguing that sums are not "due under the contract". Third, the adjudicator had asked the wrong legal question by failing to appreciate that clause 30 had been superseded by the Scheme. Sir Murray Stuart Smith considered that the real question was whether the error on the part of the adjudicator went to his jurisdiction. He applied the law which has developed in respect of expert determination, citing the test set out by Knox J. in Nikko Hotels (UK) Limited v MEPC plc [1991] 2 EGLR 103;
"If he answered the right question in the wrong way, his decision will be binding. If he had answered the wrong question, his decision will be a nullity."
Sir Murray Stuart Smith concluded that the adjudicator was asked to decide the amount of the interim application number 6. Within the scope of that referral the adjudicator may have made some errors of law along the way, he had not exceeded his jurisdiction. He has decided the matter put to him and the decision would be enforced. Isobars had, at the TCC, asked for a stay on the basis of C&B's "financial difficulties". The Court of Appeal refused, as Isobars had not turned up for the appeal, and so had not presented any material on which the court could consider awarding a stay.