1) Limitation – applicability to adjudication: LJR Interiors Ltd v Cooper Construction Ltd [2023] EWHC 3339 (TCC) HHJ Russen KC This was a part 7[6] application by Coopers to enforce an adjudicator’s decision and was heard together with an application under part 8 for a final declaration that the claim was statute barred and therefore the decision was invalid and should not be enforced. The facts of the case were not only highly unusual but complex, so much so that the court took the opportunity to remind practitioners of what had been said by Coulson J in Hutton v Wilson [7] , and was made clear in paragraph 9.4.3 of the TCC Guide, namely the need for appropriate listing arrangements and proper time estimates for Part 8 proceedings for final declaratory relief. The parties had entered into a simple contract for construction works in 2014 and LJR had made three payment applications, the third of which was in effect the final payment application. The contract did not contain an adequate mechanism for determining what payments became due and when and thus the payment provisions of the contract were supplemented by Scheme payment provisions. In 2022, LJR submitted a fourth payment application largely duplicating its previous third application and seeking release of retention, certain administration charges and interest. Coopers did not serve a pay less notice and LJR submitted the dispute to adjudication, in which Cooper submitted that the claim was misconceived if not fraudulent and was in any case statute barred.
The adjudicator decided that:
payment application number 4 was a valid payment application; it was not fraudulent but genuine; there was no time limit under the Scheme for submitting a dispute to adjudication; the limitation Act 1980 s5 barred the remedy not the right to make the claim; the right to payment which gave rise to the claim only arose when the payment application was made in August 2022.
Accordingly he found in favour of LJR.
The court was ultimately asked by Cooper to impugn the decision on its merits. To that end there were two essential questions:
i) Was the Decision wrong in concluding that payment application No. 4 was not statute barred?
ii) If so, was the adjudicator's error one which it would (adopting the Hutton v Wilson test) be unconscionable for the court to ignore on the Part 7 adjudication enforcement claim?
The court first addressed limitation in adjudication proceedings.
S5 of the Limitation Act 1980 provides: "An action founded on simple contract shall not be brought after the expiration of 6 years from the date on which the cause of action accrued." The court concluded, obiter, and with reservations, from a consideration of the Limitation Act 1980, the Scheme and case law[8], that the right to adjudicate must be subject to statutory limitation. Otherwise the raising of a payment application after the expiry of the usual contractual limitation period would provide an extended limitation period which could not have been the intention of the Act or Scheme.
[6] Civil Procedure Rules [7] Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC)
[8] Anglian Water Services Ltd v Laing O'Rourke Utilities Ltd [2010] EWHC 1529 (TCC); Connex South Eastern Limited v M J Building Services Group Plc [2005] EWCA Civ 193; Aspect Contracts (Asbestos) Limited v Higgins Construction Plc [2015] UKSC 38.
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