107772.001 SH Construction Case Booklet

1. Introduction The Enforcement of Adjudicators’ Awards under the Housing Grants, Construction and Regeneration Act 1996: Part 3 of 2019. Kenneth T. Salmon, Consultant Solicitor and Katy Ormston, Trainee Solicitor at Slater Heelis LLP. The law is stated at 31 March 2019. 2. Decision – Correction of Errors Axis M&E UK Ltd and Axis Plumbing NSW PTY Ltd v Multiplex Construction Europe Ltd 6 Claimant Axis applied to enforce a corrected decision of the adjudicator in its favour. The Defendant Multiplex contended the adjudicator had no jurisdiction to correct an error his decision as it did not amount to a correction “ to remove a clerical or typographical error arising by accident or omission ” under paragraph 22A (1) of the Scheme. The admitted error arose out of the adjudicator’s treatment of the Defendant’s entitlement to a deduction of contra charges from sums otherwise due to the Claimant. The decision entailed the adjudicator in doing two things: considering and determining the value of variations (which he did at more than the defendant’s valuation) and the value of contra charges (which he did at less than the Defendant’s valuation). In his calculation the adjudicator erroneously deducted the sum he had determined as the total value of the contra charges (£246,886) from the sum certified to the Claimant by the Defendant which already included a deduction for contra charges of £783,924. Thus the amount he now determined as being the correct amount of contra charges was in error. This resulted in his original decision on 18 October 2018 in the claim having “failed” and the Claimant being entitled to nothing. On 22 October 2018 (the day his decision was due) the adjudicator issued a corrected decision removing the error which resulted in a sum due to the Claimant of £643,072. In light of this, he also made consequential changes to his decision ordering the Defendants to pay £11,000 odd for interest and to pay his fees. The adjudicator acknowledged that he could not decide whether he had jurisdiction to do what he proposed to do, and that it would be for “ the parties or others to decide which decision shall apply ”. That was now the question before the Court. The Court considered a number of previous authorities decided before the Act and Scheme were amended to include the present express power to correct errors 7 and cases decided since the Scheme was amended. 8

The Court also looked at the decision of Ramsey J on the jurisdictional aspects of the implied power to correct an earlier decision 9 in which it was held that the Court could not interfere with the exercise of the adjudicator’s power within his jurisdiction and that included the adjudicator’s application of the slip rule. The Court concluded: 1. On one view, it was an answer to the application that if the adjudicator was wrong in deciding the error was one which he could correct under the Scheme slip rule, that was an error of law of the type which an adjudicator could make without rendering the decision unenforceable. The Court was asked to go further and was prepared to do so. 2. The starting position was that decisions were to be enforced save in very exceptional cases. In interpreting the decision one should consider the context of the dispute referred. 3. The principle elements of the dispute were as recited above: consider and determine value of variations and consider and determine the value of contra charges. What if anything was then due “should follow as a matter of arithmetic mechanics.” 4. That the adjudicator so understood his task was apparent from the structure of his decision which dealt only with those two topics in detail. 5. Once the contra charges were decided, the arithmetic had to be carried out to give effect to that part of the decision. 6. The error in incorrectly over-deducting for contra charges was the sort of error falling that fell within the slip rule as construed by Lady Wolffe in NKT (see footnote) namely “an arithmetical error in adding or subtracting sums [or]… a slip in carrying over a calculation from one part of the decision to another.” In the judgment of the Court there was no relevant distinction between the circumstances in which consequential corrections could be made to an arbitral award 10 and an adjudicator’s decision. Moreover once one element had been corrected any other changes consequential upon that correction should be made so the decision was not internally inconsistent. Accordingly the adjudicator acted within his jurisdiction in awarding interest.


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