It is well-known that the Housing Grants, Construction and Regeneration Act 1996 (as amended) (the “HGCRA”) permits a party to a construction contract to refer a (singular) dispute to adjudication. Although case law continues to show that the question of what comprises a single dispute is often not easy to answer.
In Quadro Services Ltd v Creagh Concrete Products Ltd [2021] EWHC 2637 (TCC), the court considered whether multiple unpaid invoices under the same contract could be referred to adjudication as a single dispute. The facts and decision in the case and our commentary is set out below.
Background
Creagh Concrete Products Ltd (“Creagh”) and Quadro Services Ltd (“Quadro”) entered into an oral contract for the provision of labour on construction projects.
Between July and October 2020, Quadro rendered three invoices (the “Invoices”) pursuant to applications for payment relating to a project in Woking. The Invoices totalled £40,026 including VAT. (Creagh had not issued pay less notices against any of the applications.) Creagh did not pay any of the Invoices.
On 30 March 2021, Quadro referred a dispute to adjudication. The dispute related to the non-payment of the Invoices.
Creagh then made a challenge to the adjudicator’s jurisdiction on the basis that Quadro had in fact referred three disputes, being the three applications. Quadro responded to say that the Invoices represented sub-issues of a single dispute, being the debt owed by Creagh. The adjudicator made a non-binding decision that he did have jurisdiction and that the Invoices constituted a single dispute.
On 27 April 2021, the adjudicator issued his decision, awarding Quadro £40,026 plus interest. Creagh did not pay, and Quadro sought to enforce the decision in the Technology and Construction Court.
Decision
In argument, Quadro repeated its position that the Invoices were sub-issues within a larger dispute. Creagh said that, as each application could be decided separately, there were multiple disputes.
The judge, HHJ Sarah Watson, then set out relevant case law. In Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC), the court said (at paragraphs 38(iii) and (vii)) that:
A dispute can comprise a single issue or any number of issues within it.
[…]
Whether there are one or more disputes again involves a consideration of the facts. It may well be that, if there is a clear link between two or more arguably separate claims or assertions, that may well point to there being one dispute. A useful if not invariable rule of thumb is that, if disputed claim No 1 can not be decided without deciding all or parts of disputed claim No 2, that establishes such a clear link and points to there being only one dispute.
In Prater Limited v John Sisk & Son (Holdings) Limited [2021] EWCH 1113 (TCC), the court said (at paragraph 33) that:
[…] I do not read Akenhead J's guidance in the Witney case as meaning that unless each claim cannot be decided without deciding all or part of the other claims, each claim constitutes a separate dispute. Clearly a single dispute in the context of a construction contract may include several distinct issues such as when determining appropriate deductions for the purposes of a payment application or final account. One needs to look at the facts of each case and to use some common sense.
The judge held that, in the present case, there was only a single dispute. Her reasoning was as follows:
[…] the fact that it is technically possible to determine whether each individual invoice is due without determining whether the other invoices are due does not mean that those issues cannot be sub-issues in the wider dispute as to the whether the Claimant is entitled to the sum it claims is due to it under the contract.
Further, the judge said that if Creagh’s position was correct, then:
[…] the parties would be put to the very significant cost and inconvenience of numerous separate adjudications to recover a single claimed balance under a single contract. That would be contrary to the policy underlying the adjudication process of efficient, swift and cost-effective resolution of disputes on an interim basis.
She therefore granted summary judgment in favour of Quadro.
Commentary
The decision in Quadro v Creagh is a practical one and affirms the position that multiple unpaid applications under the same contract can be referred to adjudication as a single dispute. As a general rule, if the issues in dispute can be grouped under a single application or payment, there will be a single dispute. Such a principle reinforces the policy underlying the HGCRA; that is, prompt payment under construction contracts.
Referring parties are advised to analyse their claim in advance and ascertain whether it is in fact a single dispute. If not, does the contract permit multiple disputes? (The Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended) permits multiple disputes to be referred by agreement, although a potential responding party is unlikely to agree to this.)
Similarly, responding parties should carry out the same exercise on receipt of a notice of adjudication. If the claim appears to be for multiple disputes, a full and prompt jurisdictional challenge should be made.
