Project Consultancy Group v Trustees of the Gray Trust 2

Where there is a triable issue as to whether the adjudicator had power to make a decision, the court will not give summary judgment. A jurisdictional challenge should be raised at the outset, but a defendant may still take part in the process provided it is clear that this is without prejudice to this challenge.

Dyson J, Technology & Construction Court

16 July 1999

P's claim for fees arose out of works performed for T for conversion of a property into a nursing home. It was not in dispute that if there was a contract, it was a construction contract within the meaning of Section 104 of HGCRA.

T argued that if there was a contract, it was concluded prior to 1 May 1998 and therefore no right to adjudicate could be implied. Alternatively, T argued that no contract was ever concluded. However, T continued to participate in the adjudication. The adjudicator found that a contract was concluded on 10 July 1998 and awarded P almost £65,000. T did not pay, so P applied for summary judgment.

P relied on the Macob decision holding that a decision whose validity was challenged was still a decision within the Act. The court held that different considerations applied where the adjudicator purports to make a decision which he is not empowered by the Act to make. The court rejected an argument that this type of challenge, if considered by the courts, would frustrate the intention of Parliament.

The court noted that T stated in the clearest terms that it protested the adjudicator's jurisdiction and would not comply with any decision, but that it reserved its right to participate without prejudice to that contention. The actual wording quoted by the court was: "The Act cannot apply and your Notice of Reference to Adjudication is invalid. We suggest that in the circumstances adjudication is inappropriate and enquire whether you intend to withdraw the Reference. If however your client proceeds with adjudication, our client shall dispute the Adjudicator's jurisdiction. If the Adjudicator makes a decision notwithstanding the objection to jurisdiction, our clients will not comply with any award made on the basis that it was made without jurisdiction. These issues will be placed before the Court should your client issue any application for enforcement of the Adjudicator's award. Without prejudice to the above, if you proceed with the adjudication, we reserve our clients' rights generally, and in particular to appear and present their case to the Adjudicator." The court held that this approach did not prevent T challenging the adjudicator's decision through the court now.

The court examined whether or not a contract had been concluded (and if so when), and found that this was by no means straightforward. It was at least arguable that no contract was ever concluded, and it was not possible to resolve the issue by summary process without full evidence and argument. Therefore, the application for summary judgment failed.

Where there is a triable issue as to whether the adjudicator had power to make a decision, the court will not give summary judgment. A jurisdictional challenge should be raised at the outset, but a defendant may still take part in the process provided it is clear that this is without prejudice to this challenge.