Key Issue of Dispute Scope and Adjudicator Jurisdiction Addressed in Bellway Homes v Surgo Construction Case

Introduction

This article examines the judgment in the case of Bellway Homes Limited v Surgo Construction Limited [2024] EWHC 10 (TCC), decided in the Technology and Construction Court (TCC). The case involved an adjudication enforcement dispute and raised important issues relating to the scope of an adjudicator’s jurisdiction, and what constitutes a single dispute for the purposes of adjudication. The key legal principles pertain to the interpretation of what is considered a “dispute” and whether an adjudicator may exceed their jurisdiction by determining issues that were not originally referred for adjudication.

Key Facts

In this case, Bellway Homes Limited (the Claimant) sought to enforce an adjudication decision regarding an assigned claim originally between Roundel Manufacturing and Surgo Construction Limited (the Defendant). The adjudicator, Mr Timothy G. Bunker, had determined that the Defendant was indebted to the Claimant in a specified sum. The Defendant raised jurisdictional challenges, contending firstly that multiple disputes were referred without consent and secondly that the Adjudicator exceeded his jurisdiction.

The adjudication concerned the Defendant’s alleged failure to pay for 14 kitchens installed beyond the original contract amount. The Contract allowed for alternative modes of establishing the sums due: a “smash & grab” approach based on the absence of payment or pay less notices, or a “true value” adjudication to ascertain the substantive value of work done. Upon adjudication, the Adjudicator initially determined that the “smash & grab” claim failed but went on to decide the true value, leading to the award in favor of the Claimant.

Legal Principles

Single Dispute Principle

The first principle addressed relates to whether multiple disputes were illegitimately combined in a single adjudication. The court applied guidance established in previous cases like Witney v Beam Construction [2011] EWHC 2332 and Fastrack v Morrison Construction [2000] BLR 168. These cases underlined that care must be taken in characterizing a dispute and that more than one dispute cannot be referred unless the parties consent.

In this case, the court found that there was only one overarching dispute concerning what sums were due arising from a payment application dated 22nd December 2022. The different routes of smash & grab or true value presented by the Claimant were alternative arguments within the same dispute.

Jurisdiction of Adjudicators

The second principle considered was whether adjudicators can exceed their jurisdiction. The case law addresses the extent of the adjudicator’s jurisdiction stemming from the terms of the notice of adjudication, as established in cases such as Pentan v Spartafield [2016] EWHC 317 (TCC) and McAlpine v Transco [2004] BLR 352 QBD (TCC). It was considered that the adjudicator must decide only the issues referred to, barring agreement between the parties to expand the scope.

With regard to the phrase “or such other amounts,” the court distinguished this case from Stellite v Vascroft [2016] BLR 402 QBD (TCC), where the extension of jurisdiction through such a phrase was not permitted. In the present case, the use of “an amount due up to end December 2022, calculated on a substantive basis, in such sum as the Adjudicator shall decide” was found to be a stipulation to the “true value” adjudication itself and not a jurisdictional overreach.

Outcomes

The court rejected the Defendant’s arguments regarding jurisdictional challenges. It was concluded that the single overarching dispute was properly within the jurisdiction of the Adjudicator to determine its true value after dismissing the smash & grab claim. This led the court to grant summary judgment for the Claimant in the sum claimed from the adjudication decision.

Conclusion

The TCC has reaffirmed that careful characterization of a dispute is crucial in the context of adjudication referral. The singularity of a dispute may encompass several related claims if they are not independent of one another. Furthermore, the case underscores that the scope of an adjudicator’s jurisdiction is defined by the notice of adjudication and subsequent referral, ensuring that adjudicators have the authority to determine matters within the bounds of the dispute referred. The judgment sets precedents for understanding the extent of what constitutes a dispute and clarifies the jurisdictional limits within an adjudication.