Earlier this year I wrote about what “at any time” means, in the context of a Scottish decision, but do you ever wonder what it actually means?
I think its ordinary meaning is self-explanatory but I put the phrase into Wikipedia to see what would come up. I was surprised that I didn’t get any exact results, so I Googled it, and the first return was an artistic piece, along with items on education, aliens and slaves, but nothing in the first few of the 550 million hits really defined it.
Everyone thinks they know what the phrase means and, in the context of adjudication, they probably do. It comes from section 108(2)(a) of the Construction Act 1996:
“(2) The contract shall –
(a) enable a party to give notice at any time of his intention to refer a dispute to adjudication;” (emphasis added).
Having the right to refer a dispute to adjudication “at any time” is an integral part of adjudication. As much a part of the process has having fish with your chips! Therefore, its no surprise that there have been so few reported cases on what the phrase means.
What about if there are concurrent proceedings?
Sometimes a party may argue that a dispute cannot be referred to adjudication because there are on-going court or arbitration proceedings. The court is generally unimpressed with this argument. In Herschel Engineering Ltd v Breen Property Ltd [2000] BLR 272, Dyson J put it succinctly when he said:
“If Parliament had intended that a party should not be able to refer a dispute to adjudication once litigation or arbitration proceedings had been commenced, I would have expected this to be expressly stated [in the Construction Act 1996].”
Does terminating the contract make a difference?
Equally, arguments about the status of the underlying contract will be met with similar disdain. For example, just because a contract has been terminated does not mean there isn’t a dispute “under the contract” (HHJ Wilcox in A&D Maintenance & Construction Ltd v Pagehurst Construction Services Ltd [1999] CILL 1518).
When should you refer the dispute to adjudication?
As to the timing of the referral to adjudication, in Connex South Eastern Ltd v MJ Building Services Group Plc [2005] EWCA Civ 193, Dyson J (now in the Court of Appeal) followed his earlier approach in Herschel. He said that starting an adjudication 15 months after a repudiatory breach of contract was not an abuse of process:
“…at any time means exactly what it says. It would have been possible to restrict the time within which an adjudication could be commenced, say, to a period by reference to the date when work was completed or the contract terminated. But this was not done.”
What about limitation arguments?
So, the position seemed settled, and then along came the sub-sub-contractor in Jim Ennis Construction Ltd v Premier Asphalt Ltd.
In September 2008, almost 6 years after Premier Asphalt Ltd’s (the sub-sub-contractor) final application for payment (from which Jim Ennis (the sub-contractor) had deducted £39,000), it referred the dispute about the £39,000 to adjudication. (This was more than 6 years after it had carried out work to correct its earlier defective work.)
The sub-contractor paid the money the adjudicator decided should have been paid in January 2003 (with interest) and then sought to recover that money in court proceedings. At that stage, the sub-sub-contractor shouted “foul” and tried to stop those proceedings; the claim was statute-barred it said.
Not so, said the court. An adjudicator’s decision gave rise to an independent cause of action, separate from the underlying dispute. As such, it did not matter that the court proceedings were started more than six years after the breach of contract, provided they were started within six years of the adjudicator’s decision.
What does this mean in practice?
Parties will be bound by statutory limitation periods when they start an adjudication, but will have another 6 years from the adjudicator’s decision to start court (or arbitration) proceedings about that decision.
and what is happening today?
I am already seeing parties refer disputes over final accounts that are 2 or 3 years old. I suspect it will not be long before those are 4 or 5 years old. As parties are not building things, they have more time to look back over old contracts and see where money is owed, retentions not paid and the like. This may not be what Parliament intended – adjudication was supposed to be about getting quick decisions during a contract over payment – but is a growing reality in the current recession.
