Friday saw another convincing enforcement of an adjudicator’s decision as the High Court of Ireland continuing to support and promote adjudication as an effective form of dispute resolution in Ireland.
The Adjudication
McGill referred a payment dispute with Blue Whisp to adjudication. Ms Niav O’Higgins was appointed as the adjudicator and issued a decision awarding payment of €1.25m to McGill on 31 December 2023.
The Enforcement Proceedings: McGill Construction Ltd -and- Blue Wisp Ltd [2024] IEHC 205.
Blue Whisp objected to paying and the parties headed to the High Court for enforcement. The judgement was delivered by Mr. Justice Garret Simmons (“the Judge”) on 19 April 2024. He backed McGill on all the issues Blue Whisp raised.
Issue 1 – Can a payment dispute encompass claims under two separate payment notices? Yes.
Blue Whisp said that a “payment dispute” under Irish Law must be confined to a complaint that an individual payment claim notice had not been paid. The Judge concluded that there is nothing within the Construction Contracts Act 2013 (“the CCA”) that confines a payment dispute in this manner.
This is perhaps the most significant aspect of the judgement as it settles and (likely in some people’s eyes) broadens the definition of a “payment dispute”. A payment dispute is not limited to the content of a single payment claim notice. How wide a “payment dispute” remains to be seen, but this judgement doesn’t point to any edges.
Issue 2 – Was the payment dispute properly referred within the prescribed seven-day period? Yes
The Referral was issued on the cusp of midnight on the seventh day after the adjudicator was appointed. Blue Whisp said it was out of time because it arrived in the Adjudicator’s company IT system two minutes before arriving in the Adjudicator’s actual inbox, which was after midnight according to Blue Whisp.
The Judge didn’t back Blue Whisp on this. Disappointingly, the judgment did not consider if issuing the notice one minute late would have invalidated the Referral. However, the lengths to which this judgement went to investigate a Referral that was initially thought to have been issued just one minute late strongly suggests that there is little room for error and that the seven-day timeframe to issue a Referral is to be construed very strictly. Don’t be late with the Referral in Ireland.
Issue 3 – Does a failure to provide all appendices citied within the Referral render the Referral invalid? No
Blue Whisp maintained that the failure to provide all appendices referred to in the Referral rendered it invalid. The Judge rejected this argument and the de facto threshold test set by the High Court is that a Referral Notice should provide sufficient detail regarding the nature and extent of the dispute so as to allow the adjudicator to understand it and the responding party to respond to it.
This is obviously a minimum requirement by referring parties and a comprehensive Referral is often the key to obtaining a successful adjudication decision.
Issue 4 – Can an adjudicator defer her decision on a matter argued by either Party if that matter is set to be addressed in a future decision? Yes.
Shortly after McGill referred the dispute to the Adjudicator, Blue Whisp referred a separate claim for defective works to the same Adjudicator . In the decision, the Adjudicator opted not to consider Blue Whisp’s defects claim on the basis that the matter should be dealt with in the separate adjudications.
The Judge decided that the Adjudicator’s deliberate staggering of the awarded amounts in the decision, meant that BWL had been afforded a better opportunity to advance its defective works argument. So, no breach of fair procedures was deemed to have occurred.
Many would consider that the Adjudicator took a practical approach to deciding the parallel adjudications and that this approach may encourage responding parties to commence their own, separate, adjudication in lieu of trying to successfully present a counterclaim in the condensed timeframe involved with issuing a response to a Referral.
So, this point will be of particular interest to those involved on large scale projects in Ireland that are likely to encompass multiple disputes. However, seeking to rely on all adjudicators following this approach without prior agreement might be unwise.
Separately, Blue Whisp argued that, for financial reasons, McGill may be unable to repay the decided amount if ultimately a court decided McGill was not owed the money. the Judge decided that, while the concept of this argument may be legitimate, Blue Whisp failed to produce any credible evidence to support its position.
Conclusion
The High Court in Ireland continues to reiterate the explicit differences between the CCA and similar legislation in the United Kingdom, and judges remain hesitant to directly read across UK caselaw. So, each adjudication enforcement judgement in Ireland is of huge importance to the interpretation of the CCA. However, the courts in Ireland do seem to be mirroring the approach adopted by the courts in England and Scotland as each case reaches them.
Ultimately, the Irish Courts have maintained their 100% enforcement record. However, whilst this judgment provides clarity on certain procedural issues, important questions regarding the CCA remain unanswered, particularly regarding the consequences of failing to respond to a payment claim notice in the required content and timeframe. On this issue, the jury is still out!
