Mailbox (Birmingham) Ltd v Galliford Try Building Ltd

Case reference: 
[2017] EWHC 1405 (TCC)
Wednesday, 21 June 2017

Key terms: 
Adjudication – Jurisdiction – Multiple adjudications

This case develops further from the earlier dispute in Mailbox (Birmingham) Ltd v Galliford Try Building Ltd [2017] EWHC 67 (TCC). In this case, Mailbox (Birmingham) Ltd, the employer, made a Part 8 claim against Galliford Try Building Ltd, the contractor, seeking wide-ranging declarations that the adjudicator’s first decision outlined final decision on Mailbox's entitlement to liquidated damages (subject only to any subsequent challenge in court) where no subsequent adjudication can have the jurisdiction to consider any further extension of time claims made by Galliford.

As Mr Justice Coulson explained, this case involved two opposing principles. Once a crystallised dispute has arisen, a defending party in adjudication cannot seek to limit the defence previously advanced and save parts of that defence for another day. Conversely, in a second adjudication, a contractor is entitled to defend themselves against a claim for liquidated damages by relying on a full extension of time claim in an earlier adjudication.

Coulson J considered the issues between the parties by examining Mailbox's claim for entitlement to liquidated damages, Galliford’s claim for extensions of time, and Galliford’s claim for wrongful termination. In relation to Mailbox's claim for entitlement to liquidated damages, it was "beyond argument" that Mailbox was entitled to retain the whole of the liquidated damages awarded by the adjudicator unless subsequent challenge in court reaches a contrary view. The crystallised dispute involved the entirety of the liquidated damages claim and the whole of extension of time entitlement by Galliford. Galliford were not entitled to seek to defend themselves by reference to just a few of the potential relevant events, and keep others back for another day. Coulson J outlined that it was an "unwise course" for Galliford to ask the adjudicator in its first adjudication to consider only three relevant events as it was a "high-risk policy".

Although the adjudicator did not have jurisdiction to consider the remainder of its extension of time claim in the second adjudication, he did have jurisdiction to consider the termination claim and all the evidence regarding whether Galliford Try proceeded “regularly and diligently” with the works. As the termination claim was not part of the crystallised dispute in the first adjudication, it would be wrong to restrict the second adjudicator and Galliford “by ruling that the issue could only be decided by reference to the extended date set in the first adjudication”. Further, Galliford ought to be entitled to take whatever points they choose about their regular and diligent performance of the work.

This case reiterated the established principle that a referring party can "cherry-pick" aspects of a dispute to be referred to an adjudicator, and whilst responding party must deploy all of its defences no artificial or unjust restrictions will stop the an adjudicator considering relevant issues in a further adjudication.

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