Enforcement of Adjudicator’s Fees in Ireland - High Court Continues to Show Strong Support for the Adjudication ProcessWednesday, 09 November 2022
ByrneWallace LLP recently acted for Western Excavations and Ground Works Ltd (“Western”) in an enforcement of an adjudicator’s decision (Western Excavations and Ground Works Ltd - V - Glenman Corporation Ltd 2022/165 MCA). This led to what is probably the first Court Order in this jurisdiction to enforce the Adjudicator’s own costs element of the Decision in addition to the Adjudicator’s decision in relation to the Referral.
Glenman Corporation Ltd (“Glenman”) was engaged as the main contractor for the carrying out of certain construction works. Glenman, by way of a written sub-contract engaged our client, Western Excavations and Ground Works Limited, as its groundworks subcontractor. A dispute arose over interim payment applications made by Western, with ultimately Western referring the dispute to adjudication pursuant to section 6 of the Construction Contracts Act 2013 (“CCA 2013”).
Two aborted adjudications took place in late 2021, with a third adjudication, the subject matter of the enforcement, commencing in March 2022.
Keith Kelliher of Kelliher & Associates acted on behalf of Western in the adjudication, with our firm assisting during the latter part of the proceedings in addition to representing Western in the enforcement proceedings.
As is common practice, the adjudicator provided within his terms of appointment that both parties were to be jointly and severally liable for the discharge of the Adjudicator’s fees.
The Adjudicator delivered his Decision in May 2022, which was in favour of our client. The Adjudicator furthermore directed that Glenman discharge in full the Adjudicator’s fees and expenses. Glenman failed to comply with the Decision and made no arrangements for payment of the amount payable to Western within the 7 days provided for on foot of the Decision. Furthermore, they failed to discharge the Adjudicator’s costs. The decision of the adjudicator is binding until the payment dispute is finally settled or a different decision is reached on the reference of the payment dispute to arbitration or in proceedings initiated in a court in relation to the adjudicator’s decision (Section 6(10) Construction Contracts Act 2013).
Our client commenced enforcement proceedings on behalf of itself and in respect of the Adjudicators’ fees, while the Adjudicator instigated parallel proceedings in the Circuit Court against both parties in relation to discharge of his fee.
High Court Proceedings
An adjudication decision is enforceable by leave of the High Court, in the same manner as a judgment or order of that Court with the same effect and, where leave is given, judgment may be entered in the terms of the Decision, pursuant to Section 6(11) of the 2013 Act. Our client commenced enforcement proceedings in the High Court seeking to enforce the Adjudicator’s Decision pursuant to section 6(11) of the Construction Contracts Act 2013.
Order 56B of the Rules of the Superior Court, (an adjudication specific order brought in following the introduction of the CCA 2013) provides the rules and mechanisms for enforcing an adjudicator’s decision in the High Court. They are further bolstered by the High Court Practice Direction 105.
The law in this area is somewhat unclear. Both the CCA 2013 and the above-mentioned Order 56B Rule 3(2)(iv) of the Superior Court Rules are silent as to the liability, joint and severable or otherwise, of discharging the Adjudicator’s fees, and thus despite the Decision placing the onus of same on the Respondent, in the absence of compliance, the Adjudicator brought separate Circuit Court proceedings against both the Applicant and the Respondent to recover his fees, representing a strange lacuna in which both parties are theoretically liable until such a time as not only an enforcement order has been obtained and judgement entered against a party, but arguably until payment has been satisfactorily effected.
In addition to granting an order enforcing the substantive amount of the Adjudicator’s Decision, Simons J further granted an Order in favour of Western in relation to the Adjudicator’s Fees. This is the first case in which the court has awarded a party a sum in relation to the Adjudicator’s Fees and shows that the High Court’s approach to Adjudication is very much a positive and supportive one.
Simons J’s support for the legislative intention behind the CCA 2013 is a boon for statutory adjudication in Ireland. Whilst every case will depend on its own facts, it is clear that attempts to cause delay in enforcement proceedings can be taken into account by the High Court in awarding costs. This should be considered a deterrent for those who wish to manipulate litigation in order to avoid paying on foot of an Adjudicator’s decision and keeping a contractor out of its entitlements.
The case also serves as an exhibit of the advantages of the fast-track adjudication and enforcement process envisaged by the CCA 2013. Following the first High Court enforcement of an Adjudicators Decision , this serves as another success for the legislative intention of the 2013 Act, and its readiness for the market in which it operates. The expedition of the Adjudication and the enforcement process and its circumvention of litigious inertia allowed the matter to be resolved and finalised before the related Circuit Court action for the Adjudicator’s fees had progressed any stage beyond the preliminaries, with the entry of an appearance.
While thankfully, from our clients perspective, the enforcement matter proceeded without the need for a full hearing a number of interesting points remain unaddressed in the area of adjudicator’s fees under the CCA 2013:
Section 6 (16) of the CCA 2013 states that “parties shall pay the amount of the fees, costs and expenses of the adjudicator in accordance with the decision of the adjudicator”. It is unclear how this might supersede the adjudicator’s appointment document in the absence of careful drafting of the decision by the adjudicator to retain joint and several liability of the parties. In the case at hand the Adjudicator was careful in their drafting on this point.
In England & Wales, the courts have found that liability to pay an adjudicator’s fees is final and not subject to subsequent challenge. It is not yet clear in the Irish jurisdiction whether this element of an adjudicator’s decision is final or merely “binding until … a different decision is reached on the reference of the payment dispute to arbitration or in proceedings…” (Section 10 CCA 2013).
While in the present case the Adjudicator was added to the enforcement action as a notice party, there is nothing to preclude the Adjudicator who has not had their fees discharged from themselves instigating an enforcement action.
This case should be seen as another staging post for assessing the success of the CCA 2013 and its processes. This recent judgment of the High Court represents a further confirmation of the appetite of the judiciary to robustly support the construction adjudication process and in that regard is a welcome decision.