Macob Civil Engineering v Morrison Construction Limited 1999
This is a simple case-study of the adjudication case presented in Macob Civil Engineering v Morrison Construction Limited 1999.
Why does Macob Civil Engineering v Morrison Construction Limited matter?
This is one of the first cases that really asks the question ‘is the adjudication decision enforceable’? The Construction Act 1996 introduced Adjudication as a process to quickly and cheaply solve disputes in construction to allow projects to continue.
If parties were not obliged to follow the adjudicators decision then there would be no point to the process.
What happened in Macob Civil Engineering v Morrison Construction Limited ??
Morrison was the main contractor and sub-contracted the groundworks package out to Macob.
Macob for whatever reason did not get paid one of their interim payments and so referred the dispute to adjudication. The Adjudicator found with Macob and ordered Morrison to pay monies to Macob.
Instead of Morrison complying the decision (i.e. paying up) they applied for arbitration to review the decision and settle the dispute.
Macob applied to the construction and technology court for enforcement of the adjudicator’s decision. So, while the dispute was going through arbitration or even the courts process, Morrison had to pay up still.
Morrison claimed that the decision was wrong, that the Adjudicator had not followed the proper procedure and breached the normal ‘rules of natural justice’ and were therefore justified in applying for arbitration.
How ARROGENT – they basically were saying this adjudication process is meaningless.
If Morrison were allowed to ignore the Adjudicators decision then the whole Adjudication process would be meaningless. It would be ‘toothless’.
Decision
So what was the decision in Macob Civil Engineering v Morrison Construction Limited 1999. The judge of the Construction and Technology court ruled that the decision of the Adjudicator must be enforced.
He confirmed that the losing party cannot on the one hand fail to recognise the decision and at the same time serve an Arbitration notice disputing that same decision.
Also confirmed that it did not matter if there was a breach of natural justice, procedural irregularity, error etc. The decision must be abided by in the interim.
Learning lesson
If someone does not pay up then apply to the construction and technology court claiming the monies due and then apply for a summary judgement.
Intent of Parliament when creating Adjudication Legislation.
Legislation always has a reason. In the case of the The Construction Act 1996 Parliament wanted to bring in a dispute resolution process that was fast, cheap and effective in solving disputes. They wanted a system that could quickly solve a construction dispute to allow the works to continue and cashflows to be fed. It did not matter that the decision could be challenged in the long-term with Arbitration or the Courts System — the important point was the Clients project would get completed and the construction team could duke it over several years if they wanted.
Therefore, the Adjudicators decision, although interim, has to be enforced.