Marc Gilbard 2009 Settlement Trust (trustees of) v OD Developments and Projects Ltd

Factual and Procedural Background

The Plaintiff employed the Defendant contractor to carry out works at a property in The City under a contract incorporating the JCT Standard Building Contract, Without Quantities, Revision 2 (2009), which included provisions for a Final Certificate. On 3 December 2013, the Contract Administrator issued a Final Certificate indicating a sum due from the Defendant to the Plaintiff. Within the 28-day challenge period, the Defendant initiated Part 7 proceedings in the Technology and Construction Court (TCC) disputing the validity and correctness of the Final Certificate. These proceedings have proceeded slowly and, after 13 months, a first Case Management Conference had not yet been fixed. The Defendant now seeks to refer the matters raised in the Part 7 claim to adjudication, presumably as an alternative or fallback to the ongoing litigation. The Plaintiff contends that such adjudication proceedings are no longer permissible because they were not commenced within 28 days of the Final Certificate. To resolve this dispute, the Plaintiff issued Part 8 proceedings seeking declaratory relief on the interpretation of the contract clause relating to the Final Certificate and declarations concerning the sum due under it.

Legal Issues Presented

1. Whether a party who has challenged a Final Certificate within the prescribed 28-day period by issuing court proceedings (Part 7) can subsequently commence adjudication proceedings on the same matters outside of that 28-day period;
2. The proper interpretation of clause 1.9.3 of the contract, specifically whether it permits multiple sets of proceedings challenging the Final Certificate or restricts challenges to a single set of proceedings commenced within 28 days;
3. Whether the restriction in clause 1.9.3 fetters the Defendant’s contractual right to adjudicate disputes “at any time,” as generally recognized in construction contracts;
4. The effect of the Final Certificate’s conclusivity in proceedings commenced after the 28-day challenge period;
5. Whether the contractual provisions limiting the time to challenge the Final Certificate are consistent with the Housing Grants (Construction and Regeneration) Act 1996.

Arguments of the Parties

Plaintiff's Arguments

• Clause 1.9 is straightforward: the Final Certificate is not conclusive only in proceedings commenced within 28 days; any proceedings commenced thereafter, including adjudication, are barred from challenging the certificate.
• This interpretation aligns with business common sense and established adjudication authorities.
• The clause aims to provide finality and certainty by limiting challenges to one set of proceedings commenced promptly.
• The Plaintiff is entitled to issue adjudication proceedings to recover the certified sum, which should be held until the conclusion of the existing Part 7 proceedings.

Defendant's Arguments

• Because the Final Certificate was challenged in time by the Part 7 proceedings, it remains inconclusive for all dispute resolution proceedings, including those commenced later.
• The saving provision in clause 1.9.3 applies only to the matters related to those proceedings, so a subsequent adjudication on the same matters should be permitted even if commenced after 28 days.
• Prohibiting subsequent adjudication proceedings would unlawfully fetter the Defendant’s right to adjudicate “at any time” under construction law.
• Argued that clause 1.9.3 should be interpreted to allow multiple proceedings on the same matters as long as the initial challenge was timely.
• Suggested that the contractual limitation on adjudication rights conflicts with the Housing Grants (Construction and Regeneration) Act 1996.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analysed the contractual provisions, focusing on clause 1.9.3, which limits challenges to the Final Certificate to proceedings commenced within 28 days. The Court rejected the Defendant’s broad interpretation that a timely initial challenge permits subsequent proceedings on the same matters indefinitely. Instead, the clause was interpreted to permit only one set of proceedings challenging the Final Certificate, commenced within the 28-day window, with the saving provision applying only to matters raised in those proceedings.

The Court emphasised the purpose of the clause: to provide finality, certainty, and commercial common sense by preventing protracted, overlapping disputes and multiple challenges long after project completion. It held that permitting multiple sequential proceedings would undermine these objectives and increase costs unnecessarily.

The Court acknowledged the exception in clause 1.9.4, which allows a party to commence arbitration or court proceedings within 28 days after an adjudicator’s decision, but stressed that this does not extend to starting new adjudication proceedings after the 28-day limit.

Regarding the Defendant’s argument that the limitation fetters the right to adjudicate “at any time,” the Court found no such fetter. The contractual right to adjudicate remains, but it is circumscribed by the agreement to limit challenges to the Final Certificate to the 28-day period. The Defendant’s choice to litigate initially rather than adjudicate within that period meant it lost the right to challenge the certificate later by adjudication.

Finally, the Court rejected the submission that the contractual limitation conflicts with the Housing Grants (Construction and Regeneration) Act 1996, holding that the Act does not grant an unfettered right to adjudicate irrespective of contractual terms, and that conclusivity provisions like these are consistent with the Act’s purpose to limit post-completion disputes.

Holding and Implications

The Court held that the Final Certificate issued on 3 December 2013 is not conclusive evidence in respect of the matters raised in the existing Part 7 claim, which was commenced within the 28-day challenge period. However, it is conclusive evidence in any other proceedings commenced after that 28-day period, including any adjudication proceedings proposed by the Defendant over a year later.

The Court further held that clause 1.9.3 permits only one set of proceedings challenging the Final Certificate, commenced within 28 days of its issue, and does not allow subsequent proceedings on the same matters outside that period except under the limited conditions of clause 1.9.4. The Defendant’s right to adjudicate “at any time” is not fettered but is subject to this contractual limitation.

The practical implication is that the Defendant cannot commence adjudication proceedings now to challenge the Final Certificate; the existing Part 7 proceedings are the sole vehicle for resolving those disputes. The Defendant’s delay and choice to litigate initially have precluded a later adjudication challenge. No new precedent was established beyond the application of existing principles to the facts.