In Gravity Construction Limited v Total Highway Maintenance Limited the High Court has, for the first time, enforced an adjudicator’s award under the Construction Contracts Act 2013 in Ireland.
Under Section 6(10) of the Construction Contracts Act 2013, an adjudicator’s decision shall be binding until the payment dispute is finally settled by the parties or a different decision is reached in arbitration or court. Section 6(11) states: “The decision of the adjudicator, if binding, shall be enforceable either by action or, 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.” In this case the respondent did not pay the adjudication award within the time specified by the adjudicator. The applicant applied to court to have the award enforced and, in December 2020, the respondent indicated that it was prepared to pay the award without prejudice to its right to pursue arbitration, and it offered to provide an undertaking to the court to pay the award within two weeks of the hearing (which was in January 2021).
The Court first considered whether it should make an order against the respondent in circumstances where the respondent was prepared to give a formal undertaking to the court that the sum would be paid. The Court decided to make a form of “unless” order which gave the applicant leave to enforce the adjudicator’s decision in the High Court unless the sum was paid within seven days. The Court described this order as being made pursuant to section 6(11) of the Act. It considered that the framing of the order as an “unless” order represented an appropriate compromise and respected the statutory entitlement of the applicant to relief, while affording the respondent a short period of time to make the payment without a judgment being formally entered against it.
As to costs, the Court considered that the applicant, having been successful in the proceedings, was entitled to its costs in the ordinary way, notwithstanding the settlement offer. The reasons were: (a) the timing of the respondent’s settlement offer, made at the eleventh hour; (b) the wording of the settlement offer, which was at best ambiguous; and (c) the conduct of the respondent, wherein it raised grounds of opposition it did not ultimately pursue, thus delaying proceedings (and allowing the applicant to rack up costs preparing for the proceedings), against a backdrop where the intent of the Act was expedition. The costs element of this judgment is a cautionary tale for parties who delay in complying with an adjudicator’s decision without having meritorious grounds to argue that the decision should be overturned.