PC Harrington Contractors Ltd v Tyroddy Construction Ltd

PC Harrington Contractors Ltd v Tyroddy Construction Ltd

The adjudicator's decisions are unenforceable due to a material breach of natural justice: he wrongly excluded consideration of Harrington's defence regarding the true value of the final account and set-off, treating it as outside his jurisdiction without giving the parties an opportunity to be heard on that point. There is no implied term in the contract that retention is only payable after the final account is agreed; retention is payable within a reasonable time after completion, subject to any valid defence such as set-off or abatement, which is not excluded by the contract.

Parties
Claimant: PC Harrington Contractors Limited; Defendant: Tyroddy Construction Limited
Jurisdiction
England and Wales
Judgment Date
25 March 2011
Procedural Posture
Part 8 Proceedings (construction Adjudication Enforcement) / Judgment on Enforceability of Adjudicator's Decisions and Contract Interpretation
Outcome
Adjudicator's decisions declared unenforceable for breach of natural justice; declaration granted regarding right to raise set-off/abatement as defence to retention claim.
Legal Topics
Adjudication Enforcement, Natural Justice, Retention Under Construction Contracts, Implied Terms, Set Off and Abatement
Construction Law Contract Law Civil Procedure Adjudication Enforcement Natural Justice Retention Under Construction Contracts Implied Terms Set Off and Abatement

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Parties

PC Harrington Contractors Limited

Claimant

Tyroddy Construction Limited

Defendant

Procedural Posture

Part 8 Proceedings (construction Adjudication Enforcement) / Judgment on Enforceability of Adjudicator's Decisions and Contract Interpretation

Legal Issues

  1. 1 Whether the adjudicator's decisions are unenforceable due to breach of natural justice
  2. 2 Whether retention is only payable after final account is agreed or ascertained
  3. 3 Whether the contract allows set-off or abatement against retention claims

Ratio Decidendi

The adjudicator's decisions are unenforceable due to a material breach of natural justice: he wrongly excluded consideration of Harrington's defence regarding the true value of the final account and set-off, treating it as outside his jurisdiction without giving the parties an opportunity to be heard on that point. There is no implied term in the contract that retention is only payable after the final account is agreed; retention is payable within a reasonable time after completion, subject to any valid defence such as set-off or abatement, which is not excluded by the contract.

Court Disposition

Adjudicator's decisions declared unenforceable for breach of natural justice; declaration granted regarding right to raise set-off/abatement as defence to retention claim.

Orders

  • The adjudicator's decisions are not enforced.
  • Declaration: Harrington may raise set-off or abatement as a defence to Tyroddy's retention claim, subject to contract terms.