Recovering ‘quick and dirty’ adjudication sums

The United Kingdom’s Supreme Court recently confirmed that British construction contracts contain an implied term that the loser of an adjudication, who pays a sum ordered by the adjudicator, has a right to recover that sum if a final determination on the merits holds that the sum should not have been awarded to the winner of the adjudication.

Although adjudication in the United Kingdom is a contractual and not a statutory process, a New Zealand court is likely to come to a similar result (albeit not necessarily by the same route). The basic intention of adjudication under the New Zealand Construction Contracts Act 2002 is to provide a ‘quick and dirty’ decision to prevent the hold-up of cash flow ‘leaving a final determination of financial rights and obligations to be arrived at later’. (See, for example, paragraph [11] of Marsden Villas Ltd v Wooding Construction Ltd [2007] 1 NZLR 807)

UK Supreme Court, credit: supremecourt.uk

UK Supreme Court, credit: supremecourt.uk

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