Examples of a dispute include: a disagreement between the parties to a construction contract about whether an amount is payable under the contract, the reasons given for non-payment of that amount, or whether there has been a breach of a term of the contract including any breach of any terms or warranties implied into the contract by the Building Act 2004 or any other legislation.
There is no acid test as whether a dispute has arisen. The case law, thus far, has not produced any hard-edged legal rules as to what constitutes a dispute. It serves only as guidance as to whether a dispute has ‘crystallised’ in a particular situation. The key points to be distilled from the case law may be summarised as follows:
- The law adopts an inclusive interpretation as to what amounts to a dispute.
- The word dispute should be given its ordinary everyday meaning, not some special legal meaning conferred on it by lawyers.
- The mere fact that one party notifies another of a claim, does not automatically and immediately give rise to a dispute.
- There must be a claim, assertion, or adoption of position by one party which is expressly or by implication rejected or at least not accepted by the other, whether or not there is any answer to that claim in fact or in law.
- The claim, assertion, rejection or non-acceptance does not need to be in writing or to be in any form or necessarily detailed.
- One should look at the essential claim which has been made and fact that it has been challenged rather than the precise grounds upon which it has been rejected or not accepted.
- Silence may not necessarily mean there is a dispute - it depends on the length of the silence and whether the gist of the issues is familiar to the responding party.
- The history and the context in which the dispute is said to have arisen are relevant.
- Courts, adjudicators and arbitrators should not adopt an overly legalistic analysis of what the dispute between the parties is.
- If the claim presented is so nebulous and ill-defined that the responding party cannot sensibly respond, neither silence nor an express non-admission is likely to give rise to a dispute.
- A dispute can comprise a single issue or any number of issues within it.
- One needs to take account of the fact that Parliament provided for a speedy means of resolving construction contract disputes by adjudication.
Whether a dispute has crystallised remains a question of fact, and will be determined by an adjudicator looking at all the surrounding circumstances.