OSC Building Services v Interior Dimensions Contracts: Interim or Final

January 2009

This case concerned the issue of whether an adjudicator can give a decision as to an interim payment when the dispute referred was about the Final Account.

IDC had engaged OSC to carry out various drainage works on a medical centre project.  OSC had made various interim applications for payment including Application No.10 which was entitled Draft Final Account.  OSC submitted 2 revisions to this application following further requests for information.  IDC found that a further sum was due to OSC but did not make any payment of that sum.  OSC then advised it would compile its final account.  Shortly thereafter, OSC referred the matter to adjudication saying "the dispute concerns non payment by IDC to OSC in respect of OSC's final account".

The adjudicator found an interim sum was due and made it clear that he was not making a decision as to the value of the final account.  IDC refused to comply with the decision on the basis that OSC had referred a dispute concerning the value of the final account to adjudication and therefore the adjudicator had no jurisdiction to award an interim payment.  OSC sought enforcement of the decision.

The sums claimed by OSC differed in the Notice and Referral but no jurisdictional challenge was raised by IDC about this during the course of the adjudication.  The court found that the increased sum claimed in the Referral did not amount to an enlargement to the dispute which was essentially about what sum was due to OSC.  Furthermore, OSC had requested the adjudicator to determine “any other such sum” due to them.

Mr Justice Ramsay held that the adjudicator was entitled to look at the context and timing of the application to establish that although OSC referred to the final account, what was actually in dispute was an interim payment.  This was particularly so where OSC had written to IDC to advise that a final account was being prepared. 

Although there are clear distinctions between an interim application and a final account, the judge agreed with OSC's submission that "it is the substance of what the parties were doing and not the label attached by them to those documents, that is of importance".

The full judgement can be found here.

OSC Building Services Ltd v Interior Dimensions Contracts Ltd [2009] EWHC 248

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