Adjudication Update

In David McLean Housing Contractors Ltd v Swansea Housing Association Ltd, HHJ LLoyd QC had to consider various applications arising out of an adjudication. During the course of the adjudication, the jurisdiction of the Adjudicator had been challenged on a number of grounds. These included whether the Adjudicator was the right person to have been appointed. This was actually a technical point since both parties would have been happy with the Adjudicator who was actually appointed. The dispute was over the appointing body. The Judge held that the requirement that the appointing body be the Chartered Institute of Arbitrators had been deleted from the contract. Thereby the Scheme took effect and the appointment was a valid one.

Another question involved whether more than one dispute had been referred. The Judge noted that one should approach the interpretation of any document in relation to an adjudication in a "sensible manner" and "try to give effect to its intentions". Paragraph 8 of the Scheme does preclude reference of more than one dispute, without consent. No consent was given. The Notice of Adjudication referred to six separate matters, including an entitlement to loss and/or expense, an entitlement to an extension of time and various valuation issues.

Upon examining the contents of the Notice, the Judge found it plain that the real dispute was about what payment ought to have been made as a result of Application No. 19. This included all the elements reflected in the Notice of Adjudication. For example, loss and expense may not properly be ascertainable until any right to an extension of time has been determined. There was thus only one dispute.

All the money flowing from the decision had been paid save for the liquidated damages, which were disputed. The decision was corrected and the following day the Employer wrote a letter advising that as work was not completed within the contract period (as extended by the adjudicator) it was entitled to deduct liquidated and ascertained damages.

The time for payment of the Adjudicator's decision fell after the letter had been written. Therefore, the Judge held that the defendant had an arguable prospect of successfully maintaining that an effective notice had been given which was sufficient to resist payment of the amounts due.

The defendant had advanced the case in relation to the LADs by way of counterclaim. The claimant sought to stay this to arbitration. However, the Judge refused to do this, holding that the actions taken by the claimant to enforce the decision (which were intimately connected with the subject matter of the counterclaim) and also to strike the counterclaim out amounted to a step in the proceedings.

Stubbs Rich Architect v W H Tolley & Son Ltd concerns a challenge to an adjudicator's fees. An adjudicator, in a dispute under two JCT minor works contracts, delivered two written decisions. Part of these decisions related to his fees in the sum of £1,561.50 plus VAT. Tolley paid the fees but alleged that they were unreasonably excessive.

Tolley then issued a claim to recover the alleged overpayment. At first instance, a Deputy District Judge found in favour of Tolley on two grounds. Not only does an adjudicator not as a matter of law enjoy immunity from a claim that his hours and remuneration are unreasonable but further, the hours claimed were in fact excessive. The adjudicator appealed.

On appeal, Mr Recorder Lane QC considered the adjudication agreement, which repeated the immunity provision set out in Section 108(4) of the HGCRA. He considered that the words should be given their ordinary and natural meaning. Thus he held that the adjudicator's fees formed an integral part of the adjudication agreement and could only be challenged if the adjudicator had acted in bad faith. There was no suggestion or evidence that the adjudicator had acted in bad faith or that the hours claimed were excessive.

The Judge said that a court must be "very slow indeed" to impose its own view as to what constitutes a reasonable number of hours. The appeal succeeded and the adjudicator was awarded his fees.

Expert Evidence

In Pearce v Ove Arup and Others, the claimant pursued amongst others, Rem Koolhaas, described as one of the world's foremost architects, for plagiarism. The case was described by Jacob J as being one of "preposterous fantasy". The claimant's case was supported by expert evidence. The Judge found that evidence to be "fantastic".

In fact, the Judge went further and said the expert evidence fell far short of the standards of objectivity required of an expert witness. The witness did not visit the building, which was subject of the alleged plagiarism. He had not properly read an important document exhibited to his report. His attitude was biased. The Judge felt that the witness had failed, so biased and irrational was his evidence, in his duty to the Court. He did not stand back and take an objective view as to how the alleged copying could have been done. The Judge felt that the expert bore a heavy responsibility for the case coming to trial and specifically referred to the costs and expense of the trial.

The Judge did point out that there was no rule providing for specific sanctions where an expert witness was in breach of his CPR 35 duty. However, the Judge saw no reason why a Judge having formed such an opinion, should not refer the matter to the expert's professional body. Therefore, the Judge said that although it was only right that the expert had an opportunity of being heard about this, unless those representations were successful, he would ask that the expert be reported to the RIBA.

Health & Safety

Railtrack and EWS Railways Ltd were fined £50,000 and £70,000 (plus costs of £9,000) following an investigation into the death of a twelve-year-old child. The child was a trespasser but the companies had failed in their obligation under section 3(1) of the HSWA to ensure the safety of people on their property. In other words they had failed to prevent the trespass onto the railways lines something they were responsible for ensuring.

Costain and Yarm Road were fined a total of £500,000.00 together with costs of £525,000.00 following the death of four men who fell 25 metres when the underslung gantry from which they were working at the M5 Avonmouth Bridge collapsed. The judgment was said to have by the Judge, to have been designed to "be large enough to matter to shareholders as well as to management." It transpired that a similar accident had almost happened over a year previously but a memo reporting the incident had been ignored.

Other Cases of Interest

Keith J dismissed an appeal by Gibbon Equipment Hire Ltd from a levy of £1,600 imposed by the Construction Industry Training Board pursuant to the Industrial Training Levy Order SI 2000/434. The CITB had levied the assessment notice because Gibbon was an "employer in the construction industry". Gibbon's principal business was the hire of a wide range of plant and equipment to commercial and domestic customers. Only 25% of its customers were individuals or companies engaged in the building trade.

Nevertheless, Keith J held that the proper construction of "contractor's plant" was clear, namely that you should look at the uses to which the plant could be put. The overwhelming majority of the plant was of a kind that the hirers could have intended for use on a building or civil engineering site. That only 25% of the customers were in the building trade did not mean that other customers did not intend to use the plant in building operations. As the plant was contractor's plant, Gibbon was an employer in the construction industry.

In Isovel Contracts Ltd v ABB Building Technologies Ltd, Deputy Judge Berry QC was invited to extend the principle of set off in insolvency cases from companies in liquidation to companies in administration. When the CA heard the case of Bouygues v Dahl-Jensen, it held that where there were latent claims and cross claims between the parties, Rule 4.90 of the 1986 Insolvency Rules would apply to provide for a mutual set off. In such circumstances, summary judgment was not the appropriate way to proceed. Dahl-Jensen had of course, gone into liquidation. Here, the DJ awarded summary judgment in favour of the claimant, but refused to stay the judgment hearing pending the hearing of a cross claim. Although the case related to payment of certificates under a DOM Sub-Contract, there had been no adjudication and the Deputy Judge was not persuaded that the Herschel principle (that a stay may be granted if there was a real doubt as to the claimant's ability to repay if it subsequently loses a related action) applied here.

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