A recent decision in the TCC provides a useful reminder of three important issues in adjudication: when does a dispute crystallise for the purposes of adjudication; what scope is there to resist enforcement of an adjudicator’s decision on the grounds of breach of the rules of natural justice; and when is it possible to “sever” an adjudicator’s decision in circumstances where his jurisdiction is questioned in relation to one but not all elements of a dispute.
The claimant contractor made an application for summary judgment for enforcement of an adjudicator’s decision. The defendant employer asserted that a new claim for loss and expense based on new expert evidence had been made in the adjudication. The defendant therefore argued that there was no crystallized dispute in relation to the claim and consequently the adjudicator had no jurisdiction to determine the claim.
The defendant also argued that the volume of new evidence served by the claimant in relation to the new claim was such that the defendant did not have a fair or effective opportunity to respond, and as such the Decision was made in breach of the rules of natural justice. In rejecting the defendant’s arguments and granting summary judgment, Akenhead J made the following points:
- A refusal of a claim for payment on the grounds that insufficient information has been provided will generally give rise to a dispute, unless the claim is “nebulous and ill-defined”. Bearing this in mind, the Courts will treat with caution any “no dispute” arguments on grounds of insufficient information, where it is pretty clear from the circumstances that the defendant had a good idea what the claim was about
- In order to determine whether a claim is disputed, it is necessary to differentiate between the substance of a dispute referred to adjudication and the evidence needed to support or contest the disputed claim. The fact that evidence submitted during an adjudication is new does not mean that the dispute itself did not crystallise prior to the adjudication
- Breach of the rules of natural justice may provide a basis for resisting enforcement, but only if the breach is material. The fact that a dispute is complex or involves considering a large volume of documents will not necessarily mean that an adjudication is procedurally unfair, and the mere fact that there has been an “ambush” will not of itself amount to procedural unfairness. It is open to an adjudicator to decline the appointment or to withdraw if he believes that justice cannot be done within the adjudication timetable. (These issues were considered in an earlier article - click here to view)
- If a party fails to complain about a breach of natural justice during the course of the adjudication, but then makes such assertions in defence of enforcement proceedings, the failure to complain at the relevant time will be persuasive evidence that there has been no breach
- Given that the Court rejected the defendant’s arguments in relation to jurisdiction and natural justice, the issue of severability did not fall to be decided. The Judge did indicate nevertheless that if he had decided that the adjudicator had no jurisdiction to deal with the “new” loss and expense claim because it had not crystallised prior to the adjudication, it may well have been possible to sever this from the balance of the claim which would have led to an order for the enforcement of the claim for the balance only. On the other hand, if he had decided that insufficient time had been allowed to the defendant in the adjudication in breach of natural justice, this case would probably not have been suitable for severance because the unfairness would have infected the whole
Reference: Bovis Lend Lease Limited v The Trustees of the London Clinic
