Wycombe Demolition v Topevent Limited [2015] EWHC 2692

Judgment date: 31 July 2015

• The defendant employer resisted the contractor’s claim for summary judgment for three reasons and challenged the decision made by the adjudicator.
• Both elements of the payment said to be due from the employer to the contractor were different components of the same dispute.
• The argument that failure on the part of the adjudicator to attend a site visit or meeting was a material breach of natural justice was “hopeless”. It is up to the adjudicator to decide what he or she needs in order to reach the decision. In this case, the adjudicator did precisely that and explained why a site visit/meeting was not a proportionate use of his time and therefore the costs of the adjudication.
• An adjudicator has to do his best with the material with which he is provided. He has considerable scope to look at that material and reach his own conclusions. He is not bound to accept either figure advanced by the parties.

Technology and Construction Court, Mr Justice Coulson

Background

Topevent Limited (Topevent) engaged Wycombe Demolition Limited (“Wycombe”) to carry out certain demolition works at a site in High Wycombe, Buckinghamshire.

It was common ground between the parties that there was a construction contract between them but there was a dispute as to when that contract was made and as to its relevant terms.

Issues arose between the parties. Wycombe had raised invoices but Topevent did not make payment as it was concerned about incomplete works. Therefore Wycome referred the dispute to adjudication on 26 February 2015 (the dispute under the contract having crystallised towards the end of 2014).

In the contractor’s Notice of Adjudication, under the heading “The Redress Sought”, Wycombe gave specific figures for various elements of the claim totalling £137,252.93. The Notice claimed (in the alternative) “in each case such other … amounts … as the Adjudicator shall determine”. In its Response to the Referral, Topevent made a counterclaim for £180,000; this figure represented the value of the works which the employer claimed were outstanding.

In his decision (dated 22 April 2015), the Adjudicator concluded that the sum of £113,666.63 (together with interest and his fees and expenses) was due from the employer. Topevent challenged the Adjudicator’s decision and resisted Wycombe’s claim for summary judgment for three reasons noted below. This led to the present case coming before the Court.

Issues

The court was asked to decide:

1. Whether the Adjudicator lacked jurisdiction for determining multiple disputes. The employer complained that the Adjudicator had no jurisdiction because more than one dispute was referred to him. Therefore, the Adjudicator was addressing both the issue of valuation and the separate issues of the termination/cessation of works on site – two separate disputes.
2. Whether failure on the part of the Adjudicator to attend a site visit/meeting constituted a material breach of the rules of natural justice.
3. Whether there was a breach of natural justice in the Adjudicator’s decision on valuation, said to be on a basis that had not been advanced by either party.

Decision

The Court held:

• The Notice of Adjudication made plain that the dispute between the parties concerned the outstanding payment due to Wycombe following cessation of works on site. This payment was made up of a number of elements, including both the value of variations and the financial consequences of termination and demobilisation. Both elements of the payment were part of the same dispute; they were simply different components of the total sum in dispute. Accordingly, the first jurisdictional challenge failed. [Paragraph 12]
• The argument that failure on the part of the Adjudicator to attend a site visit or meeting was a material breach of natural justice was “hopeless”. The adjudicator is uniquely responsible for the organisation of an adjudication, the procedure and process to be adopted and the steps required before the decision is issued to the parties. They are to decide what they require in order to reach their decision. In this case, the Adjudicator did that and carefully explained why a site visit/meeting was not a proportionate use of his time and therefore the costs of the adjudication. There is plentiful authority for the proposition that an adjudicator is not generally obliged to arrange or attend any sort of meeting: ROK Building Ltd v Celtic Composting Systems Ltd No 2 [2010] EWHC 66 (TCC). [Paragraph 23]
• The final challenge raised by Topevent was its best argument – that the Adjudicator failed to decide the valuation dispute on the basis of the parties' respective submissions, and instead decided it on a basis on which the parties had not had an opportunity to address him (constituting another material breach of natural justice). The Court, however, decided that this argument should not succeed. The adjudicator carefully considered the submissions of both parties and then provided his own valuations based on those submissions.
• “An adjudicator has to do his best with the material with which he is provided. He has considerable latitude to reach his own conclusions based on that material, and he is certainly not bound to accept either one or other of the figures advanced by the parties. ”. [Paragraph 30]
• The employer’s counterclaim was rejected: “It is axiomatic that a defending party cannot seek to prevent enforcement of an adjudicator’s Decision by reference to a counterclaim that the adjudicator has himself considered and rejected.” [Paragraph 35]
• The Court granted summary judgment in favour of Wycombe, together with interest and costs.

For the full judgment, click here.