Lorraine Lee v Chartered Properties (Building) Ltd [2010] EWHC 1540 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes


Where the Statutory Scheme for Construction Contracts (the “Scheme”) applies to adjudication, the failure of the Adjudicator to deliver his decision as soon as possible after he has reached his decision, in accordance with paragraph 19(3) of the Scheme, will render the decision unenforceable.

Technology and Construction Court, Mr Justice Akenhead


The claimant (“Ms Lee”) engaged the defendant contractor (“Chartered”) to carry out refurbishment works at a residential property pursuant to a standard JCT Minor Works Building Contract Form 2005 edition.  The contract provided that if a dispute arose and a party wished to refer it to adjudication then the Scheme should apply with the RIBA as the nominating body.  The parties fell into dispute regarding the valuation of the final account and Chartered referred the dispute to adjudication.  The Adjudicator was due to reach his decision by 9 November 2009.  At his request the parties extended this deadline until Friday 13 November 2009.  On 12 November 2009 the adjudicator emailed the parties to say that he anticipated finalising his decision by 13 November, but that the decision needed to be typed and proof-read, which would be done by Monday 16 November.  The Adjudicator asked the parties to indicate whether or not they had any objections to this.  Chartered replied to this email, stating that it had no problem with this course of action.  Ms Lee made no reply.  The Adjudicator dispatched his decision late in the afternoon on 16 November.  The decision stated that it was made on 13 November.  The Adjudicator awarded Chartered approximately £45k (inc. of VAT) and also found that Ms Lee was liable for approx £21k of his fees (being 95% of the total).  Ms Lee issued proceedings in the TCC in which she disputed the validity of the decision on numerous grounds.  Chartered counterclaimed in the proceedings, seeking enforcement of the decision.  Both parties subsequently sought summary judgment, which may only be given if the party has no real prospect of success on its claim or defence as the case may be and if there is no other compelling reason why the case or issue in question should be disposed of at trial.    


The Court was asked to consider the following issues:

  • Whether the Adjudicator’s appointment was invalid on the grounds alleged by Ms Lee that Chartered had, contrary to the provisions of the Scheme, requested the RIBA to nominate an adjudicator before it had served notice of adjudication on Ms Lee;
  • Whether more than one dispute had been referred to adjudication (on the basis that the notice of adjudication referred to the failure of the Architect to issue written instructions, certificates and extensions of time and to ascertain the final account value and the failure of Ms Lee to give full possession of the site and pay certified monies and VAT);
  • Whether there was no dispute because all claims and cross claims had been settled;
  • Whether there had been a breach of natural justice by the Adjudicator, on the grounds, first, that the adjudicator had failed adequately to consider Ms Lee’s jurisdictional challenges, and, second, that the adjudication was an “ambush”; and
  • Whether the adjudicator’s decision had been issued within time. 


The Court held:

  • On the facts there was a triable issue as to whether or not the Adjudicator had been validly appointed.
  • Although it is correct to state that under the Scheme, in the absence of express agreement to the contrary between the parties, only one dispute can be referred to adjudication, there was, on the facts of this case, only one dispute, namely the dispute as to the value of the final account.
  • There cannot be a referable dispute in relation to issues or claims in respect of which the parties have settled or compromised as they are no longer capable of being properly disputed.  On the facts there was a triable issue as to whether the parties had settled their respective claims and cross claims.
  • The Adjudicator had no authority or jurisdiction to decide his own jurisdiction.  At most, he had the right to investigate his own jurisdiction and was not obliged to consider or even rule upon jurisdictional challenges.  As such the alleged failure of the Adjudicator to consider jurisdictional challenges did not constitute a breach of the rules of natural justice.
  • There had been no “ambush”.  Having regard to the wording of the Housing Grants, Construction and Regeneration Act 1996 the Court will only find that there has been an ambush which breaches the rules of natural justice in very exceptional cases.
  • The Adjudicator had reached his decision on 13 November.  The extension granted by the parties expressly allowed him to reach his decision by this date.  The outstanding issue was therefore whether the Adjudicator had delivered a copy of the decision “as soon as possible after” he reached it, in accordance with paragraph 19(3) of the Scheme.  There was no obvious good reason why, with some effort and application, the decision could not have been communicated on 13 November; and no obvious explanation as to why virtually the whole of the working day of 16 November was required before the decision was sent out.  The decision did not comply with paragraph 19(3) of the Scheme and accordingly it was unenforceable.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes


Click here to read full-screen | Click here to print the case