Willmott Dixon Housing Limited (formerly Inspace Partnerships Limited v Newlon Housing Trust [2013] EWHC 798

This summary was provided by CMS Cameron McKenna LLP.

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

Summary

Overview: (1) The referring party had sufficiently complied with an adjudication rule providing for referral of the dispute to the adjudicator within seven days of the notice of adjudication and the adjudicator therefore had jurisdiction. (2)Failure to comply with a requirement of an adjudication rule that the referring party should serve a copy of the referral documents upon the other party at the same time as he served the adjudicator did not mean that the adjudicator had no jurisdiction (3) The fact that an adjudicator was the same adjudicator appointed to deal with multiple adjudications did not have any effect on the adjudicator’s jurisdiction to determine the disputes referred to him in each of those adjudications.

Technology and Construction Court, Mr Justice Ramsey

Background:

On 30 March 2007, Newlon Housing Trust (“Newlon”) employed Willmott Dixon Housing Ltd (“Willmott Dixon”) under a contract (“the Contract”) as the contractor for part of a development known as Hale Village, Tottenham Hale, London.

The Contract included the ACA Standard Form of Contract for Project Partnering (PPC 2000), as amended. Clause 3.1 provided: "The Partnering Team members shall work together and individually, in accordance with the Partnering Documents, to achieve transparent and cooperative exchange of information in all matters relating to the Project ……" Clause 27 and Appendix 5 Part 2 provided for adjudication under the Model Adjudication Procedure published by the Construction Industry Council (the “CIC Rules”).

Rule 14 of the CIC Rules required the referring party to send to the Adjudicator within 7 days of giving the notice of adjudication, and at the same time copy to the other party, a statement of its case including a copy of the notice, the Contract, details of the circumstances giving rise to the dispute, the reasons why it was entitled to the redress sought, and the evidence upon which it relied. Rule 15 provided that the date of referral would be the date on which the Adjudicator received the statement of case.

A dispute arose as to whether Willmott Dixon was entitled to be paid under the Contract for certain basement works. An adjudication that was not the subject of this case had given rise to a decision on 22 August 2012 that Willmott Dixon was entitled to be paid. Willmott Dixon applied for payment for those works but no payment was made by Newlon.

On 9 October 2012, Willmott Dixon served a notice of intention to refer to adjudication a dispute in relation to sum due for the basement works and a separate notice of intention to refer to adjudication a dispute in relation to its entitlement to be paid sums withheld by Newlon on account of liquidated damages (“the Adjudications”).  The CIC appointed the same person as adjudicator for both Adjudications and the Adjudicator and the parties conducted the Adjudications separately throughout.

On 11 October 2012, Willmott Dixon sent a letter to the Adjudicator in identical terms in each Adjudication stating that “with the hard copy of this letter I will be sending the Referral together with a file containing a bundle of copy documents. This letter and enclosures are being sent for guarantee delivery to you tomorrow and a copy of this letter and enclosures are likewise being sent in the same manner to Trowers & Hamlins.”

On 19 October, Newlon submitted a Response in each of the Adjudications which made reference to a Referral dated 27 July 2012 (which was from the previous adjudication and which had been included in the supporting documents sent on 11 October) and not to the Referrals dated 11 October 2012.  It raised an objection on the basis that Willmott Dixon had not sent a referral document to the Adjudicator which complied with Rule 14 of the CIC Rules. In its Replies, Willmott Dixon asked why Newlon had not addressed the issues raised in the Referrals of 11 October and enclosed further copies. 

After correspondence during which there was confusion over whether the Referrals had in fact been sent, the Adjudicator wrote: “I have no wish to add to the confusion on service of the Referral. I have found my copy of the Referral comprising three pages served on 11 October 2012. It was not in the black file but behind the separate covering letter which became unattached from the main black file.”

The Adjudicator gave his decisions on 8 November 2012: in relation to the the basement quantum dispute the Adjudicator held that Newlon should pay Willmott Dixon the total sum of £155,697.42 plus his fees and expenses. In relation to the LAD dispute he ordered Newlon to pay the total sum of £130,019.69 plus his fees and expenses.

Willmott Dixon commenced court proceedings to enforce the award on 6 December 2012 after the sums were not paid. This led to a hearing of a Part 24 application for summary judgement in relation to the Adjudications by Willmott Dixon.

Issues

The Court was asked to address the following questions:

  • Whether the Adjudicator lacked jurisdiction because the Referrals been not been served on the Adjudicator within seven days of the notice of adjudication?
  • Whether the Adjudicator lacked jurisdiction because the Referrals been not been served on Newlon within seven days of the notice of adjudication?
  • Whether the Adjudicator lacked jurisdiction because the two disputes were referred to the same adjudicator?

Decision

The Court held that:

  • On the evidence, it could not be contended that the Adjudicator did not receive the Referrals with the letters of 11 October. Even if the Referrals had not been included with the covering letters, the letters and enclosed bundles of documents sufficiently set out a statement of Willmott Dixon’s case for the purposes of the requirement under Rule 14 of the CIC Rules that the referring party should send the Adjudicator a statement of case within 7 days of the notice of adjudication.
  • The requirement in Rule 14 that a copy of the statement of case be sent to the other party at the same time as it was sent to the Adjudicator (unlike the requirement to serve a copy of the statement of case on the Adjudicator himself within 7 days of the notice of adjudication) was not a term which if breached would lead to the Adjudicator not having jurisdiction. If there was a failure to serve a copy of the statements of case on Newlon then this would go (depending on the circumstances) to a question of whether the procedure had complied with natural justice, rather than going to jurisdiction. In the event, Newlon served Rejoinders and dealt with the Referrals and therefore it could not be contended that the rules of natural justice were breached.
  • In any event the letters of 11 October and the enclosed bundles of documents, which were sent to Newlon, were a sufficient statement of Willmott Dixon’s case to comply with Rule 14. 
  • Further, Newlon had agreed by clause 3.1 of the Contract “to achieve transparent and cooperative exchange of information in all matters relating to the Project”.  In accordance with that clause, Newlon should have contacted Willmott Dixon to confirm that the Referral document of 27 July was really intended to be Willmott Dixon's Referral document for the current dispute. Any failure to serve the Referral document on time would not have occurred had Newlon not been in breach of their obligations and Newlon could rely on its own breach.
  • Willmott Dixon was entitled to refer the two disputes to adjudication by giving two notices of adjudication and making two referrals to adjudication. The fact that the Adjudicator was then the same adjudicator appointed to deal with each of the two adjudications did not have any effect on the Adjudicator’s jurisdiction to determine the disputes referred to him in each of those Adjudications. An argument based on the reference in s.108(1) to "a dispute" being "one dispute" may not be correct; the reference to "a dispute" was more likely to be a generic reference to "a dispute", without seeking to limit it to a singular dispute.
  • Accordingly Newlon did not have any real prospect of resisting enforcement of the decisions in either Adjudication and Willmott Dixon was entitled to summary judgment.

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