Woods Hardwick Ltd v Chiltern Air Conditioning Ltd HT 00/28

This summary was provided by CMS Cameron McKenna LLP.

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If there are significant departures from the Scheme's rules, the Court will not enforce the adjudicator's decision. Adjudicators should take care if they provide evidence for use in enforcement proceedings. A proper abatement is outside Section 111 and a notice to withhold is not required.

HHJ Thornton QC, Technology and Construction Court

2 October 2000

W applied to enforce 2 adjudicator's decisions (from 2 different contracts) against C. For the first decision, C argued that the judgment should be stayed pending the trial of its action against W arising from another unrelated contract. The Court held that this was no reason to hold up payment of the adjudicator's award, and awarded judgment.

C challenged the decision in the second adjudication (by the same adjudicator) on the grounds that there were procedural errors and the adjudicator failed to act impartially. W had claimed monies for unpaid invoices, an additional fee to take account of the increase in the value of the works, and fees for additional works. The contract was an informal written contract. C denied that these sums were due. It did not believe that W had carried out its works correctly. C had not served any notice to withhold payment, but made a set off and cross claim in the adjudication. Its main ground for resisting payment was that the monies were not due because the work was incomplete, and the fees should be abated for W's breach of contract. The Court noted that a proper abatement would not be caught by Section 111 of HGCRA (this contradicts Whiteways v Impresa Castelli).

The adjudicator dismissed C's defences. In reaching his decision, he had conducted site meetings, received documents from both parties and carried out investigations with W's personnel, relevant sub-contractors, the local planning authority and the solicitor manning the RIBA helpline. C complained that the adjudicator had prevented it from fairly presenting its case, had taken evidence from W and third parties but not allowed C to comment upon it and that he provided W with a witness statement for use in the enforcement proceedings which contained partisan views.

The Court found that the adjudicator formed adverse views about C commenced at an early stage. Therefore, he had to ensure that he allowed C a fair opportunity to present its case. He had obtained additional information, but did not inform C of this or of its content. C told the Court that it could have produced documents to contradict this information, had it known about it. The Court found that the information was highly material to the key issues to be determined. It was a clear breach of paragraph 17 of the Scheme for the adjudicator not to make the information available to C.

The Court also commented upon the witness statement that the adjudicator provided. If such a statement is to be provided (and it is unusual), it should be a neutral factual account. The adjudicator exceeded the requirement of neutrality by showing that he had taken strongly against C, and by attempting to argue W's case and expand his reason. C could reasonably hold an objective opinion that the adjudicator was not impartial. The Court held that where departures from the Scheme's rules were significant, the decision is taken outside the framework of the Scheme and a Court will not ordinarily enforce it.

If there are significant departures from the Scheme's rules, the Court will not enforce the adjudicator's decision. Adjudicators should take care if they provide evidence for use in enforcement proceedings. A proper abatement is outside Section 111 and a notice to withhold is not required.

This summary was provided by CMS Cameron McKenna LLP.

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

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