| Date | 20 December 2000 |
|
|
| Judgment | Woods Hardwick Limited -v- Chiltern Air Conditioning TCC 2 October 2000 |
|
|
| The Issue | Procedural requirements in adjudication to ensure impartiality and observance of the rules of natural justice. |
|
|
| Implication |
Any perception of impartiality by one party objectively held may be sufficient to prevent enforcement of an adjudicator's decision. |
printIn October of this year I reported the case of Discain -v- Opecprime in which the decision of an adjudicator was refused enforcement by the Technology and Construction Court on the basis that the adjudicator was found to have conducted the adjudication without proper regard to the rules of natural justice. In particular it was held that it was wrongful for the adjudicator to have conducted telephone conversations with one party concerning the issues in dispute without communicating the essence of these discussions to the other party and allowing that party the opportunity to comment. In the more recent case of Woods Hardwick -v- Chiltern Air Conditioning the procedural approach of the adjudicator was also examined. Once again the court found that the adjudicator had failed to follow the rules of natural justice and refused enforcement of his decision. Woods Hardwick had been engaged by Chiltern to provide architectural services in connection with a development in Luton. The development went disastrously wrong from Chiltern's point of view. As it saw the position, Woods Hardwick had failed to provide an accurate survey drawing for the works and thus the building had been set out inaccurately. In consequence the edge of the new building was located on the highway and other major structural features were laid out incorrectly. Woods Hardwick challenged these complaints. It accepted that it had not carried out a full survey but had instead carried out a check survey. They blamed the ill-alignment of the building upon Chiltern's failure to set out the structure properly. Woods Hardwick claimed unpaid fees following a withholding of payment by Chiltern based on its alleged claims against Woods Hardwick. It was a significant feature of the adjudication that Chiltern had not served any appropriate notice to withhold monies under Section 111 of the Housing Grants, Construction and Regeneration Act 1996. They were therefore not entitled to withhold payment otherwise due to Woods Hardwick. Chiltern's principal ground for resisting payment was that the monies claimed were not yet due because the project was incomplete or that any fees that were due for payment fell to be abated by virtue of Woods Hardwick's breaches of contract. His Honour Judge Thornton QC noted that any abatement properly relied on by Chiltern would not be caught by Section 111 of the Act, so Chiltern's abatement defence could in principle defeat or reduce Woods Hardwick's claims. It is refreshing to see Judge Thornton's clear and practical analysis of this aspect of the Act and it is a pity that the Judges of the Technology and Construction Court cannot come to an agreement on this issue. In contradiction to this approach His Honour Judge Bowsher QC said in the case of Whiteways Contractors (Sussex) Limited -v- Impressa Castelli Construction that if such deductions were to be made, notice was to be given in compliance with requirements of the Act. In his view it made no difference whether those deductions were by way of set-off or abatement. Returning to our case, the adjudicator dismissed Chiltern's defences and awarded Woods Hardwick a substantial part of the sums it had claimed. Chiltern refused to pay and on the application for enforcement complained that the adjudicator had lacked impartiality and had conducted the adjudication in breach of the rules of natural justice. It was alleged that the adjudicator had prevented Chiltern from fairly presenting its case and had taken evidence from third parties without allowing Chiltern an opportunity to comment upon that evidence. Moreover Chiltern were incensed that in order to support its application for enforcement, Woods Hardwick had managed to obtain a witness statement from the adjudicator which, according to Chiltern, contained partisan views adverse to Chiltern. The court held that these complaints were justified. The adjudicator had approached other sub-contractors to obtain their views on the capability of Chiltern and had refused to give Chiltern the opportunity to comment upon these opinions. The risk to an adjudicator of taking evidence in such a one-sided way is perhaps obvious. By way of an example, one of the sub-contractors interviewed by the adjudicator informed him that pre-cast concrete sections supplied by it had been correctly manufactured from the dimensioned drawings provided by Woods Hardwick. Unfortunately the adjudicator was not aware that the same sub-contractor had informed Chiltern in writing that these pre-cast sections had been manufactured incorrectly due to inaccurate dimensioned drawings supplied by Woods Hardwick. Judge Thornton concluded that in the context of this adjudication in which so much additional information relied on by the adjudicator had been obtained by the process of telephone interviews with representatives of Woods Hardwick and other sub-contractors, there was a clear breach of the statutory requirements. Judge Thornton concluded that he recognised that the adjudicator had attempted to act in an impartial manner and had shown no conscious bias or hostility to Chiltern. However, the statutory requirement to act impartially required the adjudicator to act in a way that did not lead to a perception of partiality by one party which might objectively be held by that party. The adjudicator's conduct in this adjudication had been such as to give rise to such a perception of partiality.
CJ-0049
|
|||
|
© Brewer Consulting |
|||
 |
|||