| Date | 12 October 2005 |
|
|
| Judgment | Palmac Contracting Limited v Park Lane Estates Limited, TCC 22 March 2005 |
|
|
| The Issue | Nomination of an adjudicator. |
|
|
| Implication |
Under
the JCT adjudication rules, the application for the nomination and
appointment of an adjudicator may precede the serving of the notice
of adjudication, whereas under the Scheme, the nomination and appointment
of the adjudicator must follow the notice of adjudication. |
printA constant pre-occupation of philosophers throughout the ages has been which came first, the chicken or the egg? Thankfully, construction adjudicators have to grapple with slightly less taxing matters. For example, what must come first, the notice of adjudication or the nomination/appointment of the adjudicator? Her Honour Judge Frances Kirkham was faced with this question recently in the case of Palmac Contracting v Park Lane Estates. Palmac sought to enforce an adjudicator's decision that Park Lane should pay Palmac approximately £170,000. Park Lane resisted enforcement on a number of grounds, one of which included the submission that the contractual provisions relating to the appointment of the adjudicator were not followed and this deprived the adjudicator of jurisdiction. Park Lane's case was that the contract required the notice of adjudication to be served before Palmac had applied to the Royal Institution of Chartered Surveyors for nomination of an adjudicator. In response Palmac maintained they had in fact served the notice first but that in any event, the contract did not preclude an application being made in advance of the notice of adjudication being served. Further, any defect in the procedure was minimal, not material and caused no prejudice. On the evidence presented to it, the court was not persuaded that the notice had actually been served by Palmac prior to its application to the RICS. It was therefore necessary to look closely at the contract adjudication provisions which were those of the JCT at clause 39A. "The Adjudicator…shall be either an individual agreed by the parties, or on the application of either party, an individual to be nominated as the Adjudicator by… (the RICS). Provided that… where either party has given notice of his intention to refer a dispute or difference to adjudication, then…any application to (the RICS) must be made with the object of securing the appointment of, and the referral of the dispute or difference to, the Adjudicator within 7 days of the date of the notice of intention to refer…". In its defence, Park Lane relied upon the earlier case of IDE Contracting v R G Carter Cambridge. However, Judge Kirkham drew the distinction that the parties in that case were subject to the provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 which expressly provide that following the giving of a notice of adjudication, the referring party shall request the named person to act as adjudicator, or if none is named, then to approach the nominating body. In IDE, the referring party contacted the nominating body before serving the notice and the judge decided that that non-compliance with the Scheme deprived the adjudicator of authority, even though the responding party had suffered no prejudice. As the basis of this decision was the strict interpretation of the Scheme, Judge Kirkham concluded that the IDE case was of little assistance to her. Turning to the JCT clause 39A, Judge Kirkham noted that this clause did not stipulate that an application for nomination of an adjudicator must be made after the notice of adjudication has been given. The word "then" in the clause was used as a stylistic device to link clauses, being used in that way elsewhere in the contract. It was not, according to the Judge, used in this clause 39A in a chronological sense, "that is, it does not mean that a party must first serve a notice then apply to a nominator". She accepted Palmac's argument that the purpose of the clause is to set out a procedure for the appointment of an adjudicator. It does not stipulate that any application for nomination must be made after the notice of adjudication has been served. Support for this view could be drawn from section 108 (2) (b) of the HGCRA 1996, which provides that the contract shall "provide a timetable with the object of securing the appointment of the Adjudicator and referral of the dispute to him within 7 days of such notice". Judge Kirkham also rejected Park Lane's contention that a finding for Palmac would make it easier for a referring party to ambush a responding party by effectively reducing the period of time during which a responding party must respond. In her judgment it would not have the effect of giving more ammunition to those who indulge in ambush adjudication. She observed that section 108 was not prescriptive as to the timing of any nomination but aimed at securing appointment within 7 days of the notice of adjudication. Palmac had relied upon clause 39A.5.6 which stated that, "any failure by either party to comply with…any provision in or requirement under clause 39A shall not invalidate the decision of the Adjudicator". The Judge held that this clause would not validate an appointment invalidly made, its scope being limited to procedural steps within a valid adjudication. In conclusion the court held that Palmac had not gone outside the procedure envisaged by the contract. No prejudice was suffered by Park Lane and the appointment of the Adjudicator was validly made.
CJ-0540
|
|||
|
© Brewer Consulting |
|||
 |
|||