REUTERS | David W Cerny

Adjudicator’s wide discretion to set the procedure and timetable unsuccessfully challenged

Only last week I was reading Tony Bingham’s piece in Building on bullying in adjudication, then up pops a case where the judgment (given by HHJ Raeside QC) refers to bullying. I will leave you to read what Tony said in his article and make up your own mind about why parties and their representatives do it and (seemingly) get away with it, and whether we should adopt Tony’s suggestions from the world of football of yellow and red cards, fines for “lambasting the referee” and a code of ethics for party representatives in adjudication. You can also draw your own conclusions about whether it is the same case as Tony’s pink and orange team members were from.

The case, Rydon Maintenance v Affinity Sutton Housing, also throws up several procedural issues worth a mention.

Rydon Maintenance v Affinity Sutton Housing

The dispute between Rydon and Affinity arose out of a contract for maintenance and other minor works carried out by Rydon at a number of properties over a 12-year period (2000 to 2012). The parties initially used a JCT Measured Term Contract 1998 and then changed to the ACA’s Term Partnering Contact (TPC2005).

At some point in 2011 it became apparent to Rydon that it hadn’t invoiced fully for all the work it had done. The judgment doesn’t go into the detail of what happened when the claim was presented but one assumes it didn’t go down too well with Affinity since, in July 2014, Rydon referred the dispute to adjudication (and Tony Bingham was appointed as the adjudicator). By the time the matter came to court earlier this year, something in the region of £2.3 million, including VAT and interest, was said to be due to it.

The CIC model adjudication rules

The parties’ contract referred to the fifth edition of the Construction Industry Council (CIC) model adjudication procedure, which gave the adjudicator complete discretion over the conduct of the adjudication. For example he could:

  • Take the initiative in ascertaining the facts and the law.
  • Use his own knowledge and experience.
  • Meet and question the parties and their representatives.
  • Meet the parties separately.
  • Reach a decision even if a party failed to comply with a request or direction.

As the judgment notes, what was to happen in the adjudication was “largely a matter for the adjudicator to decide”. On the facts, that appears to be precisely what happened and precisely why Affinity argued that the adjudicator’s decision should not be enforced.

Affinity’s allegations of breach of rules of natural justice

Affinity’s allegations that there had been a breach of the rules of natural justice fell into three broad categories, namely that the adjudicator:

  • Failed to follow the appropriate adjudication procedure and adopted his own, different procedure. This included ignoring the parties’ express written agreement for the reply to be followed by a meeting with the parties’ legal teams and experts. This was either outside the scope of his jurisdiction or a breach of the rules of natural justice.
  • Did not conduct the adjudication in a fair and impartial manner and gave the impression of apparent bias. In particular, he:
    • did not give both parties an equal and reasonable opportunity to present their case and deal with the other party’s case;
    • failed to ensure each party was full appraised on the arguments against it and had a reasonable opportunity to comment; and
    • failed to adopt appropriate procedures.
  • Decided the dispute before being in possession of all the relevant evidence and arguments, which was described as being guilty of “apparent pre-determination”.

That is a “kitchen sink” of allegations regarding a breach of the rules of natural justice, if ever I saw one, and has resulted in a long judgment that goes into the events and correspondence in quite some detail. Therefore, it made me smile to see the judge note that one of the witnesses quoted:

“…at great length from various documents… [which] one is encouraged not to do as part of modern litigation”.

In a nutshell, the judge rejected all of Affinity’s allegations and enforced the adjudicator’s decision. Time and time again the judge noted that the adjudicator was entitled to set the procedure and that is what he did. He did not act outside his powers or breach the rules of natural justice.

Meetings with the parties

One specific area of complaint centred on a meeting the adjudicator had with Rydon’s expert to go through the invoices. There was considerable correspondence exchanged about when this meeting was going to take place and who was going to attend but, in the end, no one from Affinity was there because, it said, its legal team was not available (although it could do a meeting five weeks later). As a result, the meeting went ahead without it, and it was recorded. A copy of that recording and a written transcript was provided to Affinity, who was then able to prepare a list of questions for Rydon’s expert to answer.

I don’t envy Tony having a meeting with only one party, irrespective of what the adjudication rules say about it. In my experience, holding a meeting with only one party in attendance has to be a last resort, as they are problematic to organise and it is imperative that a detailed note is kept and distributed to all parties as soon as possible. That is probably why Tony repeatedly urged Affinity to co-operate and attend. It is arguable that having the right to convene a meeting with only party in attendance may actually encourage the other party to attend, but that doesn’t make it any less problematic.

No breach of rules of natural justice

So, all the grounds for challenge failed. The judgment quotes Chadwick LJ from Carillion Construction v Devonport, where he said:

“To seek to challenge the adjudicator’s decision on the ground that he has exceeded his jurisdiction or breached the rules of natural justice (save in the plainest cases) is likely to lead to a substantial waste of time and expense – as, we suspect, the costs incurred in the present case will demonstrate only too clearly.”

Since Affinity instructed three counsel, I suspect Chadwick LJ’s words will be ringing true.

MCMS Ltd Matt Molloy

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