REUTERS | Bob Strong

Notice of adjudication held to be valid despite “defects”

I must admit that when I read Carr J’s judgment in University of Brighton v Dovehouse Interiors, I was a little surprised at her findings on the various service points that the University had raised to challenge enforcement of the adjudicator’s decision. However, I was less surprised by the conclusion that the adjudication was commenced when the notice of adjudication was given. Although the court was specifically looking at the saving provision in clause 1.9.2 of the JCT Intermediate Building Contract (ICD), I must admit I’d always thought it was the notice that set the adjudication ball rolling.

University of Brighton v Dovehouse Interiors

Briefly, the relevant facts are as follows:

  • Dovehouse (the contractor) was engaged by the University (the employer) to carry out the fit out of certain campus buildings in Hastings.
  • The works were due to complete in July 2012, although practical completion was not achieved until October 2012.
  • The final certificate, issued in December 2013, valued the works at £2.09 million (the contract value was £2.55 million), and the contractor claimed £3.6 million.

Given the parties were over £1.6 million apart, it’s not hard to see that a dispute was likely. Here, the contract provided for disputes or differences to be referred to adjudication under the Scheme for Construction Contracts 1998, with the adjudicator appointed by the adjudicator nominating body (ANB) specified in the contract particulars (the president or vice-president of the Chartered Institute of Arbitrators (CIArb)).

An added layer of complexity was the contract’s conclusivity clause (clause 1.9.2), which meant that a dispute had to be referred (to court, arbitration or adjudication) within 28 days of the final certificate. As the parties obviously recognised that that was an insufficient period of time to try and negotiate, they agreed an extension to 66 days, which expired on Valentine’s Day 2014. In terms of the saving provision, James Clarke has already considered that point in detail. He acted for the employer and was name-checked in the judgment, having provided two witness statements in the enforcement proceedings.

Serving the notice of adjudication

As is often the case, the dispute was referred to adjudication at the eleventh hour:

  • On 13 February, the contractor’s representative served the notice of adjudication on the employer, not at the address stated in the contract for service, but at another address, one the parties had been using during the project.
  • The notice said the contract was silent on who the ANB was, so named RICS as the ANB and an application duly followed.
  • RICS appointed an adjudicator who, when he got the referral, resigned for jurisdictional reasons.

By now Valentine’s Day had come and gone, roses were wilting and cards consigned to the recycling bin. It was 21 February. The deadline for the conclusivity clause had passed and the first adjudication had floundered for jurisdictional reasons. Undetered, on 24 February, the contactor served a second notice and, mindful of the jurisdicational issues with the first notice, corrected the error regarding the ANB (the judgment doesn’t say where it was served).

At this stage, I’m sure most people would probably think that because of the obvious defects with the first notice, perhaps the saving provision hadn’t “saved” the contractor after all. Not so said Carr J. The first notice had been sufficient – the saving provisio had been triggered and the “defects” in service (if they were defects) did not invalidate it:

  • The failure to refer in the notice to the contract address was a technical failure rather than a fundamental breach. The purpose of the notice was to inform the employer that there was a dispute and to define it. Both of those purposes were achieved.
  • The Scheme for Construction Contracts 1998 does not specify where a notice should be served, therefore serving it at an address other than the contract address did not invalidate it.
  • There was no obligation to include details of the ANB in the notice, therefore naming the wrong ANB did not invalidate it.

I’m sure I could write a lot about these points (and I’m sure others will), but I think the fundamental issue is that if the contractor had not done any of this, the issue would not have arisen in the first place. Parties need to get their house in order before they start this process and check the contract carefully. Carr J quoted Coulson J in her judgment and what better way to end than to remind everyone of the importance of the notice:

“It is impossible to over-emphasise the importance of the notice of adjudication. It is the cornerstone of both the adjudicator’s jurisdiction and the scope and limit of the referring party’s claim in the adjudication… the notice must identify carefully the dispute and the nature of the redress sought. Numerous problems in adjudication and adjudication enforcement have arisen out of the referring party’s failure to provide an adequate notice of adjudication, and his subsequent attempts to make good that omission in the referral notice and other documents served in the adjudication. The courts have made it plain that this is not a legitimate approach…”

Share this post on: