Cases - Gennaro Maurizio Picardi (t/a Picardi Architects) v Paolo Cuniberti

Record details

Name
Gennaro Maurizio Picardi (t/a Picardi Architects) v Paolo Cuniberti
Date
[2002]
Citation
EWHC 2923
Legislation

Unfair Terms in Consumer Contracts Regulations 1999

Keywords
Adjudication - adjudicator - CIC model adjudication procedure - enforcement - right to adjudicate - unenforceable decision - RIBA - contract administration
Summary

This action arose out of a claim by a firm of architects, Picardi Architects, against Mr and Mrs Cuniberti for fees for the refurbishment of their private dwelling house. This claim was referred to an adjudicator, who decided that Mr and Mrs Cuniberti should pay the outstanding sum of £42,862.19 plus VAT and the adjudicator's fees.

This action was brought by Picardi for a declaration (a) that the contract between the parties included the Construction Industry Council (CIC) model adjudication procedure; and (b) that the adjudicator's decision should be enforced.

It was agreed between the parties that if the contract between the parties does not include provisions relating to adjudication then there is no right to adjudicate, the contract being in relation to a dwelling house.

Cuniberti raised 3 defences to this action:

  1. There was no concluded contract with Picardi.
  2. If there was, insufficient notice was given of the specific and onerous obligations relating to adjudication.
  3. In any event, the clause should be declared of no effect by reason of the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) - the legal basis for which is Directive 93/13EEC on Unfair Terms in Consumer Contracts ('the Directive').

Picardi argued in relation to these 3 points:

  1. Their previous invoices had been paid pursuant to the contract - those invoices referring to the unsigned contract issued to Cuniberti.
  2. Adjudication was neither unusual nor onerous and therefore specific notice was not required.
  3. Adjudication does not hinder the right of either party to take legal action in court, or refer a matter to arbitration. Furthermore, they said that it does not act to the detriment of the consumer, since either party may refer the matter to adjudication.

With regard to point (1), the court concluded that there was no concluded contract between Picardi and Cuniberti that incorporated a right of adjudication. Therefore there was no right to adjudicate and therefore the purported decision of the adjudicator was invalid and unenforceable.

This decision alone was sufficient to dispose of the matter, but the court did go on to give guidance on the two remaining issues.

With regard to point (2), the court concluded that the inclusion of adjudication in consumer contracts that would otherwise be outside the scope of the Act was unusual and therefore did require the supplier to expressly bring such clauses to the attention of the consumer. Picardi had failed to do this, and therefore on this basis his application would have failed had it not failed under point (1) above.

With regard to point (3), the court further concluded that the introduction of adjudication would have introduced a significant imbalance in the parties' rights and obligations to the detriment of the consumer. Therefore if the claimant's application had not failed under points (1) or (2) above it would have failed under point (3).

In coming to this conclusion under point (3), the court was persuaded by the example given in the Directive of an arbitration clause that would give rise to such an imbalance; by the fact that the appointing body was the Royal Institute of British Architects (RIBA); and by the fact that the consumer was deliberately excluded by parliament from the scope of the Act.