Cases - London & Amsterdam Properties Ltd v Waterman Partnership Ltd
Record details
- Name
- London & Amsterdam Properties Ltd v Waterman Partnership Ltd
- Date
- [2003]; (2004)
- Citation
- EWHC 3059 (TCC); BLR 179; 94 Con LR 154
- Legislation
- Keywords
- Adjudication - adjudicator - enforcement - jurisdiction - decision not binding - referral notice - size of referral notice - natural justice - breach of natural justice
- Summary
-
This action arose out of a claim for professional negligence. L&AP argued that Waterman (a firm of structural engineers) had caused them to incur additional costs of approximately £1.9m due to the late release of steelwork design information.
This led to a substantial period of exchanges of arguments and information between the representatives of the parties, although this focused on liability. Very little information was exchanged as to the actual loss incurred by L&AP as a result of the alleged negligence.
An adjudicator was appointed, and as part of the referral to the adjudicator substantial additional information was provided in relation to quantum particulars.
The adjudicator decided that Waterman should pay L&AP the sum of £659,346.
Shortly after the decision of the adjudicator was made, Waterman applied to the courts for a declaration that the purported decision was not binding because the adjudicator did not have jurisdiction or had exceeded his jurisdiction. Shortly after that application was made, L&AP made an application for summary judgment in the amount of the adjudication award plus the adjudicator's fee.
One argument raised by Waterman was that the contract required the referral notice to be restricted to 20 single sided A4 pages. In fact the referral exceeded 1000 pages. Waterman had objected to the size of the referral during the course of the adjudication and the adjudicator had admitted the first 20 pages as the referral and the balance under his jurisdiction to admit further information. The judge concluded that provided the first 20 pages sufficiently identified the dispute that existed the adjudicator was entitled to regard that as a reference compliant with the contract and the Scheme and thereafter to make directions to receive the additional documentation.
In relation to the quantum information provided during the course of the adjudication, the judge concluded that there was a dispute as to liability and that was sufficient to embrace both the liability and quantum aspects of this large and complex claim. However, in relation to the manner in which additional quantum information was admitted into the adjudication, the court found that the adjudicator had acted in breach of the rules of natural justice and therefore his decision was unenforceable.
The court held that the adjudicator did not appear to have appreciated that in accordance with the rules of natural justice, he should either have excluded late additional information, or should have given the other party a reasonable opportunity of dealing with it. Under the applicable rules the adjudicator was precluded from taking the latter course because L&AP declined to agree to the necessary extension of time; he should therefore have excluded the evidence. In fact, he avoided a decision as to whether or not the evidence should be admitted and then based his decision upon the additional evidence without giving the other party a proper opportunity to deal with it. That was held to be a substantial and relevant breach of natural justice.
It was also alleged that the adjudicator exceeded his jurisdiction by making errors on points of law in deciding that Waterman had been negligent when there was insufficient evidence before him to come to that conclusion; however, the court dismissed that challenge on the basis that if the adjudicator made a decision on the basis of a dispute properly referred, then the court does not have power to interfere with that finding. However, in coming to this conclusion the judge said that these disputes arose at the very end of the contract. A party seeking 'a provisionally final decision' in a complex case such as this and involving professional negligence clearly perceives an advantage in doing so. It is a practice within the letter of the law and within the Act. A review as to the working of the Act in practice is perhaps now timely.
The court refused to award summary judgment, but indicated that mere ambush did not necessarily amount to procedural unfairness. 'Dispute' was to be given its ordinary meaning and included any claim that the other party refused to admit or did not pay, whether or not there was any answer to the claim in fact or in law, following Halki v Sopex. The court also found that there may be cases that are not capable of being adjudicated fairly and impartially under the Scheme for Construction Contracts, for reasons of complexity or the conduct of one of the parties.