Dean and Dyball Construction Ltd. v Kenneth Grubb Associates Ltd.

In adjudication enforcement proceedings, a dispute may be crystallised even though the amount or detailed composition of the claim changes, where liability has consistently been denied. The enquiry is factual and practical. A notice of adjudication need only comply with the contractual procedure and identify the dispute and redress sought; it need not plead a cause of action or explain in detail how the dispute arose. An adjudicator may receive information from parties separately where the agreed procedure permits it, provided the absent party is told the substance of material communications and has a fair opportunity to respond.

Dean and Dyball Construction Ltd. sought summary judgment to enforce an adjudicator’s decision requiring Kenneth Grubb Associates Ltd. to pay damages arising from defects in the design and operation of a tidal marina gate.

Grubb resisted enforcement on grounds including that the contract was not sufficiently in writing, that there was no valid adjudication agreement, that no crystallised dispute existed, that the adjudicator decided a different dispute or applied the wrong question, and that the procedure was unfair. The court considered the formation and terms of the contract, the contractual adjudication procedure, the parties’ correspondence, the Notice of Adjudication and the conduct of the adjudication.

1. The contract was formed when Grubb accepted by conduct the counter-offer in the 23 August 2000 facsimile. That document incorporated the Proposal Letter and the Association of Consulting Engineers Conditions of Engagement, including clause B9.2. The adjudication agreement therefore arose from the express contractual terms, not from the operation of section 107 of the Housing Grants, Construction and Regeneration Act 1996.

2. The claim was subject to a crystallised dispute. Grubb had consistently denied liability for the gate’s deficiencies. Changes in the quantum or composition of the damages did not destroy the existing dispute where liability itself, and the obligation to pay anything, remained denied. Whether a dispute has crystallised is a question of fact and degree, determined by the nature of the dispute in its circumstances.

3. Under rule 8 of the agreed Construction Industry Council Model Adjudication Procedure, the Notice needed to provide a brief statement of the issue or issues referred and the redress sought. It did not need to disclose a legally complete cause of action, set out every factual detail, or explain precisely when and how the dispute arose. The Notice, read as a whole, sufficiently identified the dispute as liability for the gate’s deficiencies and the damages payable.

4. The Referral Notice did not introduce a different dispute. The general question of whether Grubb was legally responsible encompassed the more specific allegation that it had failed to perform its contractual obligations with reasonable skill, care and diligence. The adjudicator decided the dispute referred and addressed the correct contractual standard.

5. Natural justice required Grubb to be told the substance of any material communication received in its absence and to have an opportunity to respond. It did not necessarily require both parties to be present when evidence was taken. The agreed procedure permitted separate meetings, and the adjudicator circulated notes of the meetings. There was no evidence that he relied on material which Grubb had not been able to answer. The procedure was therefore not unfair.

6. All objections failed. The adjudicator’s decision was enforceable. Judgment was entered for Dean and Dyball in the sum claimed, with interest to be determined after hearing counsel.