London & Amsterdam Properties Ltd v Waterman Partnership Ltd

In construction adjudication, “dispute” has its ordinary meaning. A claim may constitute a dispute once it has been rejected or not paid, without importing an exhaustive set of additional requirements. However, adjudication must still comply with natural justice. A referring party cannot deliberately withhold material evidence, deploy it for the first time during the adjudication, and deny the respondent a reasonable opportunity to answer it. A breach is material where the adjudicator relies on the late evidence on a central issue. An adjudicator’s error of law or fact concerning a dispute within the reference ordinarily does not deprive the adjudicator of jurisdiction or invalidate the decision. The decision remains provisionally binding, subject to final determination by litigation, arbitration or agreement.

The claimant sought to enforce an adjudicator’s decision requiring the defendant structural engineers to pay sums said to represent losses caused by late design information on a completed shopping-centre project. The defendant applied under CPR Part 8 for a declaration that the decision was not binding and the claimant applied under CPR Part 24 for summary judgment.

The defendant challenged the adjudicator’s appointment, prior knowledge, the form of the referral, the existence and scope of the dispute, procedural fairness, and alleged errors concerning professional negligence. The central issues were whether a dispute existed, whether the adjudication had been conducted fairly, and whether any error of law affected jurisdiction.

1. Summary judgment refused. The claimant’s Part 24 application was refused. The court did not finally determine the Part 8 claim because further evidence might be required.
2. Appointment and fees. The adjudicator’s proposed hourly basis was consistent with paragraph 25 of the Scheme and did not invalidate his appointment. His previous adjudication did not establish bias. An adjudicator who possesses relevant information from an earlier matter must disclose it, or recuse himself if confidentiality prevents disclosure. The adjudicator stated that he had no relevant knowledge, and there was no credible evidence to contradict him.
3. Referral notice. Although the referral materials substantially exceeded the contractual page limit, the 17-page referral notice itself sufficiently identified the dispute. It therefore founded jurisdiction. The adjudicator could receive supporting documents under paragraph 13(A) of the Scheme and give directions controlling the material placed before him.
4. Dispute. The ordinary meaning of “dispute” in Housing Grants, Construction and Regeneration Act 1996, section 108, applied equally to adjudication and arbitration. The liability issue plainly constituted a dispute. Even if the wider approach requiring an opportunity to consider and respond were applied, the circumstances were sufficient to establish a dispute embracing liability and quantum.
5. Natural justice. The claimant had deliberately withheld material quantum information requested months earlier. It served substantial new evidence with its reply, then refused the extension necessary for the defendant’s expert to address it. The adjudicator neither excluded the evidence nor gave the defendant a fair opportunity to answer it, but relied on it in finding that the settlement payments were reasonable. That was a substantial breach of natural justice affecting a central issue. Complex post-completion disputes involving professional negligence may be unsuitable for adjudication within the Scheme’s timetable.
6. Errors of law. The authorities beginning with Macob Civil Engineering Ltd v Morrison Construction Ltd and confirmed by the Court of Appeal establish that an error of law or fact by an adjudicator, in a dispute properly referred, ordinarily remains enforceable. The court was bound by Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd and could not interfere merely because the adjudicator may have wrongly assessed professional negligence. The decision was nevertheless vulnerable because of the separate, material natural-justice breach.