Cubitt Building & Interiors Ltd v Fleetglade Ltd

Where a construction contract contains adjudication provisions complying with the Housing Grants Construction and Regeneration Act 1996, the express contractual machinery governs. A contractual seven-day timetable may be mandatory, but it must be applied sensibly and commercially. If an adjudicator is appointed late on the seventh day, a referral served immediately on the following day may comply, particularly where the delay was outside the referring party’s control. An adjudicator must complete the decision within the agreed period and communicate it forthwith. Completion and communication are separate stages. A short communication delay will not necessarily invalidate a decision completed in time. A fee lien cannot postpone communication or confer jurisdiction where no valid referral exists.

Cubitt applied for summary judgment declaring that the adjudicator had been validly appointed and had jurisdiction under the JCT contract. Fleetglade argued that the referral notice was out of time because the adjudicator was appointed late on the seventh day after the adjudication notice. It also argued that the adjudicator’s decision was invalid because it was communicated after the agreed extended deadline and had been withheld pending payment of fees. Cubitt sought enforcement of the decision, which awarded it approximately £600,000. The central issues were whether the referral complied with clause 41A and whether the decision had been completed and communicated within the contractual timetable.

The application succeeded. The referral notice was valid and the adjudicator’s decision was enforceable.

1. Contractual scheme. Where the contractual adjudication provisions comply with section 108 of the Housing Grants Construction and Regeneration Act 1996, the court must focus primarily on the express contractual provisions. The Act does not require the court to import the CPR wholesale into the adjudication process.
2. Referral notice. Clause 41A.4.1 used mandatory language. The seven-day timetable was therefore not discretionary. Nevertheless, the clause had to be operated sensibly and commercially. Appointment at 5.35 pm on the seventh day, following delay by the nominating body, made immediate service with twelve files impracticable. Cubitt had offered the referral notice that evening and served the complete documents the next day. Service on day eight complied with the clause and did not invalidate the referral.
3. Procedural saving clause. Clause 41A.5.6 provided procedural relief within a valid adjudication. It could not confer jurisdiction on an adjudicator or cure an invalid referral notice. This conclusion was unnecessary to the result but was stated for guidance.
4. Decision deadline. The process had two stages: completion of the decision within 28 days or the agreed extension, followed by communication forthwith. A decision completed within time could remain valid despite a short delay in communication. The decision was completed on 24 November. Its electronic communication approximately twelve and a half hours later was forthwith in the circumstances.
5. Fee lien and order. The adjudicator had no right to withhold communication pending payment of fees. A fee arrangement could not impede the adjudication timetable. The adjudicator’s mistaken reliance on a lien did not justify invalidating a decision completed within time. The court granted the declaration and enforced the adjudicator’s decision.