Primus Build Ltd v Pompey Centre Ltd & Anor

Contractual notice provisions governing adjudication must be construed according to their wording. Where a clause requires delivery personally to a specified address, actual delivery to an appropriate person may satisfy it, even if the document is sent by post. A mandatory service requirement may nevertheless invalidate the notice and deprive the adjudicator of jurisdiction if it is not met.

An adjudicator must normally give the parties an opportunity to address a material alternative approach which the adjudicator devises, particularly where it relies on material the parties agreed should be ignored. A decision founded on an unheralded calculation, which could have materially affected the result, will not be enforced.

Primus sought enforcement of an adjudicator’s decision awarding it £47,870.91 for loss of profit following the omission of part of construction management works. Pompey challenged enforcement on two grounds.

1. The Notice of Adjudication had been sent by post although the contract specified personal delivery or fax.
2. The adjudicator calculated loss of profit at 1.3% from Primus’s accounts, although neither party had relied on that calculation and both had treated the accounts as irrelevant.

The court considered whether service was contractually valid and whether the adjudicator’s approach deprived Pompey of jurisdiction or breached natural justice.

1. Service. The expression “delivered personally” in clause 26.1 meant actual delivery by an appropriate person to an appropriate person at the address specified in the contract. It did not necessarily mean personal service in the technical sense. The Notice had in fact been received by Pompey’s solicitor, who was an appropriate recipient, so clause 26 had been complied with.
2. The conclusion depended on the unusual contractual wording and the evidence of actual receipt. A clause requiring personal service, or a document which was lost or materially delayed, could produce a different result. Had clause 26 been breached, it was mandatory and the Notice would have been invalid, depriving the adjudicator of jurisdiction. The alleged waiver was not established.
3. Accounts and jurisdiction. Both parties had agreed that Primus’s accounts were irrelevant to the loss-of-profit issue. The adjudicator therefore had no jurisdiction to base his decision on those accounts or on a calculation derived from them.
4. Natural justice. Even if the adjudicator could consider the accounts, he was required to invite submissions before adopting a new calculation of 1.3%. An adjudicator need not consult the parties on every intermediate thought, but must normally do so where he rejects the claim as advanced and devises an alternative basis on which some claim might succeed. That obligation was especially strong because the alternative was derived from material the parties had told him to ignore.
5. The breach was material. The entire award depended on the 1.3% calculation, and submissions about the reliability of the accounts might have changed the outcome. The adjudicator’s decision was therefore not enforced. The court also expressed concern that the costs of the adjudication and enforcement proceedings substantially exceeded the value of the claim.