Camillin Denny Architects Ltd v Adelaide Jones & Co Ltd

An adjudicator’s decision will generally be enforced unless the adjudicator lacked jurisdiction or committed a material breach of natural justice. Where a jurisdictional challenge depends on whether a contract was novated, the court may determine the issue summarily if the defendant has no real prospect of proving an effective novation. A valid adjudication clause survives termination of the underlying contract for the purpose of resolving accrued disputes. A clear, unqualified and fully retrospective novation requires credible evidence that the proposed substitute party agreed to assume the contractual obligations. Complaints that an adjudicator reached an incorrect conclusion on facts, law or costs do not ordinarily establish bias or procedural unfairness.

The claimant, an architectural practice, sought summary judgment to enforce an adjudicator’s decision requiring the defendant to pay unpaid fees, interest, costs and adjudication fees. The defendant contended that the claimant’s contract had been novated to Euro Constructions and alternatively to an individual beneficial owner, so that the adjudicator lacked jurisdiction. It also alleged bias and breach of natural justice in the adjudicator’s treatment of costs.

The court considered whether there was a realistic prospect of proving a retrospective novation, whether the adjudication provisions remained operative, and whether the adjudicator’s decision was unenforceable for jurisdictional or natural justice reasons.

1. Summary judgment. Judgment was entered for the claimant. The defendant had no realistic prospect of establishing that the contract had been novated.
2. The original agreement between the claimant and defendant contained a valid adjudication clause. The discussions about replacing the defendant with Euro Constructions produced, at most, alternative proposals. There was no credible evidence that either proposal had been accepted, signed or otherwise agreed by the proposed substitute. Continuing negotiations about fees and services strongly indicated that no completed novation had occurred.
3. A clear, unqualified and fully retrospective novation would make the new party the party entitled or liable to adjudicate. On the evidence, however, the defendant remained responsible under the original contract. Invoices sent to Euro Constructions were neutral because the defendant had asked for that course. There was also no evidential basis for treating the beneficial owner personally as the contractual counterparty; the corporate veil would not ordinarily be lifted for that purpose.
4. The adjudicator had jurisdiction to determine the dispute. Even if the underlying contract had ended, its adjudication and arbitration provisions survived for the resolution of disputes. The court treated the defendant’s challenge as a factual jurisdictional challenge suitable for summary determination under Civil Procedure Rules 1998 Part 24.2.
5. The court rejected the bias and natural justice challenge. The adjudicator had considered the parties’ costs submissions, identified the claimant as the overall successful party, considered the settlement offer and exercised a costs discretion. An allegedly incorrect decision on facts, law or costs did not amount to actual or apparent bias or a material procedural failure.
6. The claimant was awarded the sums due under the adjudicator’s decision, interest, and costs assessed at £8,000. Payment was ordered within 14 days.