Bovis Lend Lease Ltd v The Trustees of the London Clinic

For adjudication purposes, a dispute generally crystallises when a claim is not admitted. Whether that has occurred depends on the claim, the contractual machinery and the surrounding history. A request for further information may form part of a substantive defence and does not necessarily prevent crystallisation.

Once a dispute exists, later evidence supporting or opposing the claim does not necessarily alter the scope of the referred dispute. A claim that it is not valid or established under the contract is itself ordinarily part of the dispute under a broadly construed adjudication clause. A material breach of natural justice is required to resist enforcement. An alleged adjudication ambush, without more, is insufficient, particularly where the responding party received requested extensions and did not complain during the adjudication.

Bovis sought summary judgment to enforce an adjudicator’s decision awarding it approximately £4.17 million under a building contract for redevelopment works. The award concerned extension of time, repayment of liquidated damages, and loss and expense arising from delay and disruption.

The Trustees challenged the adjudicator’s jurisdiction over the loss and expense claim, contending that the claim had not crystallised before the adjudication. They also alleged that the volume of new evidence and the adjudication timetable denied them a fair opportunity to respond. The court considered whether there was a crystallised dispute, whether the adjudication involved a material breach of natural justice, and whether any part of the decision could be severed.

1. Jurisdiction. The adjudicator had jurisdiction over the whole referred dispute. By March 2007 there was plainly a dispute about extensions of time and liquidated damages. The first report of Mr Wort, served in late 2006, also contained a claim for loss and expense, albeit based on estimated figures. Those claims were not accepted by the Clinic and its professional advisers.
2. The later claim in July and August 2008 was an updated presentation of the existing dispute. The Clinic’s letter of 18 August 2008, read objectively and in context, rejected the claims as insufficiently supported and asserted that no valid application had been made under clause 26. Those matters were substantive defences and formed part of the dispute. The fact that further information was requested did not prevent crystallisation. A broadly construed adjudication clause was not limited to claims ultimately shown to be valid under the contract.
3. Natural justice. The common law requires prior notice and an effective opportunity to make representations. Any breach must be material. The Clinic did not complain during the adjudication that it lacked sufficient time, requested further time only once, and received the extension sought. Its response and rejoinder showed detailed engagement with the claims, and a full-day hearing addressed the principal delay issues. There was therefore no material breach of natural justice. Even if the presentation amounted to an ambush, that did not itself invalidate the adjudication.
4. Severability. The issue did not arise because the adjudicator had jurisdiction and complied with natural justice. If necessary, the court would have regarded the decision as severable between the extension of time and liquidated damages issues and the loss and expense claim, subject to the practical separability of the decision and any difficulty concerning unapportioned adjudicator’s fees.
5. Bovis’s application for summary judgment succeeded, and the adjudicator’s decision was ordered to be enforced.

First-instance decision. No prior appellate decision is stated in the judgment.