Lee v Chartered Properties (Building) Ltd

Under the statutory adjudication scheme, a valid adjudicator’s appointment requires the notice of adjudication to be given to the responding party before the nominating body is asked to appoint an adjudicator.

A dispute may be inferred from the surrounding circumstances. It need not involve an express rejection. Several issues concerning a final account may constitute one dispute where they form part of the same underlying controversy.

The adjudicator must reach the decision within the agreed period and deliver it as soon as possible afterwards. A decision reached in time but delivered unjustifiably late is unenforceable.

The claimant challenged an adjudicator’s decision requiring her to pay sums arising from refurbishment works carried out by the defendant. The defendant had served a statutory demand and sought to enforce the adjudicator’s decision.

The claimant alleged invalid appointment, absence of a crystallised dispute, referral of more than one dispute, settlement of the claims, breach of natural justice and late delivery of the decision. The court determined the legal issues summarily, while recognising factual disputes concerning the appointment and alleged settlement.

1. Appointment. Under Clauses 1 and 2 of the Scheme for Construction Contracts, the referring party must first give written notice of adjudication to the other party. Only then may it request the specified nominating body to appoint an adjudicator. A real factual issue remained as to whether the defendant had applied to the RIBA before communicating its notice. That issue could not be resolved summarily.
2. Crystallised dispute. A dispute may be inferred from what is said or left unsaid in the surrounding circumstances. An express rejection is unnecessary. The final account had been submitted, discussed through the architect and left unresolved for several months. A dispute therefore existed before the notice of adjudication.
3. One dispute. The underlying dispute concerned the final account and related cross-claims. The existence of several issues within that controversy did not convert it into several disputes. A reasonably broad construction was required in the construction adjudication context.
4. Settlement. The May 2009 correspondence raised a triable issue as to whether the parties had reached a binding settlement. The court could not decide that issue merely by analysing the wording of the emails without considering the factual background.
5. Natural justice. The adjudicator had no jurisdiction finally to decide his own jurisdiction, although he could investigate it. The circumstances did not amount to an adjudication ambush or a breach of natural justice. Such a challenge would be exceptional where a recognisable dispute had been referred and the adjudicator had acted in good faith within the applicable timetable.
6. Timing. Paragraph 19 distinguished reaching the decision from delivering it. The parties had agreed an extension for reaching the decision until 13 November 2009. The adjudicator reached it by that date but did not deliver it until 16 November. The unexplained delay meant that it had not been delivered as soon as possible after being reached. It was therefore unenforceable.
7. The claimant succeeded on the late-delivery challenge and established triable issues concerning appointment and settlement.

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