Paice & Anor v MJ Harding (t/a Mj Harding Contractors)

An adjudicator’s decision will not be summarily enforced where the circumstances give rise to a real possibility of apparent bias or where the adjudicator arguably decided the same, or substantially the same, dispute as an earlier adjudicator. Material unilateral communications with one party must be disclosed, whether made before, during or after the adjudication, and it is immaterial that the communication was with the adjudicator’s practice manager or occurred some time before the appointment. Waiver of a natural justice challenge requires knowledge of the grounds of challenge and a clear and unequivocal act showing an intention not to rely on them. A later adjudicator cannot trespass on a dispute already decided unless the first decision has been finally displaced.

The claimants sought summary judgment to enforce the fourth adjudication decision, which awarded them £325,484 and adjudicator’s fees. The defendant challenged enforcement on two grounds: apparent bias arising from undisclosed telephone conversations between the claimants and the adjudicator’s practice manager and wife, and lack of jurisdiction because the fourth adjudication allegedly revisited matters decided in the third adjudication.

The third adjudicator had ordered payment of the contractor’s final account because no valid payless notice had been served. The fourth adjudicator then assessed the true value of the account and ordered repayment. An earlier injunction application had been refused, but permission to appeal that decision had been granted. The issues were whether the apparent-bias challenge had been waived and whether there was a sufficient overlap between the two adjudications to prevent summary enforcement.

1. Apparent bias. Applying the fair-minded and informed observer test from In re Medicaments and Related Classes of Goods (No 2) [2001] 1 WLR 700, as approved in Porter v McGill [2002] AC 357, the adjudicator’s failure to disclose the material unilateral conversations created a real possibility of bias. The conversations concerned the earlier adjudications, the contractor’s final account and the claimants’ dissatisfaction with their advisers. They were not limited to procedural matters.
2. The fact that the conversations were with the adjudicator’s practice manager and wife did not avoid the need for disclosure. Nor did the two-month interval before the adjudication. The guidance and authorities, including Glencot Developments & Design Co Ltd v Ben Barrett and Son (Contractors) Ltd [2011] B.L.R 207, Woods Hardwick Ltd v Chiltern Air Conditioning Ltd [2001] B.L.R 23 and Makers UK Ltd v London Borough of Camden [2008] EWHC 1836 (TCC), supported that conclusion. The adjudicator’s misleading denial of contact and trenchant witness statements further strengthened the appearance of bias.
3. Waiver. Under Farrelly (M&E) Building Services Ltd v Byrne Brothers (Formwork) Ltd [2013] EWHC 1186 (TCC), waiver required knowledge of the content giving rise to the natural justice challenge and a clear and unequivocal act inconsistent with reliance on it. The defendant lacked that knowledge and had not waived the challenge.
4. Jurisdiction. The principles summarised in Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC), drawing on Quietfield Ltd v Vascroft Construction Ltd [2007] B.L.R 67 (CoA) and HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 (TCC), required comparison of the terms, scope and extent of the disputes and decisions. The defendant had a reasonable prospect of showing that the fourth adjudication addressed the same or substantially the same dispute as the third. Summary enforcement was therefore refused.

The judgment itself was a first-instance enforcement decision. It recorded that permission to appeal had been granted against the earlier injunction decision, but no appeal decision was before the court.