Deluxe Art & Theme Ltd v Beck Interiors Ltd

An adjudicator appointed under the Scheme for Construction Contracts may adjudicate more than one dispute at the same time only with the consent of all parties to those disputes. The requirement applies whether the disputes arise from one adjudication notice or from separate notices. A later appointment made without consent is a nullity and does not invalidate an earlier adjudication for which the adjudicator had jurisdiction. Natural justice challenges based on adjudication timetabling require a proper opportunity to respond and evidence of material prejudice affecting the result.

The claimant sought summary judgment to enforce two adjudication decisions concerning a subcontract for hotel refurbishment works. The first decision concerned extension of time and loss and expense. The second concerned the alleged failure to reduce retention following practical completion.

The same adjudicator dealt with both adjudications concurrently. The defendant objected to the second appointment and alleged that the first decision was also affected by a breach of natural justice arising from late material and uncertainty about payment applications. The issues were whether the references concerned one dispute or two, whether paragraph 8(1) of the Scheme permitted concurrent adjudication without consent, and whether the first adjudication was materially unfair.

1. Separate disputes. The extension-of-time and loss-and-expense claim was separate from the retention claim. The claims were raised in separate notices, concerned different questions, and the first could be decided without deciding the second. The principles stated in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC) supported that conclusion.
2. Jurisdiction under the Scheme. Paragraph 8(1) of the Scheme for Construction Contracts expressly permitted simultaneous adjudication of more than one dispute only with the consent of all parties. The defendant had not consented. The wording applied equally to disputes referred in separate notices. The result differed from Willmott Dixon Housing Ltd v Newlon Housing Trust [2013] EWHC 798 (TCC), because the contractual adjudication rules in that case did not contain the same restriction. Paragraph 8(1) was not ultra vires the Housing and Grants (Construction and Regeneration) Act 1996: the right to adjudicate at any time remained intact, subject to sensible procedural rules.
3. The reasoning in Pring and St Hill Ltd v CJ Hafner [2002] EWHC 1775 (TCC) was directly applicable. The decision in the second adjudication was therefore unenforceable. The adjudicator’s lack of jurisdiction in that later adjudication did not affect his jurisdiction over the first adjudication, which remained enforceable.
4. Natural justice. Timetabling was primarily a matter for the adjudicator. The defendant had been permitted to serve a rejoinder and did so. There was no evidence that further time would have produced material argument or evidence, or that any alleged unfairness affected the outcome. The authorities concerning opportunity to respond and material prejudice, including Balfour Beatty Construction (Northern) Ltd v Modus Corovest (Blackpool) Ltd [2008] EWHC 3029 (TCC), GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2010] EWHC 283 (TCC), Kier Regional (Trading as Wallis) v City in General (Holborn) Ltd [2006] EWHC 848 (TCC) and Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC), were not satisfied.
5. The claim to enforce the first adjudication decision succeeded. The second adjudication decision was unenforceable. Costs were left for agreement or further determination.

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