BDW Trading Limited v Ardmore Construction Limited

For adjudication purposes, a dispute generally crystallises once it can reasonably be inferred that a claim is not admitted. The court should identify the essential claim and avoid an overly legalistic analysis. Lack of particularisation does not ordinarily prevent crystallisation.

The expression “a dispute arising under the contract” in section 108(1) of the Housing Grants, Construction and Regeneration Act 1996 should generally receive a broad construction. The Fiona Trust approach applies by analogy to adjudication provisions unless clear language indicates otherwise.

An adjudication decision will be unenforceable for breach of natural justice only where the adjudicator failed deliberately to address a material issue and the failure had a potentially significant effect on the result. Errors of fact, law or reasoning do not ordinarily justify refusing enforcement.

BDW Trading Limited applied for summary judgment to enforce an adjudicator’s decision requiring Ardmore Construction Limited to pay £14,454,914.45 in damages and £84,329 in adjudicator’s costs and expenses.

The adjudicator had found breaches of the Building Contract, deliberate concealment for limitation purposes, and liability under section 1(1) of the Defective Premises Act 1972 in relation to fire-safety defects. Ardmore resisted enforcement on four grounds: lack of crystallisation, lack of jurisdiction over the statutory claim, procedural unfairness arising from inequality of documentation, and deliberate failure to consider a defence concerning imputed knowledge.

The central issues were whether the dispute had crystallised, whether “under the contract” encompassed the DPA claim, and whether any natural justice breach was sufficiently material to prevent enforcement.

1. Summary judgment granted. Ardmore had no real prospect of resisting enforcement on any ground and there was no compelling reason for a trial. Judgment was entered for BDW for £14,539,243.45, together with interest and costs.
2. Crystallisation. The essential claim had been identified in the 2022 Letter of Claim as involving fire-safety defects and breaches of contractual and statutory obligations. Later particulars and documents did not fundamentally change that claim. Ardmore’s continued refusal to investigate or respond, followed by its non-admission of 20 March 2024, objectively established a dispute. The claim was not so nebulous that Ardmore could not sensibly respond. The time between the 8 March letter and the Notice of Adjudication was sufficient to crystallise any remaining quantum dispute.
3. Jurisdiction. The Fiona Trust principle applied by analogy to adjudication provisions. The words “under the contract” did not require a narrow construction merely because adjudication was statutorily underpinned. Parties are presumed to intend disputes arising from their contractual relationship to be determined by the same tribunal unless clear language excludes them. The different wording of the arbitration clause did not demonstrate a narrower adjudication jurisdiction. The DPA claim was therefore within Article 5 and section 108(1) of the HGCRA 1996. Clause 2.5.2 also reinforced that conclusion by incorporating “like liability” under the DPA into the contractual liability regime.
4. Natural justice. Adjudication is a rough and ready process, and enforcement is not refused for procedural, factual or legal errors. The court should scrutinise natural justice complaints sceptically. The Adjudicator had considered the documentation, directed BDW to provide four categories of documents requested by Ardmore, and received further disclosure. Ardmore identified no further required categories during the adjudication and had itself failed to investigate promptly or inspect the Development.
5. The relevant materiality threshold was at least a potentially significant effect on the outcome, meaning an effect decisive or of considerable potential importance rather than peripheral. Ardmore’s evidence that further documents might have provided a compelling defence was speculative and did not meet that threshold.
6. The alleged defence based on BPCL’s or its agents’ knowledge had not been squarely raised, was absent from the agreed issues, and could not found a natural justice challenge. The complaint was in substance an attack on the Adjudicator’s reasoning.