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EDITORS COMMENTS
The 2020 London Adjudication & Arbitration
Conference takes place on the 20 August in
central London. If you would like to attend,
speak, support, sponsor or exhibit please get
in touch to express your interest.
The next opportunity we have to network is at
the SCL Bristol lunch. We have taken a table at
the SCL Bristol Lunch on the 11 October 2019,
although the event is a sell-out, we still have
places available on the table. If you’d like to
attend the cost is £62.50 + VAT. Please
contact me on my work email if you would
like to attend and I’ll provide an invoice and
bank details for payment.
The Adjudication Society Annual conference
takes place on the 7 November 2019 I do
hope that our panellists will be able to attend
the conference. I am hoping that we can meet
up after for an informal dinner and welcome
suggestions as to restaurants close to the
venue.
UK Adjudicators are a supporting organisation
for the Dispute Resolution Board Conference
that takes place in Cape Town, South Africa in
May 2020. If you can attend; this is an
excellent networking and knowledge sharing
event for those interested in Dispute Boards
and being a Dispute Board Member.
We are holding the 2020 Edinburgh
Adjudication & Arbitration Conference in
Edinburgh on Friday the 7th
March and
welcome expressions of interest to attend,
speak, support, sponsor or exhibit.
As always, I would encourage you to forward
articles, commentaries, news and events that
our readers would find of interest and share
details of our panel and nomination service
with friends, colleagues and clients.
We will be taking a table at the SCL London
lunch again on the 7 February 2020 and will
release details nearer the time.
Sean Gibbs LLB(Hons) MICE LLM FCIOB FRICS
FCIARB, is a director with Hanscomb
Intercontinental and is available to serve as an
arbitrator, adjudicator, mediator, quantum
expert and dispute board member.
sean.gibbs@hanscombintercontinental.co.uk
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ADJUDICATOR TO CONSIDER SET-
OFF AS A VALID DEFENCE TO A
PAYMENT CLAIM UNDER THE NT
SOP ACT
The NT Court of Appeal in a joint judgment
dismissed an appeal in relation to a security of
payment determination being rendered void
due to jurisdictional error (James Engineering
Pty Ltd v ABB Australia Pty Ltd & Anor [2019]
NTCA 7). The judgment provides useful
guidance on the NT Act and its differences
from the East Coast model Acts.
The relevant contract was for the design,
manufacture, transport and delivery of
modular switch rooms for the Ichthys
Onshore LNG Facilities project in Darwin.
James served a payment claim for $2.1m, to
which ABB responded indicating it proposed
to pay $0, for reasons including that ABB
claimed a set off for liquidated damages of
$1.7m against James. James referred it for
adjudication under the Construction Contracts
(Security of Payments) Act (NT) (NT Act). The
adjudicator awarded $1.5m to James, with no
allowance for the set off claimed by ABB.
ABB successfully challenged the adjudication
determination in the NT Supreme Court. The
determination was set aside for jurisdictional
error, essentially because of the adjudicator’s
failure to deal with the merits of ABB's
claimed set-off, which had been raised as a
"shield and not a sword" to the payment
claim.
James appealed; however, the Court
dismissed the three grounds of appeal against
Justice Kelly’s judgment. It dealt rapidly with
the first of these – that the trial judge
concluded the case on a basis not put to her
Honour. The disposition of the two other
grounds provides useful guidance, especially
about the scope of jurisdictional error under
the NT Act:
•The Court upheld Justice Kelly’s finding at
trial that the adjudicator had misstated the
legal position under the NT Act by referring to
the ability of ABB (as respondent) to apply the
liquidated damages in response to the
payment claim in the payment schedule. The
Court pointed out that unlike in the East Coast
model security of payment Acts (i.e. NSW,
QLD and VIC which impose strict
requirements in relation to responding to a
payment claim e.g. certain particulars must be
pleaded in the initial payment claim /
payment schedule stages, otherwise they may
be precluded from being relied upon in an
adjudication response), the NT Act does not
refer to or require a "payment schedule" and
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expressly requires the adjudicator to take into
account the adjudication response served
under section 29 of the NT Act. As a
consequence, the adjudicator fell into
jurisdictional error by failing to take into
account ABB’s response, including the merits
of any counterclaim or set off in reaching his
determination.
•The Court also upheld the finding that, by
failing to determine the merits of ABB’s set-
off claim, the adjudicator had not discharged
the requirement to make (at least) a bona fide
attempt to determine the matter before him
(namely to determine on the balance of
probabilities whether there was actually an
amount owing by ABB to James, and if so,
how much on the basis of the application and
response). The Court agreed with ABB's
submission that the adjudicator wrongly
decided that ABB's claim to set off liquidated
damages fell outside the payment dispute he
was obliged to determine. By refusing to
consider the set-off claim as part of the
payment dispute, this failure was a
jurisdictional error and was “material” as, if
the adjudicator had taken the set-off into
account, the adjudicator “could have made a
different decision”.
Contributing authors:
Sergio Capelli, Frank Bannon, Dale Brackin
THE ENFORCEABILITY OF AN
ADJUDICATOR’S DECISION IN
SOUTH AFRICA
Any dispute between an employer and
contractor will generally have to first be
referred to an adjudicator. The adjudicator
bases his decision on documentation and on
his own knowledge and expertise.[1]
Occasionally a hearing of oral evidence will
take place.
In the recent case of Ekurhuleni West College
[2] the court pointed out that the very nature
of the adjudication process is sui generis in
the sense that the adjudication process is not
governed by any statutory provision or the
common law. As a result of the adjudication
procedure being unregulated by statute,
many cases have come before the courts
regarding whether the determination of an
adjudicator is binding and enforceable as an
interim obligation pending the finalisation of
an arbitration award.
“The courts are of the opinion that as long as
the adjudicator acted generally in accordance
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to the usual rules of natural justice and
without bias and within his terms of
reference, the adjudicator’s decision should
be enforceable.” [3] The Ekurhuleni West
College has been referred to the Supreme
Court of Appeals (SCA) where Nupen Staude
de Vries is representing Trencon Construction
(Pty) Ltd.
The judgment in the Ekurhuleni West College
matter is supported in the case of Stefanutti
Stocks (Pty) v S Property [4], clause 40 of the
building agreement provided that “an
adjudicators decision shall be binding on the
parties who shall give effect to it without
delay unless and until revised by an
arbitrator…should a notice of dissatisfaction
not be given the adjudicator’s decision will be
final and binding.” In this case, the
Respondent (S8 Property (Pty) Ltd) refused to
pay the amounts owing ordered by the
adjudicator on the basis that a notice of
dissatisfaction was filed and the matter was
not finalised because it was referred to
arbitration. The court held that the
adjudication decision is binding but of an
interim nature (the obligation to perform in
terms of the decision is final). In instances
where no notice of dissatisfaction is given the
decision accordingly becomes final and
binding, in finality.
Similarly, in the case of Tubular Holdings (Pty)
v DBT Technologies (Pty) Ltd [5], the court
held that a dissatisfied party must still comply
promptly with the adjudicator’s
determination, notwithstanding the party’s
delivery of a notice of dissatisfaction. The
notice preserves the party’s right to require
arbitration but does not affect the binding
nature of the adjudicator’s determination.
With regard to the performance of obligations
under the adjudicator’s decision the court in
Esor Africa (Pty) Ltd / Franki Africa (Pty) Ltd JV
v Bombela Civils JV (Pty) Ltd [6]held that
“[t]he DAB decision is not final but the
obligation to make payment or otherwise
perform under it is. In the most elementary
way, the DAB process ensures the interim
solution of an issue which requires
performance and requires that the decision is
implemented. The parties’ position may be
altered by the outcome of the eventual
arbitration which is a lengthier process and
there may be a refund ordered of monies paid
or an interest readjustment if too little was
decided by the DAB”
In the case of Bombardier Africa Alliance
Consortium v Passenger Rail Agency of South
Africa [7] the court made specific reference to
the benchmark case of Tubular Holdings and
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Esor Africa in their reasoning. The court in
Bombardier re-emphasised that “if the
decision in the adjudication cannot be
enforced pending the final determination of
the matter in arbitration, the purpose of the
adjudication becomes undermined.”
In relation to the jurisdiction of the
adjudicator, the court in the Ekurhuleni made
reference to the jurisdiction of an adjudicator
and held in paragraph 35 bearing reference to
the C & B Scene Concept Design [8] case that
“it therefore appears that the enforcement of
an adjudicator’s decision cannot be prevented
whether it was caused by errors of procedure,
fact, or law, unless the adjudicator has
purported to decide matters which were not
referred to him.”
Although there is an ongoing legal debate on
this point, the courts have to date enforced
the determination of an adjudicator’s decision
as binding, notwithstanding the finalisation of
the dispute being referred to arbitration.
There are however certain situations where a
party can resist enforcement.
Authors: Sanjeevani Maharaj (Associate) &
Cameron Staude (Director)
[1] McKenzie’s Law of Building and Engineering Contracts and
Arbitration (Seventh Edition) at page 246.
[2] Ekurhuleni West College v Segal and Another (26624/2017)
[2018] ZAGGPPHC 662.
[3] Ibid at paragraph 44.
[4] 2013 JDR 2441 (GSI).
[5] 2014(1) SA 224 (GSJ).
[6] (12/7442) [2013] ZAGPJHC 407 at paragraph 11.
[7] (65099/2017) [2018] ZAGPPHC 413 at paragraph 27.
[8] (2002) EWCA Civ 46; 2002 BLR 93 TCC.
CAMERON STAUDE Director
M: 083 380 6818 T: (010) 880 3285
E: staude@nsdv.co.za
18 Hurlingham Road, Illovo, Sandton 2193
www.nsdvinc.co.za
THE RELEVANCE OF THE “PRIMARY
ACTIVITY” OF A SITE TO
ADJUDICATION
Most commercial construction contracts are
subject to adjudication, even if the contract is
silent on that issue.
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But there are exceptions. One such exception
is where the works being carried out are not
“construction operations” as defined in
section 105 of the Housing Grants,
Construction and Regeneration Act 1996 as
amended (“the Construction Act”).
Section 105 of the Construction Act excludes
from the definition of construction
operations, amongst other things, “assembly,
installation or demolition of plant or
machinery, or erection or demolition of steel
work for the purposes of supporting or
providing access to plant or machinery, on a
site where the primary activity is… nuclear
processing, power generation or water or
effluent treatment.”
When is a construction operation, not a
construction operation?
This “primary activity” issue was the focus of
the court's attention in the case of Engie
Fabricom UK Ltd v MW High Tech Projects UK
Ltd. In that case, MW was the main contractor
for a fluidised bed gasification power plant,
which involved the disposal of waste by
power generation (a waste to energy project).
In this case the parties agreed that under their
contract they had the right to adjudicate, “to
the extent permitted by and consistent with
the provisions of the Construction Act.”
Engie commenced an adjudication against
MW for non-payment and won. It was
awarded circa £27,000.
MW did not pay. So Engie commenced court
proceedings, seeking to enforce the decision
by way of summary judgment in the usual
way.
MW said that the adjudicator did not have
jurisdiction because there was no right to
adjudicate. It said the works in question were
not “construction operations” because the
primary activity of the site was the generation
of power. This was therefore caught by the
exception at section 105 of the Construction
Act.
By contrast, Engie said that the primary
activity was not power generation, but rather
the disposal and thermal treatment of waste
by incineration. The generation of power from
the disposal of that waste was a secondary
activity. As a result, it said the adjudicator did
have jurisdiction and so his decision should be
enforced.
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Bigger issues at stake
Both parties put forward detailed arguments
before the court. They were each represented
by Queen’s Counsel (QCs), as well as junior
counsel, so it must be assumed that there
were bigger issues at stake than just the sum
of £27,000 awarded to Engie. It is likely that
Engie had in mind subsequent adjudications.
There was not time to deal with both parties’
arguments at the half day court hearing, so
they were given permission to make further
submissions after the hearing.
In its further submission MW said the case
was not suitable for summary judgment, that
expert evidence may be required and that a
full trial would be beneficial.
As confirmed by the judge by reference to the
court rules, to defeat an application for
summary judgment the defendant must show
that it has a “real” prospect of success in
defeating the claim. That is, not just a
“fanciful” chance of success.
As the judge noted, because this was a
summary judgment application by Engie, MW
did not have to show that its arguments were
correct, just that it had a “real” prospect of
doing so.
Realistic prospect of success can defeat
summary judgment enforcement of an
adjudicator's decision
The judge found that MW did have a real
prospect of being able to establish that the
primary activity of the site was power
generation, which if proved would mean that
the adjudicator did not have jurisdiction,
which would render his decision
unenforceable. In addition, he said the court
did not have all the evidence before it, and
the parties had not had an adequate
opportunity to address the issues.
As a further tactical move, MW offered to pay
the entire sum claimed into court, pending
the outcome of the court’s determination of
the issue. As a result of the above, the judge
refused to grant summary judgment to Engie,
on condition that MW paid the above sum
into court.
Contract should have been clearer on
adjudication
There are two main lessons to be learned
from this case. First, the arguments and
therefore the costs over whether the parties
could adjudicate could have been avoided if
this had been made clear in the contract.
Second, Engie may have been able to avoid
this outcome if it had taken a different
approach to enforcing the decision. Applying
for summary judgment is the quickest
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approach, but the test for defeating an
application for summary judgment carries
with it risk for the claiming party. Had Engie
instead taken the route of seeking a
declaration from the court, such as whether
the adjudicator had jurisdiction by reference
to the primary activity of the site, it may have
avoided this outcome.
Stuart Thwaites, Legal Director
Construction and Engineering Department
E: stuart.thwaites@wrighthassall.co.uk
ADJUDICATION PUPILLAGE - DICKIE
& MOORE LTD V MCLEISH AND
OTHERS [2019] CSOH 71
The Scottish Courts have provided an
opportunity for those considering offering
pupillage to aspiring adjudicator’s to ensure
that the pupil’s involvement does not lead to
a breach of natural justice nor use of an
adjudicator appointed expert without the
permission of the parties.
The case before the court was concerning
enforcement of an adjudicator’s decision. The
well known adjudicator; Len Bunton had
issued his decision on the 15 March 2019. He
held that the pursuers were entitled to
payment of £324,492.60, with interest of
£16,733.59. The adjudicator found the
pursuer entitled to a further extension of time
of 11 weeks; and in relation thereto he
allowed a sum of £63,093.47 by way of loss
and expense. He held that the Works Final
Account should be £181,607.17 higher (ie the
Bills of Quantities total was increased by
£40,214.90, the total for Architect’s
Instructions by £62,726.64, and the total for
other variations by £78,665.63). He found that
the Employer had not been justified in
deducting (i) £5,019.80 in respect of an
alleged defect (per AI 29); (ii) liquidated
damages of £26,000; (iii) £28,977 for ground
retention; (iv) £11,901.52 for render to the
main house. He determined that some of the
other deductions which had been made were
excessive: the appropriate deduction for
externals ought to have been £25,000 rather
than £58,430.32, and the deduction for MVHR
ought to have been £1,950 rather than
£4,470. He found the pursuer entitled to
interest of £16,733.59. He found the parties
jointly and severally liable for his fees and
expenses, but also ordered that each party
should pay half of them.
Of interest to pupillage was the ground of
resistance where a breach of natural was
alleged due to the the involvement of the
pupil. The relevant parts of the judgement
said:
(iii) Was there a material breach of natural
justice?
Introduction
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[26] This complaint relates to Torquil Murray’s
involvement in the adjudication. Mr Murray is
a quantity surveyor and claims consultant.
With a view to obtaining adjudication
experience he acted as Mr Bunton’s pupil. The
parties were made aware of this role at the
time and neither objected to it. However, they
were not informed until the adjudicator issued
his fee-note that Mr Murray also provided
other assistance to Mr Bunton during the
adjudication, for which he was to be
remunerated.
Matters agreed in the joint minute
[27] The following matters were agreed:
“35. Mr Torquil Murray is a quantity surveyor
who works as a claims consultant.
36. As the parties were aware at the time, Mr
Murray participated in the adjudication as the
adjudicator’s pupil; he was seeking to gain
experience of the adjudication process; he
assisted with the administration of the
adjudication.
37. Mr Murray also proof read the Decision
before it was issued.
38. As part of his pupillage process, Mr
Murray considered his own conclusions in
relation to aspects of the adjudication.
39. Mr Murray produced his own conclusions
on the crystallisation issue.
40. Mr Murray issued his conclusions on the
jurisdiction issue to the adjudicator on 27
February and 5 March 2019.
41. The adjudicator asked Mr Murray to
produce his (Mr Murray’s) own conclusions on
the Extension of Time elements of the claim.
42. Mr Murray reviewed and considered the
relevant adjudication papers as part of his
preparation of his own conclusions.”
The evidence
[28] Mr Bunton is a very experienced
adjudicator. He considered that he had a duty
to assist those who wished to gain experience
of adjudication (with a view to their acting as
adjudicators in the future). To that end he had
acted as a pupil master on several occasions.
Mr Murray’s involvement had been partly as a
pupil. As such, he was given access to
adjudication documents, he attended
hearings, and Mr Bunton kept him advised of
developments as the adjudication progressed.
One such development had been that very late
in the day - on the very day Mr Bunton
proposed to issue his decision - the defenders
had submitted a substantially revised
submission. Mr Bunton had copied this to Mr
Murray because he had wanted him to see it.
Mr Bunton had not allowed the late
submission to be received - but he had wanted
to show Mr Murray that this was the sort of
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tactic which adjudicators had to beware of. In
the course of Mr Murray’s pupillage, and
solely for Mr Murray’s own benefit, Mr Bunton
had encouraged him to set out his views in
writing on certain of the issues in the
adjudication. Mr Murray had set out his views
in relation to the crystallisation aspect of the
jurisdictional challenge and had sent them to
Mr Bunton as an email attachment, but Mr
Bunton had not opened up the attachment.
That was because the time for reading a
pupil’s efforts was after the adjudication, not
before a decision had been issued. He had also
suggested to Mr Murray that he might wish to
attempt setting out his views on the extension
of time/prolongation claim, but Mr Murray
had not in fact done that (although he had
intended to). Mr Murray’s other role in the
adjudication had involved him providing Mr
Bunton with assistance (i) populating the Scott
Schedule; (ii) taking notes of meetings and
producing the action points which Mr Bunton
had decided upon at those meetings; (iii) proof
reading Mr Bunton’s decision. These were not
pupillage tasks. Mr Murray was to be paid for
this work. The Scott Schedule had had to be
updated as the adjudication progressed.
Parties’ positions altered, e.g. when
concessions were made during hearings, and
the Schedule had to be altered to reflect such
changes, and to reflect decisions which Mr
Bunton made on each of the items claimed. As
a quantity surveyor Mr Murray was very
familiar with the use of Scott Schedules and
with the sort of subject-matter which
comprised the dispute. At the meetings where
Mr Murray kept notes (and on at least one
occasion produced action points) these were
in effect minutes of the meeting. Mr Bunton
and the parties had also kept notes. The
action points all reflected Mr Bunton’s
instructions at the meetings. Mr Murray’s
proof reading of the decision and reasons
involved checking the grammar, looking for
typographical errors, and seeing that the
contents were consistent with the figures
which Mr Bunton had instructed be inserted in
the Scott Schedule. Mr Murray had checked
Mr Bunton’s arithmetic. On occasion he had
asked Mr Bunton to clarify what might be
interpreted as possible differences between
the Schedule and the decision. In such
instances Mr Bunton had either provided
clarification or he had indicated that
clarification was unnecessary. Mr Bunton had
decided every issue which arose in the
adjudication himself, without any oral or
written advice from Mr Murray suggesting an
answer to any issue. Nor had he used Mr
Murray as a sounding board to test his own
views. The entirety of the decision had been
his own determinations and reasoning.
[29] Mr Murray carries on his own practice as
a quantity surveyor and claims consultant. His
account of his roles in the adjudication was, in
all material respects, to the same effect as Mr
Bunton’s evidence. One matter I should record
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in relation to Mr Murray’s note on the
jurisdictional point is that in his witness
statement of 20 June 2019 (para 20) he
recalled:
“… Mr Bunton saying (probably on 6th March)
that I had approached it from a slightly
different angle than he had done.”
However, in his supplementary statement of 5
July 2019 (para 4) Mr Murray indicated that
having thought about the matter further he
recalled that the exchange with Mr Bunton
had in fact taken place at the Crannog Hotel,
Stirling on 20 February 2019 during a break in
the hearing. It had been after Mr Bunton had
informed the parties that, having reconsidered
matters following the defenders’ request that
he do so, he was adhering to his decision on
jurisdiction. Mr Murray further explained:
“It may have been that the actual words were
along the lines ‘I may get you to do an
exercise on the jurisdictional challenge … I will
than look at it, it may be you have come at it
from a different angle from me ‘. I suppose
grammatically, correctly he should have said
‘will have come ...’… It was the word ‘have
come at it from different angle’ that stuck in
my mind and to which I have previously
referred. That was after he had told the
parties that he wasn’t changing his decision.”
In oral evidence he adhered to what he said in
that supplementary statement. The comment
had been made on 20 February 2019 at the
time when Mr Bunton had suggested that Mr
Murray carry out the exercise.
Counsel’s submissions
[30] It was common ground that in reaching
his decision the adjudicator required to
comply with the rules of natural justice
(Costain Limited v Strathclyde Builders Limited
2004 SLT 102; Carillion Utility Services Limited
v SP Power Systems Limited [2011] CSOH 139;
Highland and Islands Airports Limited v
Shetland Islands Council [2012] CSOH 12). The
test is not “has an unjust result been
reached?” but “Was there an opportunity
afforded for injustice to be done?” (Barrs v
British Wool Marketing Board 1957 SC 72, per
Lord President Clyde at p82). Immaterial
breaches of natural justice will not render a
decision unenforceable: the provisional nature
of an adjudicator’s decision justifies ignoring
non-material breaches (Balfour Beatty
Construction Ltd v the Mayor and Burgesses of
the Borough of Lambeth [2002] EWHC 597
(TCC), [2002] BLR 288, per HH Judge Lloyd QC
at para 27).
[31] Mr MacColl emphasized that the
defenders did not suggest there was any
question of the adjudicator not having acted
in good faith in making use of Mr Murray.
However, he submitted that there had been a
material breach of natural justice - an
opportunity had been afforded for injustice to
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be done. The adjudicator had obtained
quantity surveying assistance and advice from
Mr Murray on significant matters. The parties
had not been told about the provision or terms
of that assistance and advice, and they had
had no opportunity to comment on it. The
court should conclude on the evidence that the
adjudicator had read Mr Murray’s note on the
jurisdictional issue before he issued his final
decision on 15 March 2019.
[32] Mr Turner submitted that there had been
no material breach of natural justice. The
services which Mr Murray had provided had
been of an administrative, secretarial,
arithmetical and mechanical nature (cf the
role of the adjudicator’s assistant, Mr
Hutchison (a quantity surveyor), in John Sisk &
Son Limited v Duro Felguera UK Limited [2016]
EWHC 81 (TCC), [2016] BLR 147, 165 Con LR
33). It was clear on the evidence that Mr
Bunton had not read Mr Murray’s note. It was
also clear that Mr Murray had not provided
advice on any of the issues in the adjudication,
and that Mr Bunton had reached each and
every determination himself.
Decision: natural justice
[33] Both Mr Bunton and Mr Murray appeared
to me to be witnesses who were doing their
best to assist the court. They gave their
evidence with moderation. They conceded
matters where it was right to do so. Their
evidence was mutually consistent. In my
opinion it was also consistent with the
documentary evidence. Both seemed to me to
be credible and reliable witnesses. I accept
their evidence. I am satisfied that the services
which Mr Murray provided were essentially of
an administrative and checking nature. They
were not quantity surveying advice. Of course,
Mr Murray’s experience as a quantity surveyor
made him well suited to performing the
functions he did, and it facilitated the smooth
running of the adjudication. He was very
familiar with Scott Schedules, and it was much
easier for him than it would have been for a
layman to carry out many of the tasks which
he performed (e.g. checking that the schedule
properly recorded the positions of the parties
(and, ultimately, the decision of the
adjudicator); and following and noting
discussions and action points at meetings).
That was undoubtedly an advantage.
However in my opinion, none of what he did
involved Mr Murray giving Bunton quantity
surveying advice on any material matter. I am
satisfied that all of the material decisions on
the matters in issue in the adjudication were
taken by the adjudicator himself solely on the
basis of the information which the parties put
before him. Accordingly, while I think that the
adjudicator ought to have told the parties
what Mr Murray was doing, in my opinion in
the whole circumstances his failure to do that
was not a material breach of the requirements
of natural justice.
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Any adjudicator offering pupillage must be
alert to the dangers of having their decision
challenged if the pupil has played a significant
part in the decision making process or
influenced the decision maker during debate
or discussion, which could be taken to be
secret evidence and not put before the
parties.
Matthew Molloy offers pupillage regularly and
to date there has been no issue with this. His
blog on the Practical Law website explains the
scheme further and says this:
What am I doing about this?
I have amended my terms of appointment so
that they provide that I may involve a pupil to
shadow me during the adjudication, subject to
the parties being notified and being given the
opportunity to object. There is obviously no
charge or cost to the parties.
How does it work in practice?
Following service of the referral, I will ask the
pupil to confirm to me whether they have any
conflict with the parties. I also ask them to
provide an undertaking of confidentiality.
Providing they have no conflict, I will forward
a copy of the pupil’s CV to the parties asking
whether they have any objection, confirming
that the pupil will not be involved in any
procedural or substantive matters.
Subject to any objection, I then forward the
adjudication notice and referral to the pupil as
if they were being approached to act directly
by the parties. I then ask the pupil to send me
their directions. The pupil then effectively
follows me, but typically up to one week in
arrears, addressing jurisdictional points and
anything else that comes along, but only after
I have addressed the issue with the parties.
If there is a meeting or hearing with the
parties then the pupil will need to be following
more closely in arrears, and they will attend
the meeting. I will also give them access to
submissions and then, finally, they will draft a
decision (again after me). Once they have
completed the decision, I will provide them
with a copy of my decision in exchange for
theirs and we will discuss matters arising.
There will invariably be exchanges and
discussions regarding procedural decisions
too.
Is it working?
The feedback from pupils has been good. They
welcome the opportunity to see things from
the adjudicator’s perspective and several have
said that they think it should be compulsory
for aspiring adjudicators.
WWW.UKADJUDICATORS.CO.UK
OCTOBER 2019 NEWSLETTER
14 | P a g e
Hopefully the court decision will not put off
adjudicators offering pupillage and mentoring
to new and aspiring adjudicators.
https://www.scotcourts.gov.uk/docs/default-
source/cos-general-docs/pdf-docs-for-
opinions/2019csoh71.pdf?sfvrsn=0
ESCL CONFERENCE 2019
The European Society of Construction Law
2019 conference will be held from the 23rd to
24th October 2019 in Delft, Netherlands.
https://www.escl.org/events/escl-annual-
conference-2019-legal-implications-climate-
change-case-circularity
SCL INTERNATIONAL CONFERENCE
2020
The Society of Construction Law 9th
International Conference is being held at the
Cordis Hotel Auckland from the 4th
to the 6th
November 2020.
http://www.constructionlaw2020.com/scl20
ADJUDICATION SOCIETY
ADJUDICATION PANEL CASE
STUDIES AND DISCUSSION
Tuesday, 15 October 2019 6 for 6.30pm
Panellists: 3PB Barristers, BDB
Pitmans, Devonshires and MCMS
Venue: BW Interiors Ltd, 5 Old Bailey, London
EC4M 7BA
https://www.adjudication.org/sites/default/fil
es/Adjudication%20Society%20London%20%2
6%20South%20East%20Event%20-
%2015%20October%202019.pdf
ANNUAL CONFERENCE 2019
The Society's Eighteenth Annual Conference
will be held at the Hilton London Metropole,
225 Edgware Rd, Paddington, London W21JU
on the 7 November 2019.
https://www.adjudication.org/events/annual-
conference-2019
WWW.UKADJUDICATORS.CO.UK
OCTOBER 2019 NEWSLETTER
15 | P a g e
FIDIC CONFERENCES 2019
FIDIC INTERNATIONAL CONTRACT USERS'
CONFERENCE (UK)
Main Conference: 3 & 4 December 2019
Workshops: 2 & 5 December 2019
London, UK
https://law.knect365.com/fidic-international-
contract-users/
Main Conference: 5 & 6 November 2019
Workshops: 4 & 7 November 2019
Avani Resort Livingstone, Zambia
https://law.knect365.com/fidic-africa-
contracts/
UK ADJUDICATORS DINNER
The UK Adjudicators will be holding an
informal dinner after the Adjudication Society
Annual Conference on the 7 November 2019.
Anyone with an interest in adjudication is
welcome to attend. Further details will follow
in due course.
DRBF CONFERENCES 2020
The DRBF International Conference takes
place from the 27 to 29 May 2020 at the
Radisson Blu Cape Town, South Africa.

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UK Adjudicators October 2019 newsletter

  • 1. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 1 | P a g e EDITORS COMMENTS The 2020 London Adjudication & Arbitration Conference takes place on the 20 August in central London. If you would like to attend, speak, support, sponsor or exhibit please get in touch to express your interest. The next opportunity we have to network is at the SCL Bristol lunch. We have taken a table at the SCL Bristol Lunch on the 11 October 2019, although the event is a sell-out, we still have places available on the table. If you’d like to attend the cost is £62.50 + VAT. Please contact me on my work email if you would like to attend and I’ll provide an invoice and bank details for payment. The Adjudication Society Annual conference takes place on the 7 November 2019 I do hope that our panellists will be able to attend the conference. I am hoping that we can meet up after for an informal dinner and welcome suggestions as to restaurants close to the venue. UK Adjudicators are a supporting organisation for the Dispute Resolution Board Conference that takes place in Cape Town, South Africa in May 2020. If you can attend; this is an excellent networking and knowledge sharing event for those interested in Dispute Boards and being a Dispute Board Member. We are holding the 2020 Edinburgh Adjudication & Arbitration Conference in Edinburgh on Friday the 7th March and welcome expressions of interest to attend, speak, support, sponsor or exhibit. As always, I would encourage you to forward articles, commentaries, news and events that our readers would find of interest and share details of our panel and nomination service with friends, colleagues and clients. We will be taking a table at the SCL London lunch again on the 7 February 2020 and will release details nearer the time. Sean Gibbs LLB(Hons) MICE LLM FCIOB FRICS FCIARB, is a director with Hanscomb Intercontinental and is available to serve as an arbitrator, adjudicator, mediator, quantum expert and dispute board member. sean.gibbs@hanscombintercontinental.co.uk
  • 2. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 2 | P a g e ADJUDICATOR TO CONSIDER SET- OFF AS A VALID DEFENCE TO A PAYMENT CLAIM UNDER THE NT SOP ACT The NT Court of Appeal in a joint judgment dismissed an appeal in relation to a security of payment determination being rendered void due to jurisdictional error (James Engineering Pty Ltd v ABB Australia Pty Ltd & Anor [2019] NTCA 7). The judgment provides useful guidance on the NT Act and its differences from the East Coast model Acts. The relevant contract was for the design, manufacture, transport and delivery of modular switch rooms for the Ichthys Onshore LNG Facilities project in Darwin. James served a payment claim for $2.1m, to which ABB responded indicating it proposed to pay $0, for reasons including that ABB claimed a set off for liquidated damages of $1.7m against James. James referred it for adjudication under the Construction Contracts (Security of Payments) Act (NT) (NT Act). The adjudicator awarded $1.5m to James, with no allowance for the set off claimed by ABB. ABB successfully challenged the adjudication determination in the NT Supreme Court. The determination was set aside for jurisdictional error, essentially because of the adjudicator’s failure to deal with the merits of ABB's claimed set-off, which had been raised as a "shield and not a sword" to the payment claim. James appealed; however, the Court dismissed the three grounds of appeal against Justice Kelly’s judgment. It dealt rapidly with the first of these – that the trial judge concluded the case on a basis not put to her Honour. The disposition of the two other grounds provides useful guidance, especially about the scope of jurisdictional error under the NT Act: •The Court upheld Justice Kelly’s finding at trial that the adjudicator had misstated the legal position under the NT Act by referring to the ability of ABB (as respondent) to apply the liquidated damages in response to the payment claim in the payment schedule. The Court pointed out that unlike in the East Coast model security of payment Acts (i.e. NSW, QLD and VIC which impose strict requirements in relation to responding to a payment claim e.g. certain particulars must be pleaded in the initial payment claim / payment schedule stages, otherwise they may be precluded from being relied upon in an adjudication response), the NT Act does not refer to or require a "payment schedule" and
  • 3. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 3 | P a g e expressly requires the adjudicator to take into account the adjudication response served under section 29 of the NT Act. As a consequence, the adjudicator fell into jurisdictional error by failing to take into account ABB’s response, including the merits of any counterclaim or set off in reaching his determination. •The Court also upheld the finding that, by failing to determine the merits of ABB’s set- off claim, the adjudicator had not discharged the requirement to make (at least) a bona fide attempt to determine the matter before him (namely to determine on the balance of probabilities whether there was actually an amount owing by ABB to James, and if so, how much on the basis of the application and response). The Court agreed with ABB's submission that the adjudicator wrongly decided that ABB's claim to set off liquidated damages fell outside the payment dispute he was obliged to determine. By refusing to consider the set-off claim as part of the payment dispute, this failure was a jurisdictional error and was “material” as, if the adjudicator had taken the set-off into account, the adjudicator “could have made a different decision”. Contributing authors: Sergio Capelli, Frank Bannon, Dale Brackin THE ENFORCEABILITY OF AN ADJUDICATOR’S DECISION IN SOUTH AFRICA Any dispute between an employer and contractor will generally have to first be referred to an adjudicator. The adjudicator bases his decision on documentation and on his own knowledge and expertise.[1] Occasionally a hearing of oral evidence will take place. In the recent case of Ekurhuleni West College [2] the court pointed out that the very nature of the adjudication process is sui generis in the sense that the adjudication process is not governed by any statutory provision or the common law. As a result of the adjudication procedure being unregulated by statute, many cases have come before the courts regarding whether the determination of an adjudicator is binding and enforceable as an interim obligation pending the finalisation of an arbitration award. “The courts are of the opinion that as long as the adjudicator acted generally in accordance
  • 4. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 4 | P a g e to the usual rules of natural justice and without bias and within his terms of reference, the adjudicator’s decision should be enforceable.” [3] The Ekurhuleni West College has been referred to the Supreme Court of Appeals (SCA) where Nupen Staude de Vries is representing Trencon Construction (Pty) Ltd. The judgment in the Ekurhuleni West College matter is supported in the case of Stefanutti Stocks (Pty) v S Property [4], clause 40 of the building agreement provided that “an adjudicators decision shall be binding on the parties who shall give effect to it without delay unless and until revised by an arbitrator…should a notice of dissatisfaction not be given the adjudicator’s decision will be final and binding.” In this case, the Respondent (S8 Property (Pty) Ltd) refused to pay the amounts owing ordered by the adjudicator on the basis that a notice of dissatisfaction was filed and the matter was not finalised because it was referred to arbitration. The court held that the adjudication decision is binding but of an interim nature (the obligation to perform in terms of the decision is final). In instances where no notice of dissatisfaction is given the decision accordingly becomes final and binding, in finality. Similarly, in the case of Tubular Holdings (Pty) v DBT Technologies (Pty) Ltd [5], the court held that a dissatisfied party must still comply promptly with the adjudicator’s determination, notwithstanding the party’s delivery of a notice of dissatisfaction. The notice preserves the party’s right to require arbitration but does not affect the binding nature of the adjudicator’s determination. With regard to the performance of obligations under the adjudicator’s decision the court in Esor Africa (Pty) Ltd / Franki Africa (Pty) Ltd JV v Bombela Civils JV (Pty) Ltd [6]held that “[t]he DAB decision is not final but the obligation to make payment or otherwise perform under it is. In the most elementary way, the DAB process ensures the interim solution of an issue which requires performance and requires that the decision is implemented. The parties’ position may be altered by the outcome of the eventual arbitration which is a lengthier process and there may be a refund ordered of monies paid or an interest readjustment if too little was decided by the DAB” In the case of Bombardier Africa Alliance Consortium v Passenger Rail Agency of South Africa [7] the court made specific reference to the benchmark case of Tubular Holdings and
  • 5. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 5 | P a g e Esor Africa in their reasoning. The court in Bombardier re-emphasised that “if the decision in the adjudication cannot be enforced pending the final determination of the matter in arbitration, the purpose of the adjudication becomes undermined.” In relation to the jurisdiction of the adjudicator, the court in the Ekurhuleni made reference to the jurisdiction of an adjudicator and held in paragraph 35 bearing reference to the C & B Scene Concept Design [8] case that “it therefore appears that the enforcement of an adjudicator’s decision cannot be prevented whether it was caused by errors of procedure, fact, or law, unless the adjudicator has purported to decide matters which were not referred to him.” Although there is an ongoing legal debate on this point, the courts have to date enforced the determination of an adjudicator’s decision as binding, notwithstanding the finalisation of the dispute being referred to arbitration. There are however certain situations where a party can resist enforcement. Authors: Sanjeevani Maharaj (Associate) & Cameron Staude (Director) [1] McKenzie’s Law of Building and Engineering Contracts and Arbitration (Seventh Edition) at page 246. [2] Ekurhuleni West College v Segal and Another (26624/2017) [2018] ZAGGPPHC 662. [3] Ibid at paragraph 44. [4] 2013 JDR 2441 (GSI). [5] 2014(1) SA 224 (GSJ). [6] (12/7442) [2013] ZAGPJHC 407 at paragraph 11. [7] (65099/2017) [2018] ZAGPPHC 413 at paragraph 27. [8] (2002) EWCA Civ 46; 2002 BLR 93 TCC. CAMERON STAUDE Director M: 083 380 6818 T: (010) 880 3285 E: staude@nsdv.co.za 18 Hurlingham Road, Illovo, Sandton 2193 www.nsdvinc.co.za THE RELEVANCE OF THE “PRIMARY ACTIVITY” OF A SITE TO ADJUDICATION Most commercial construction contracts are subject to adjudication, even if the contract is silent on that issue.
  • 6. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 6 | P a g e But there are exceptions. One such exception is where the works being carried out are not “construction operations” as defined in section 105 of the Housing Grants, Construction and Regeneration Act 1996 as amended (“the Construction Act”). Section 105 of the Construction Act excludes from the definition of construction operations, amongst other things, “assembly, installation or demolition of plant or machinery, or erection or demolition of steel work for the purposes of supporting or providing access to plant or machinery, on a site where the primary activity is… nuclear processing, power generation or water or effluent treatment.” When is a construction operation, not a construction operation? This “primary activity” issue was the focus of the court's attention in the case of Engie Fabricom UK Ltd v MW High Tech Projects UK Ltd. In that case, MW was the main contractor for a fluidised bed gasification power plant, which involved the disposal of waste by power generation (a waste to energy project). In this case the parties agreed that under their contract they had the right to adjudicate, “to the extent permitted by and consistent with the provisions of the Construction Act.” Engie commenced an adjudication against MW for non-payment and won. It was awarded circa £27,000. MW did not pay. So Engie commenced court proceedings, seeking to enforce the decision by way of summary judgment in the usual way. MW said that the adjudicator did not have jurisdiction because there was no right to adjudicate. It said the works in question were not “construction operations” because the primary activity of the site was the generation of power. This was therefore caught by the exception at section 105 of the Construction Act. By contrast, Engie said that the primary activity was not power generation, but rather the disposal and thermal treatment of waste by incineration. The generation of power from the disposal of that waste was a secondary activity. As a result, it said the adjudicator did have jurisdiction and so his decision should be enforced.
  • 7. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 7 | P a g e Bigger issues at stake Both parties put forward detailed arguments before the court. They were each represented by Queen’s Counsel (QCs), as well as junior counsel, so it must be assumed that there were bigger issues at stake than just the sum of £27,000 awarded to Engie. It is likely that Engie had in mind subsequent adjudications. There was not time to deal with both parties’ arguments at the half day court hearing, so they were given permission to make further submissions after the hearing. In its further submission MW said the case was not suitable for summary judgment, that expert evidence may be required and that a full trial would be beneficial. As confirmed by the judge by reference to the court rules, to defeat an application for summary judgment the defendant must show that it has a “real” prospect of success in defeating the claim. That is, not just a “fanciful” chance of success. As the judge noted, because this was a summary judgment application by Engie, MW did not have to show that its arguments were correct, just that it had a “real” prospect of doing so. Realistic prospect of success can defeat summary judgment enforcement of an adjudicator's decision The judge found that MW did have a real prospect of being able to establish that the primary activity of the site was power generation, which if proved would mean that the adjudicator did not have jurisdiction, which would render his decision unenforceable. In addition, he said the court did not have all the evidence before it, and the parties had not had an adequate opportunity to address the issues. As a further tactical move, MW offered to pay the entire sum claimed into court, pending the outcome of the court’s determination of the issue. As a result of the above, the judge refused to grant summary judgment to Engie, on condition that MW paid the above sum into court. Contract should have been clearer on adjudication There are two main lessons to be learned from this case. First, the arguments and therefore the costs over whether the parties could adjudicate could have been avoided if this had been made clear in the contract. Second, Engie may have been able to avoid this outcome if it had taken a different approach to enforcing the decision. Applying for summary judgment is the quickest
  • 8. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 8 | P a g e approach, but the test for defeating an application for summary judgment carries with it risk for the claiming party. Had Engie instead taken the route of seeking a declaration from the court, such as whether the adjudicator had jurisdiction by reference to the primary activity of the site, it may have avoided this outcome. Stuart Thwaites, Legal Director Construction and Engineering Department E: stuart.thwaites@wrighthassall.co.uk ADJUDICATION PUPILLAGE - DICKIE & MOORE LTD V MCLEISH AND OTHERS [2019] CSOH 71 The Scottish Courts have provided an opportunity for those considering offering pupillage to aspiring adjudicator’s to ensure that the pupil’s involvement does not lead to a breach of natural justice nor use of an adjudicator appointed expert without the permission of the parties. The case before the court was concerning enforcement of an adjudicator’s decision. The well known adjudicator; Len Bunton had issued his decision on the 15 March 2019. He held that the pursuers were entitled to payment of £324,492.60, with interest of £16,733.59. The adjudicator found the pursuer entitled to a further extension of time of 11 weeks; and in relation thereto he allowed a sum of £63,093.47 by way of loss and expense. He held that the Works Final Account should be £181,607.17 higher (ie the Bills of Quantities total was increased by £40,214.90, the total for Architect’s Instructions by £62,726.64, and the total for other variations by £78,665.63). He found that the Employer had not been justified in deducting (i) £5,019.80 in respect of an alleged defect (per AI 29); (ii) liquidated damages of £26,000; (iii) £28,977 for ground retention; (iv) £11,901.52 for render to the main house. He determined that some of the other deductions which had been made were excessive: the appropriate deduction for externals ought to have been £25,000 rather than £58,430.32, and the deduction for MVHR ought to have been £1,950 rather than £4,470. He found the pursuer entitled to interest of £16,733.59. He found the parties jointly and severally liable for his fees and expenses, but also ordered that each party should pay half of them. Of interest to pupillage was the ground of resistance where a breach of natural was alleged due to the the involvement of the pupil. The relevant parts of the judgement said: (iii) Was there a material breach of natural justice? Introduction
  • 9. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 9 | P a g e [26] This complaint relates to Torquil Murray’s involvement in the adjudication. Mr Murray is a quantity surveyor and claims consultant. With a view to obtaining adjudication experience he acted as Mr Bunton’s pupil. The parties were made aware of this role at the time and neither objected to it. However, they were not informed until the adjudicator issued his fee-note that Mr Murray also provided other assistance to Mr Bunton during the adjudication, for which he was to be remunerated. Matters agreed in the joint minute [27] The following matters were agreed: “35. Mr Torquil Murray is a quantity surveyor who works as a claims consultant. 36. As the parties were aware at the time, Mr Murray participated in the adjudication as the adjudicator’s pupil; he was seeking to gain experience of the adjudication process; he assisted with the administration of the adjudication. 37. Mr Murray also proof read the Decision before it was issued. 38. As part of his pupillage process, Mr Murray considered his own conclusions in relation to aspects of the adjudication. 39. Mr Murray produced his own conclusions on the crystallisation issue. 40. Mr Murray issued his conclusions on the jurisdiction issue to the adjudicator on 27 February and 5 March 2019. 41. The adjudicator asked Mr Murray to produce his (Mr Murray’s) own conclusions on the Extension of Time elements of the claim. 42. Mr Murray reviewed and considered the relevant adjudication papers as part of his preparation of his own conclusions.” The evidence [28] Mr Bunton is a very experienced adjudicator. He considered that he had a duty to assist those who wished to gain experience of adjudication (with a view to their acting as adjudicators in the future). To that end he had acted as a pupil master on several occasions. Mr Murray’s involvement had been partly as a pupil. As such, he was given access to adjudication documents, he attended hearings, and Mr Bunton kept him advised of developments as the adjudication progressed. One such development had been that very late in the day - on the very day Mr Bunton proposed to issue his decision - the defenders had submitted a substantially revised submission. Mr Bunton had copied this to Mr Murray because he had wanted him to see it. Mr Bunton had not allowed the late submission to be received - but he had wanted to show Mr Murray that this was the sort of
  • 10. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 10 | P a g e tactic which adjudicators had to beware of. In the course of Mr Murray’s pupillage, and solely for Mr Murray’s own benefit, Mr Bunton had encouraged him to set out his views in writing on certain of the issues in the adjudication. Mr Murray had set out his views in relation to the crystallisation aspect of the jurisdictional challenge and had sent them to Mr Bunton as an email attachment, but Mr Bunton had not opened up the attachment. That was because the time for reading a pupil’s efforts was after the adjudication, not before a decision had been issued. He had also suggested to Mr Murray that he might wish to attempt setting out his views on the extension of time/prolongation claim, but Mr Murray had not in fact done that (although he had intended to). Mr Murray’s other role in the adjudication had involved him providing Mr Bunton with assistance (i) populating the Scott Schedule; (ii) taking notes of meetings and producing the action points which Mr Bunton had decided upon at those meetings; (iii) proof reading Mr Bunton’s decision. These were not pupillage tasks. Mr Murray was to be paid for this work. The Scott Schedule had had to be updated as the adjudication progressed. Parties’ positions altered, e.g. when concessions were made during hearings, and the Schedule had to be altered to reflect such changes, and to reflect decisions which Mr Bunton made on each of the items claimed. As a quantity surveyor Mr Murray was very familiar with the use of Scott Schedules and with the sort of subject-matter which comprised the dispute. At the meetings where Mr Murray kept notes (and on at least one occasion produced action points) these were in effect minutes of the meeting. Mr Bunton and the parties had also kept notes. The action points all reflected Mr Bunton’s instructions at the meetings. Mr Murray’s proof reading of the decision and reasons involved checking the grammar, looking for typographical errors, and seeing that the contents were consistent with the figures which Mr Bunton had instructed be inserted in the Scott Schedule. Mr Murray had checked Mr Bunton’s arithmetic. On occasion he had asked Mr Bunton to clarify what might be interpreted as possible differences between the Schedule and the decision. In such instances Mr Bunton had either provided clarification or he had indicated that clarification was unnecessary. Mr Bunton had decided every issue which arose in the adjudication himself, without any oral or written advice from Mr Murray suggesting an answer to any issue. Nor had he used Mr Murray as a sounding board to test his own views. The entirety of the decision had been his own determinations and reasoning. [29] Mr Murray carries on his own practice as a quantity surveyor and claims consultant. His account of his roles in the adjudication was, in all material respects, to the same effect as Mr Bunton’s evidence. One matter I should record
  • 11. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 11 | P a g e in relation to Mr Murray’s note on the jurisdictional point is that in his witness statement of 20 June 2019 (para 20) he recalled: “… Mr Bunton saying (probably on 6th March) that I had approached it from a slightly different angle than he had done.” However, in his supplementary statement of 5 July 2019 (para 4) Mr Murray indicated that having thought about the matter further he recalled that the exchange with Mr Bunton had in fact taken place at the Crannog Hotel, Stirling on 20 February 2019 during a break in the hearing. It had been after Mr Bunton had informed the parties that, having reconsidered matters following the defenders’ request that he do so, he was adhering to his decision on jurisdiction. Mr Murray further explained: “It may have been that the actual words were along the lines ‘I may get you to do an exercise on the jurisdictional challenge … I will than look at it, it may be you have come at it from a different angle from me ‘. I suppose grammatically, correctly he should have said ‘will have come ...’… It was the word ‘have come at it from different angle’ that stuck in my mind and to which I have previously referred. That was after he had told the parties that he wasn’t changing his decision.” In oral evidence he adhered to what he said in that supplementary statement. The comment had been made on 20 February 2019 at the time when Mr Bunton had suggested that Mr Murray carry out the exercise. Counsel’s submissions [30] It was common ground that in reaching his decision the adjudicator required to comply with the rules of natural justice (Costain Limited v Strathclyde Builders Limited 2004 SLT 102; Carillion Utility Services Limited v SP Power Systems Limited [2011] CSOH 139; Highland and Islands Airports Limited v Shetland Islands Council [2012] CSOH 12). The test is not “has an unjust result been reached?” but “Was there an opportunity afforded for injustice to be done?” (Barrs v British Wool Marketing Board 1957 SC 72, per Lord President Clyde at p82). Immaterial breaches of natural justice will not render a decision unenforceable: the provisional nature of an adjudicator’s decision justifies ignoring non-material breaches (Balfour Beatty Construction Ltd v the Mayor and Burgesses of the Borough of Lambeth [2002] EWHC 597 (TCC), [2002] BLR 288, per HH Judge Lloyd QC at para 27). [31] Mr MacColl emphasized that the defenders did not suggest there was any question of the adjudicator not having acted in good faith in making use of Mr Murray. However, he submitted that there had been a material breach of natural justice - an opportunity had been afforded for injustice to
  • 12. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 12 | P a g e be done. The adjudicator had obtained quantity surveying assistance and advice from Mr Murray on significant matters. The parties had not been told about the provision or terms of that assistance and advice, and they had had no opportunity to comment on it. The court should conclude on the evidence that the adjudicator had read Mr Murray’s note on the jurisdictional issue before he issued his final decision on 15 March 2019. [32] Mr Turner submitted that there had been no material breach of natural justice. The services which Mr Murray had provided had been of an administrative, secretarial, arithmetical and mechanical nature (cf the role of the adjudicator’s assistant, Mr Hutchison (a quantity surveyor), in John Sisk & Son Limited v Duro Felguera UK Limited [2016] EWHC 81 (TCC), [2016] BLR 147, 165 Con LR 33). It was clear on the evidence that Mr Bunton had not read Mr Murray’s note. It was also clear that Mr Murray had not provided advice on any of the issues in the adjudication, and that Mr Bunton had reached each and every determination himself. Decision: natural justice [33] Both Mr Bunton and Mr Murray appeared to me to be witnesses who were doing their best to assist the court. They gave their evidence with moderation. They conceded matters where it was right to do so. Their evidence was mutually consistent. In my opinion it was also consistent with the documentary evidence. Both seemed to me to be credible and reliable witnesses. I accept their evidence. I am satisfied that the services which Mr Murray provided were essentially of an administrative and checking nature. They were not quantity surveying advice. Of course, Mr Murray’s experience as a quantity surveyor made him well suited to performing the functions he did, and it facilitated the smooth running of the adjudication. He was very familiar with Scott Schedules, and it was much easier for him than it would have been for a layman to carry out many of the tasks which he performed (e.g. checking that the schedule properly recorded the positions of the parties (and, ultimately, the decision of the adjudicator); and following and noting discussions and action points at meetings). That was undoubtedly an advantage. However in my opinion, none of what he did involved Mr Murray giving Bunton quantity surveying advice on any material matter. I am satisfied that all of the material decisions on the matters in issue in the adjudication were taken by the adjudicator himself solely on the basis of the information which the parties put before him. Accordingly, while I think that the adjudicator ought to have told the parties what Mr Murray was doing, in my opinion in the whole circumstances his failure to do that was not a material breach of the requirements of natural justice.
  • 13. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 13 | P a g e Any adjudicator offering pupillage must be alert to the dangers of having their decision challenged if the pupil has played a significant part in the decision making process or influenced the decision maker during debate or discussion, which could be taken to be secret evidence and not put before the parties. Matthew Molloy offers pupillage regularly and to date there has been no issue with this. His blog on the Practical Law website explains the scheme further and says this: What am I doing about this? I have amended my terms of appointment so that they provide that I may involve a pupil to shadow me during the adjudication, subject to the parties being notified and being given the opportunity to object. There is obviously no charge or cost to the parties. How does it work in practice? Following service of the referral, I will ask the pupil to confirm to me whether they have any conflict with the parties. I also ask them to provide an undertaking of confidentiality. Providing they have no conflict, I will forward a copy of the pupil’s CV to the parties asking whether they have any objection, confirming that the pupil will not be involved in any procedural or substantive matters. Subject to any objection, I then forward the adjudication notice and referral to the pupil as if they were being approached to act directly by the parties. I then ask the pupil to send me their directions. The pupil then effectively follows me, but typically up to one week in arrears, addressing jurisdictional points and anything else that comes along, but only after I have addressed the issue with the parties. If there is a meeting or hearing with the parties then the pupil will need to be following more closely in arrears, and they will attend the meeting. I will also give them access to submissions and then, finally, they will draft a decision (again after me). Once they have completed the decision, I will provide them with a copy of my decision in exchange for theirs and we will discuss matters arising. There will invariably be exchanges and discussions regarding procedural decisions too. Is it working? The feedback from pupils has been good. They welcome the opportunity to see things from the adjudicator’s perspective and several have said that they think it should be compulsory for aspiring adjudicators.
  • 14. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 14 | P a g e Hopefully the court decision will not put off adjudicators offering pupillage and mentoring to new and aspiring adjudicators. https://www.scotcourts.gov.uk/docs/default- source/cos-general-docs/pdf-docs-for- opinions/2019csoh71.pdf?sfvrsn=0 ESCL CONFERENCE 2019 The European Society of Construction Law 2019 conference will be held from the 23rd to 24th October 2019 in Delft, Netherlands. https://www.escl.org/events/escl-annual- conference-2019-legal-implications-climate- change-case-circularity SCL INTERNATIONAL CONFERENCE 2020 The Society of Construction Law 9th International Conference is being held at the Cordis Hotel Auckland from the 4th to the 6th November 2020. http://www.constructionlaw2020.com/scl20 ADJUDICATION SOCIETY ADJUDICATION PANEL CASE STUDIES AND DISCUSSION Tuesday, 15 October 2019 6 for 6.30pm Panellists: 3PB Barristers, BDB Pitmans, Devonshires and MCMS Venue: BW Interiors Ltd, 5 Old Bailey, London EC4M 7BA https://www.adjudication.org/sites/default/fil es/Adjudication%20Society%20London%20%2 6%20South%20East%20Event%20- %2015%20October%202019.pdf ANNUAL CONFERENCE 2019 The Society's Eighteenth Annual Conference will be held at the Hilton London Metropole, 225 Edgware Rd, Paddington, London W21JU on the 7 November 2019. https://www.adjudication.org/events/annual- conference-2019
  • 15. WWW.UKADJUDICATORS.CO.UK OCTOBER 2019 NEWSLETTER 15 | P a g e FIDIC CONFERENCES 2019 FIDIC INTERNATIONAL CONTRACT USERS' CONFERENCE (UK) Main Conference: 3 & 4 December 2019 Workshops: 2 & 5 December 2019 London, UK https://law.knect365.com/fidic-international- contract-users/ Main Conference: 5 & 6 November 2019 Workshops: 4 & 7 November 2019 Avani Resort Livingstone, Zambia https://law.knect365.com/fidic-africa- contracts/ UK ADJUDICATORS DINNER The UK Adjudicators will be holding an informal dinner after the Adjudication Society Annual Conference on the 7 November 2019. Anyone with an interest in adjudication is welcome to attend. Further details will follow in due course. DRBF CONFERENCES 2020 The DRBF International Conference takes place from the 27 to 29 May 2020 at the Radisson Blu Cape Town, South Africa.