107772.001 SH Construction Case Booklet

The Court held that in cases of natural justice, the Courts rarely interfered with adjudicator’s decisions, unless it was plain that the adjudicator had decided a different question to that referred to him/her, or had gone about the task in an obviously unfair manner. If the final permutation as found by the adjudicator was covered by the presented arguments, it would be rare for a natural justice breach to be found. 16 The adjudicator was plainly of the view that he had to interpret clause 14.4. The question was not raised expressly on the written submissions, and the claimant simply denied the allegation it was in breach of clause 14. On the other hand, the Scott schedules were full of references to the defendant’s failure to give the claimant any opportunity to inspect or rectify alleged defects. That imported an allegation that it had been a requirement that the claimant be given that opportunity. Therefore, the adjudicator’s decision was covered by the arguments raised, and there was no obvious unfairness and no breach of natural justice. 8. Parties – Correct Name – Jurisdiction Fern & another v West and others (Haven Build) 17 Mr and Mrs Fern engaged a builder trading as Haven Build to carry out construction works to a house they intended to live in as their family home. The contract was in the standard form of the Federation of Master Builders named Haven Build as the builder and contained an adjudication clause. There was a dispute about the quality and completeness of the work and Mr and Mrs Fern referred the dispute to adjudication. The adjudicator found for them and awarded them a sum of money. Haven Build refused to pay and Mr and Mrs Fern took enforcement proceedings. The adjudication notice and the submissions of both parties named Haven Build as the respondent. In the enforcement proceedings in the High Court, the defendants were named as Keith West, Adam West and Linda West trading as Haven Build. Ms West took no part in the proceedings, but Keith and Adam West took part and denied liability. They argued that the adjudication was defective because Haven Build was named as the responding party, instead of the individuals. It was contended that Haven Build had no separate legal personality and this meant the adjudicator lacked jurisdiction. Fraser J giving judgment for Mr & Mrs Fern, rejected the defendants’ argument. For it to succeed would have meant overturning or distinguishing a number of previous authorities. In addition s.108 of the Act would then be arguably deficient as only a contracting party could be named in adjudication documents. In contrast, in Court proceedings, paragraph 5A.3 of Practice Direction (PD) 7A) required the parties using a trade name to be named individually. The defendants’ arguments were described as “wholly unmeritorious”, “bad points” and “wrong in law”. The judge referred to a case in which Akenhead J had used similar terms in similar circumstances. 18 The judge condemned the defendants for “scrabbling around for some reason to try and avoid enforcement”.

The judge also noted that no such issue had been raised before the adjudicator, nor had the defendants reserved their position. Their defence had no “prospect of life whatsoever”. 9. Stay of Execution – Dissipation of Assets – Principles Gosvenor London Ltd v Aygun Aluminium UK Ltd 19 The appellant Gosvenor carried out cladding works for the respondent Aygun. Following project delays a dispute arose over the payments claimed by Gosvenor which Aygun contended were exaggerated. In adjudication, Gosvenor was awarded some £553,000. When Gosvenor sought to enforce the award, Aygun raised allegations of fraud, and said the Gosvenor had stolen site records and intimidated witnesses and would try anything to avoid repayment of the adjudication sum. Based on discrepancies in Gosvenor’s accounts, Aygun said there was a real risk of dissipation of assets. At first instance Mr Justice Fraser gave judgment for Gosvenor on their application for summary judgment on the basis that the allegations of fraud could have been raised in the adjudication, but imposed a stay of execution . The stay was based on a disparity in the value of works in payment invoices, Gosvenor’s lack of financial viability and the likelihood of dissipation of assets if the sum was paid. The Court of Appeal held the judge had applied the correct principles to an application to stay execution of a judgment. It there was a risk of dissipation a stay might be granted regardless of the fact that judgment was based on an adjudicator’s award as an assessment of the risk of dissipation could not be carried out before the award. The Court was entitled to have regard to all relevant evidence irrespective of whether it was or raised in the adjudication or not. If however the adjudicator had heard and rejected any such evidence, the Court should have regard to that in the exercise of its discretion, as a material but not decisive factor. The same applied to evidence that might have been but was not raised in the adjudication. The consideration of such issues called for a nuanced approach when considering an application for a stay. The judge had been right to conclude that a stay could be imposed when the evidence showed there was a real risk of dissipation. Where there was an overlap between the evidence that was or might have been deployed in the adjudication and that used in the stay, the judge should determine the consequences of that overlap in deciding what evidence was to be taken into account.


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