Adjudicator’s fees – whether payable on resignation: Davies & Davies Associates Ltd v Steve Ward Services (UK) Ltd [2021] EWHC 1337 (TCC) Roger Ter Haar QC Mr Davies was appointed adjudicator in two adjudications between the defendant (Ward) (as referring party) and a company called Bhavishya Investment Ltd ("BIL") (as responding party). Mr Davies’ terms of appointment provided that his fees were payable to the claimant company. Ward had carried out construction works at a restaurant owned by BIL. A contract had been prepared but never signed in which ‘the client’ was named as “Vaishali Patel” as owner and proprietor of the restaurant. Miss Patel was the majority shareholder and a director of BIL. In the first Adjudication between Ward and BIL, Mr Davies resigned following a challenge to his jurisdiction, and rendered a small invoice for his fees to Ward, which they paid. (The challenge there had been that Ward had applied to the ANB for the appointment of an adjudicator before serving the notice of adjudication on BIL.) It was the second adjudication, which gave rise to this claim. Ward sought payment for its works from BIL who denied any entitlement by reason of defects in the works. Mr Davies resigned following the service of the referral, a response and a reply. In pursuance of his duty to ascertain the facts and the law and to avoid unnecessary expense, Mr Davies had concluded that the parties to the contract were Ward and Miss Patel and not BIL and that he therefore had no jurisdiction to determine the monetary claim. Mr Davies did not raise the matter with the parties or invite any submission on the question.
Nor had BIL raised the point in its Response.
The claimant relied on both the Scheme and the express terms of the adjudicator’s appointment (to which neither the claimant nor the responding party in the adjudication had objected) as entitling them to payment of Mr Davies fees.
Ward objected to payment of the fees on 4 grounds which the judge dealt with as set out below.
1. That there was no threshold point of jurisdiction before the Adjudicator entitling to resign, so that his decision to do so, amounted to the abandonment of his appointment and a deliberate and impermissible refusal to provide a Decision. Ward relied on the court of appeal decision in P C Harrington[6]. I n that case the court of appeal held the adjudicator reached a conclusion in breach of his duty to comply with the rules of natural justice in that he failed to decide a relevant issue raised by way of defence because he took what was later held to have been an erroneous view as to jurisdiction. The consequence was that his three decisions were unenforceable. Ward argued that the preponderance of evidence showed that BIL not Mrs Patel was the contracting party. The court disagreed. At the very least the adjudicator was entitled to conclude that Mrs Patel was the contracting party. Next, Ward argued that by failing to raise the jurisdictional issue in its response, BIL had waived its right to object and therefore it was not open to the adjudicator to decline jurisdiction. The adjudicator's power to take the initiative to ascertain the facts and the law (Scheme Part I para 13) had obviously to be exercised in the context of the dispute he was empowered to decide. It was not a roving commission to identify, formulate and decide the reference on the basis of new and fundamental issues neither party raised nor adopted despite invitation. The court did not find this an easy point.
[6] PC Harrington Contractors Ltd v Systech International Ltd [2012] EWCA Civ 1371
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