Neither party sought any declarations or findings as to the value of individual items within the application. In fact, each of the eight changes comprised sub-items, but the claim for valuation remained global in nature. After the deduction of LDs, the adjudicator awarded the claimant £541,880.12 plus VAT and interest at 10%. His decision ran to 88 pages. He set out clearly the dispute which had been referred to him and details of the determinations sought by both parties in respect of the gross valuation of Application 37. He then gave details of the submissions and correspondence received from both parties in relation to what should be retained and the sums and period sought in respect of LDs and the extensions of time (EOTs). He gave reasons for his decision in respect of the EOTs and the LDs, broadly setting out the submissions made by both parties. The adjudicator then considered the value of the eight changes, again setting out the submissions of the parties in respect of each change, before giving his reasons for the amounts he decided were due. Where the adjudicator decided to use his own ‘fair and reasonable’ rate, after setting out the positions of each party, he explained that he had considered the work involved in respect of each of these disputed values, using his own ‘first principles view’ of the work involved and the valuation rules in clause 5 of the contract and setting out the rate. In relation to the single remeasurement, he explained his reasons for the remeasurement and why he thought that the defendant’s calculation was wrong. Following the making of his decision, the adjudicator was asked by the defendant’s solicitors to explain the reasons for using and the basis on which he had applied ‘fair and reasonable rates’ in respect of five of the changes. In response, the adjudicator provided his workings. Still not satisfied, the defendant’s solicitors said they should have been told what he intended to do and been given the opportunity to address him as to the rates. They complained of a breach of the rules of natural justice. The adjudicator replied that he did not agree and explained that he had done what he was asked by both parties to do – namely, to decide the gross value of the Application. The defendant now defended the enforcement proceedings, alleging a breach of the rules of natural justice and failure to provide coherent reasons.
The law
The parties agreed on the applicable legal principles to be found in previous cases –19 of which were cited, as well as chapter 18 of Keating on Construction Contracts 12th Ed . [8] The judge set out the principles to be derived from the cases:
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