4) Natural Justice – Bilton & Johnson (Building) Co Ltd v Three Rivers Property Investments Ltd [2022] EWHC 53 (TCC) Judge Jason Coppel QC judgment 14 January 2022 Three Rivers appointed Bilton for refurbishment works at an industrial estate. The original contract was based on a tender prepared by Three Rivers agents. After works started The agents issued another contract to Bilton based on the JCT DB 2016 which was duly signed and returned by Bilton. There was a dispute over delays and Three Rivers entitlement to liquidated damages (LDs) for late completion. The key issue was whether the rate of LDs was £2,500 per week per section under the original contract or £2,500 per week for the whole of the works under the signed contract. The adjudicator decided the signed contract superceded the original contract. This meant Three Rivers had over deducted LDs and was liable to repay £230,000 to Bilton. He dismissed Three Rivers claim to rectification of the signed contract to restore the original LDs provisions. Bilton enforcement proceedings when Three rivers declined to pay the sum awarded alleging breach of the rules of natural justice in that: raised the present
Judgment
The judge held the adjudicator had ‘not come close’ to breaching the rules of natural justice in reaching his decision on the applicable contract terms. In the adjudication, Three Rivers had contended that the original contract was the only binding contract. Bilton had argued that the time provisions in the original contract were never binding or enforceable so it was the provisions of the signed contract which applied. The adjudicator adopted a different line of reasoning in concluding that the signed contract superceded the original contract. But the court said that line was derived if not expressly taken from the parties submissions, so did not need to be canvassed with them in advance of the decision being taken. In any case, the reasoning at this point was not material. It did not undermine the conclusion that the applicable terms were those in the signed contract. A breach of the rules of natural justice had to be material and more than peripheral. He was not obliged to consult with the parties on every aspect of his thinking. Three Rivers objection based on failure to consider the defence of rectification had an unpromising start: the Decision contained a heading “Rectification” and there followed four pages on the topic. He had fairly addressed the defence and ruled on it. He found that even if Three Rivers had been entitled to seek rectification, they had not been entitled to deduct LDs at the ‘rectified rate’ because the contract had not been rectified at the time of the deduction. Whether those reason were correct as a matter of law was irrelevant.
1.
the adjudicator’s findings as to the contract terms were not based on arguments made by either party; and
2. the adjudicator had failed to determine its the rectification defence
The decision was enforced.
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