Severance and enforceability It was held in Enviroflow that an adjudicator had no power to award legal costs under the LPCD. Benchmark said that part of the decision could and should be corrected by severance, applying Caledonian [11]. Acqua agreed that the adjudicator had made an error but in an effort to keep the £12,500 awarded, contended either the error was one of law, in which case it should be enforced regardless. Or it was an error of jurisdiction which Benchmark having failed to reserve its position had waived. Acqua also argued that as Benchmark had not made a part 8 application seeking the appropriate declaration as set down in Hutton [12], relief should be refused. Waiver HHJ Bird held that this type of error lead to a question of jurisdiction in the most fundamental sense. The adjudicator “had no jurisdiction at all because the statute under which he purported to act had no application.” Even though Benchmark had not reserved its position it could not be taken to have waived its jurisdictional objection. First, it could not be expected to reserve its positon for the reasons given in Enviroflow before that case had even been decided. Second, it was undesirable to take a view that would encourage parties to advance general reservations in respect of developing law. The judge was unpersuaded that that such a fundamental point of jurisdiction was capable of being waived. What had happened here was not a mere procedural failure. Moreover, the parties could not override a statute by agreement, still less by conduct. The court severed the portion of the decision awarding a small amount of legal costs and enforced the remainder.
the payments would be guaranteed by Benchmark's parent company (Abbey), and Acqua would carry out agreed snagging works. This was intended to be in settlement of various claims including the adjudicator’s award. The agreement was made “subject to contract”. The agreement was performed to the extent that Benchmark made a number of payments and Acqua carried out snagging works. In December 2017 Acqua sent Benchmark a settlement deed to sign. They sent it a further 5 times. Benchmark did not sign. Meanwhile payment continued to be made and snagging works carried on. In May 2018 before the final payment was made, Acqua said it wished to rely on the guarantee from Abbey. Benchmark said no guarantee would be provided. Acqua commenced proceedings to enforce the adjudicator’s decision and Benchmark resisted arguing 1) that as a result of the compromise, the decision was no longer binding; 2) the decision was unenforceable as to the legal costs Issue 1: was the compromise agreement binding? On decided principles and case law the term “subject to contract” meant that until a formal contract was made, neither party intends to be bound and each reserves the right to withdraw. Each party “took the commercial risk that one or other of them might back out of the proposed transaction…..in short a ‘subject to contract agreement is no agreement at all”[10]. The court said the fact that the agreement was acted upon on, without more, was not sufficient to indicate the parties intended to be bound. It was obvious it would be acted upon before it became binding. They had “set their own rules of engagement”. On this basis the first defence has no prospect of success.
[10] Per Lewison LJ in Generator Developments Ltd v Lidl UKGmbH [11] CaledonianModular Ltd vMar City Developments Ltd [12] See supra
Made with FlippingBook flipbook maker