2) Natural Justice – alleged failure to consider issue: Manor Co-Living Ltd v RY Construction Ltd [2022] EWHC 2715 (TCC) before Mr Adam Constable KC The claimant MCL had appointed RYC to carry out extensive works to property in South Mimms pursuant to an amended JCT SBC 2016 Contract. In November 2021, the Contract Administrator (CA) issued a notice of default to RYC by email. In December the CA issued a letter purporting to terminate RYC’s employment for failure to remedy the specified breaches including failure to proceed regularly and diligently and to remedy defaults, pursuant to clause 8.4.2. RYC responded that MCL was in repudiatory breach because the termination was not given by the employer (as opposed to the CA), it was not properly served (via delivery by hand or by recorded, signed for or special delivery) and because MCL had previously locked RYC out of the site. MCL denied being in repudiatory breach. RYC referred to adjudication a dispute as to whether MCL had correctly served the termination notice and or complied with the requirements for termination of clause 8.4 of the contract. In the referral RYC said the question whether MCL had substantive grounds for terminating was not part of the dispute referred. In its response MCL wanted to raise precisely that issue, arguing it was entitled to terminate at common law and that the termination notice constituted acceptance of
The court must assess the ‘correct level of abstraction’ at which to consider what the adjudicator was required to decide Failure to consider a critical or fundamental element of a defence might make the decision unenforceable There was a distinction between the failure to consider a defence (which might be a breach) and considering but ·rejecting it (which was unlikely to be a breach) The distinction between a deliberate or conscious decision to exclude a defence from consideration and its inadvertent omission was relevant, but not a determinative factor. The gravity of the omission was of more importance. Tactical manoeuvring that led to an omission might be relevant but unlikely to be important. The court must look at the substance of the decision rather than its form. The court decided that it had been necessary for the adjudicator to determine whether or not MCL had successfully terminated the contract at common law in order to decide the dispute. That issue had two parts: whether RYC was in repudiatory breach; and whether MCL validly communicated its acceptance of the repudiation to MCL. It was perfectly permissible for the adjudicator to begin his determination with the second part, for if there was no acceptance then there was no need to consider the first part. When considering what would constitute the scope of the adjudication and what degree of failure on the adjudicator’s part to consider an issue would amount to a breach of natural justice, the court said:
[10] Global Switch Estates Ltd v Sudlows [2021] BL 111(TCC)
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