Amec Capital Projects Ltd v Whitefriars City Estates Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Dyson,Lord Justice Chadwick,Lord Justice Kennedy |
| Judgment Date | 28 October 2004 |
| Neutral Citation | [2004] EWCA Civ 1418 |
| Docket Number | Case No: A1/2004/0558 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 October 2004 |
[2004] EWCA Civ 1418
Lord Justice Kennedy
Lord Justice Chadwick and
Lord Justice Dyson
Case No: A1/2004/0558
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Toulmin CMG QC
HT 0405
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Stephen Furst QC (instructed by Messrs Masons) for the Appellant
Mr David Thomas QC (instructed by Messrs Kingsley Napley) for the Respondent
Introduction
This appeal raises questions of alleged bias and procedural unfairness by an adjudicator appointed to determine a dispute in relation to a construction contract referred to him under the Housing Grants, Construction and Regeneration Act 1996 ("the 1996 Act") .
The facts
Pursuant to a letter partly contained in what was described as a "letter of intent" dated 18 October 2000, AMEC Capital Projects Ltd ("AMEC") was engaged by Whitefriars City Estates Ltd ("Whitefriars") to carry out certain pre-construction works and the procurement of a second stage tender in connection with a building development in Tudor Street, London EC4. The contract incorporated the JCT Standard Form of Building Contract with Contractors Design, 1998 Edition with amendments. It provided for reference of disputes to an adjudicator. The relevant contractual provisions were as follows:
"39A.2 The Adjudicator to decide the dispute or difference shall be, on the application of either Party, either
the individual with whom the Parties have executed the "JCT Adjudication Agreement for an Adjudicator Named in a Contract" (being the individual named as the Adjudicator in Appendix 1 or a person nominated by him), or
where no such agreement has been executed, the individual named as the Adjudicator in Appendix 1,
or in the event of his unavailability a person nominated by him, or
the individual with whom the Parties have executed an Adjudication Agreement pursuant to clause 39A.3. Provided that
.2.1 where either Party has given notice of his intention to refer a dispute to adjudication then any application to the person named as the Adjudicator in Appendix 1 or any agreement or nomination under clause 39A.3 must be made with the object of securing the appointment of, and the referral of the dispute or difference to, the Adjudicator within 7 days of the date of the notice of intention to refer.
.2.2 upon receipt by the Parties, from the individual named as the Adjudicator in Appendix 1, of confirmation of his availability or of the name of the person nominated by him the Parties shall thereupon execute with that individual or that person as the case may be the "JCT Agreement for an Adjudicator Named in a Contract."
39A.3 If the Adjudicator dies or becomes ill or is unavailable for some other cause and is thus unable to adjudicate on a dispute or difference referred to him then
.1. either Party may apply to the individual named as the Adjudicator in Appendix 1 to replace the Adjudicator to adjudicate that dispute or difference save that
.2. if the individual named as the Adjudicator in Appendix 1 is unavailable then either Party may apply to the partner or director who is managing (for the time being) the practice of such named individual
and the Parties shall execute the JCT Adjudication Agreement with the replacement Adjudicator. Provided that if the Adjudicator has executed with the Parties the "JCT Agreement for an Adjudicator Named in a Contract" and he is unable by reason of illness or other cause to adjudicate on a dispute or difference referred to him any appointment under clause 39A.3 shall not terminate the Adjudication Agreement of that individual with the Parties."
Appendix 1 provided that:
"the Adjudicator will be George Ashworth of Davis Langdon & Everest, or in the event of his unavailability a person nominated by him."
AMEC carried out the pre-construction services and on 1 May 2001 was given possession of the site. It submitted its second stage tender in June. The tender figure was the subject of negotiations, but the parties were unable to agree on a price. In the result, on 31 July 2001 Whitefriars terminated the contract and appointed a replacement contractor. AMEC had by this time submitted invoices dated 26 March for £204,000 (which had been paid), 17 April for £97,000 and 18 June for £414,629.41. The last two invoices have never been paid. On 10 October, it submitted a draft final account in the net sum of £508,401.52 (exclusive of VAT and interest) .
On 23 April 2003, AMEC's solicitors gave notice of adjudication pursuant to clause 39A of the contract in respect of its claim for £508,401.52 plus VAT and interest. Mr Michael Biscoe of Biscoe Associates was appointed as adjudicator by the Royal Institute of British Architects ("RIBA") pursuant to the machinery for the selection of adjudicators provided by para 2(1) (c) of the Scheme for Construction Contracts ("the Scheme") annexed to the 1996 Act. On 5 June, he issued his reasoned decision that Whitefriars should pay the principal sum claimed plus VAT of £88,970.26 and interest in the sum of £120,513.44, making a total of £717,885.22. AMEC commenced enforcement proceedings. Whitefriars resisted the claim on a number of grounds which included (i) that Mr Biscoe had no jurisdiction because he had not been appointed in accordance with the terms of the contract and (ii) that he had acted in breach of the rules of natural justice.
On 19 September 2003, His Honour Judge Humphrey LLoyd QC decided that para 2(1) (c) of the Scheme was not applicable, and that, in accordance with Appendix 1, the adjudicator should have been "George Ashworth of Davis Langdon & Everest, or in the event of his unavailability a person nominated by him". Accordingly, Mr Biscoe had no jurisdiction and his decision was a nullity. The judge did not need to, nor did he, decide the other issues that had been raised by Whitefriars.
On 31 October, AMEC's solicitors served a second notice of adjudication on Whitefriars in respect of the claim for £508,401.52 plus VAT and interest. They wrote:
"As previously advised to your solicitors, Kingsley Napley, there is no George Ashworth at Davis Langdon & Everest and so, the terms incorporated into the contract fail to provide a mechanism that will allow our client to appoint and instruct an adjudicator in accordance with section 108(2) (b) of the Act. The only Mr Ashworth who could be identified at Davis Langdon & Everest was a Geoffrey Ashworth who sadly died a few weeks ago.
In the circumstances, as a result of section 108(5) the Act, the adjudication conditions of the contract are void and therefore, the adjudication provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1999 ("the Scheme") apply.
Pursuant to paragraph 2(c) of the Scheme and in compliance with section 108(2) of the Act, we hereby inform you that we will be applying forthwith to the President of the Royal Institute of British Architects ("RIBA") to nominate an adjudicator."
On the same day, they wrote a letter to the RIBA in which they summarised the history of the first adjudication and the decision of Judge LLoyd QC and applied for the appointment of an adjudicator. The letter stated:
"Given that our present application is in relation to the same dispute and bearing in mind that RIBA nominated Mr Biscoe as adjudicator and he made a decision thereon, we suggest that in the interests of saving time and costs, it makes sense that Mr Biscoe be nominated again"
Mr Biscoe was duly nominated. He accepted the nomination and following the service of a Referral of Adjudication, a Response, Set-Off and Counterclaim and a Reply, he issued his second decision on 17 December. He decided that Whitefriars was obliged to pay the net sum claimed plus VAT and interest. Whitefriars failed to honour this decision. AMEC issued enforcement proceedings for a second time. Whitefriars defended the claim on the grounds that (a) upon the true construction of the contract, the adjudicator should have been nominated by the partner managing Mr Ashworth's practice and not pursuant to the Scheme; and (b) Mr Biscoe's decision was void since he had committed several breaches of natural justice. On 27 February 2004, His Honour Judge Toulmin QC dismissed the claim. He held that AMEC had applied the correct contractual machinery for the appointment of the adjudicator so that Mr Briscoe had the requisite jurisdiction, but he decided that there had been breaches of the rules of natural justice sufficient to invalidate the decision. AMEC appeals with the permission of Potter LJ. Whitefriars has served a respondent's notice seeking to uphold the judge's decision on the grounds that the AMEC had followed the wrong contractual machinery, and that Mr Biscoe's decision was therefore void on the grounds of want of jurisdiction.
The jurisdiction point
It is common ground that the "George Ashworth" was a misnomer for "Geoffrey Ashworth", and that the reference to "George" should be understood as being a reference to "Geoffrey". Geoffrey Ashworth had been a partner of Davis Langdon & Everest but he had died on 13 October 2003. Mr Thomas QC submits that the death of Mr Ashworth did not result in a breakdown of the clause 39A machinery for the appointment of an adjudicator. He says that on the death of Mr Ashworth, clause 39A.3.2 applied. Upon his death he became "unavailable" and AMEC should have applied for the appointment of an adjudicator to the partner or director who for the time being was managing Mr Ashworth's...
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