Amec Capital Projects Ltd v Whitefriars City Estates Ltd

JurisdictionEngland & Wales
JudgeJudge Toulmin CMG QC
Judgment Date27 February 2004
Neutral Citation[2004] EWHC 393 (TCC)
Date27 February 2004
CourtQueen's Bench Division (Technology and Construction Court)
Docket NumberCase No: HT-04-05

[2004] EWHC 393 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Before:

His Honour Judge Toulmin CMG QC

Case No: HT-04-05

Between:
Amec Capital Projects Limited
Claimants
and
Whitefriars City Estates Limited
Defendants

Stephen Furst QC and Jane Lemon (instructed by Messrs Masons) for the Claimants

David Thomas QC (instructed by Messrs Kingsley Napley) for the Defendants

Approved Judgment

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Transcription by:

Judge Toulmin CMG QC

Judge Toulmin CMG QC:

1

This is an application by Amec Capital Projects Limited ("Amec") under Part 8 of the CPR to enforce an adjudication award dated the 17 th December 2003 made pursuant to section 108(5) of the Housing Grants Construction and Regeneration Act 1996, in which the adjudicator, Mr. Michael Biscoe, decided that the Defendant, Whitefriars City Estates Limited ("Whitefriars") should pay Amec the sum of £508,401.52, plus V.A.T. of £88,970.26, making a total of £597,371.78.

2

Mr. Biscoe also decided that Whitefriars should pay his fees and expenses, including the fees of the solicitors, Clyde & Co., who assisted him in resolving jurisdictional issues at the outset of the adjudication. This is the second adjudication between the parties relating to substantially the same subject matter, which was conducted by the same adjudicator.

3

Amec commenced the first adjudication by a referral notice dated the 7 th May 200In the first adjudication Amec also claimed the sum of £508,401.52. By a decision dated the 5 th June 2003, Mr. Biscoe ordered Whitefriars to pay Amec £508,401.52, plus V.A.T. of £88,970.26. The only difference between the order made on the first adjudication and that of the second adjudication related to the sum awarded for interest.

4

Amec had sought to enforce the first award. A number of issues were raised by Whitefriars in opposition but, on the 19 th September 2003, His Honour Judge Lloyd QC only needed to decide two of them. He refused to grant a stay of the adjudication and he refused to enforce Mr. Biscoe's decision. He concluded that the award was made without jurisdiction since, under the terms of the contract as he found it, Mr. George Ashworth (the person named in the Schedule of Amendments to the standard form contract) was the designated adjudicator. Mr. Biscoe, therefore, had no jurisdiction to act.

5

On subsequent investigation, Amec discovered that the only Mr. Ashworth at the firm identified in the contract (Davies Langdon & Everest) was a Mr. Geoffrey Ashworth, not the person named in the contractual documents, who was a Mr. George Ashworth. Mr. Geoffrey Ashworth died on the 13 th October 2003.

6

Amec then started the second adjudication. Whitefriars objected to the re-nomination of Mr. Biscoe.

7

On the 17 th December 2003, Mr. Biscoe reached his decision. This second decision is challenged in these proceedings on a number of grounds. As a result, Whitefriars say that the Court should not enforce Mr. Biscoe's award.

8

I should observe in passing that, even if Amec is successful, it will only have a preliminary decision in its favour, which can be superseded by a court or an arbitrator after a hearing on the facts. This adjudication decision does not address important issues raised by Whitefriars.

9

I am told that the costs of the two adjudications and the hearings before His Honour Judge Lloyd QC and before me have already amounted to an estimated £277,000 (excluding V.A.T.). I also observe that if either arbitration or court proceedings in this court had been commenced in May 2003, which itself is long after the events which gave rise to the claim, the parties would probably by now have had a hearing and even a decision on the merits.

Contentions of the Parties

10

It is convenient to consider the facts with the outline of the rival contentions in mind. Whitefriars say that Mr. Biscoe's second adjudication should not be enforced because:

1) Mr. Biscoe is not the adjudicator named or identified in the contract. The adjudicator who should have been nominated after the death of Mr. Geoffrey Ashworth was the person nominated by the person who was the Managing Partner or Director of Davies Langdon & Everest at the date of the referral to adjudication.

2) Mr. Biscoe's decision was reached in breach of the rules of natural justice. A fair-minded and informed observer would conclude that there was a real possibility that the adjudicator was biased in that:

a) On the findings made by Mr. Biscoe, the dispute referred to him on the second occasion was treated by him as in essence the same as that on which he had already given a decision;

b) An important part of the decision on the second adjudication related to the contractual requirements on Whitefriars in relation to the giving of notices. Mr. Biscoe had obtained legal advice on this issue in the first adjudication, which he had not disclosed to the parties in the first adjudication, but which he had carried forward into the second adjudication. An important part of the second decision relied, therefore, on outside legal advice on which Whitefriars had not had an opportunity to comment. This amounts to a defect of natural justice as well as evidence of bias;

c) In relation to his decision that he had jurisdiction to act as adjudicator in the second adjudication, Mr. Biscoe only disclosed the outside legal advice from Clyde & Co. after he had taken the decision that he had jurisdiction. Whitefriars, therefore, had no opportunity to comment on the advice before Mr. Biscoe made his decision. This also amounts to a defect of natural justice, as well as evidence of bias.

d) Mr. Biscoe had a telephone conversation with Mr. Cassidy, the Partner at Masons, acting for Amec, which went beyond merely administrative matters and may have led the fair-minded and informed observer to conclude that (no doubt inadvertently) there was a real risk that the adjudicator may have been influenced improperly.

e) There was a real risk that the adjudicator would be biased by reason of the fact that Whitefriars had notified Mr. Biscoe that, in the event that Amec did not pay the sums due, they would be looking to him to reimburse them for the costs of the first adjudication.

3) The adjudicator failed to answer the question referred to him, namely that he should determine the reasonable and proper costs incurred after termination of the contract. Instead, he determined the award on the basis of the interim payments which were due to Amec.

11

Amec disputes these claims on the following grounds:

1) The specific provisions under the contract which identified as the designated adjudicator Mr. George Ashworth, or the person nominated by the Managing Partner or Director of Davies Langdon & Everest failed either because:

a) there was no Mr. George Ashworth at Davies Langdon & Everest, or

b) the provisions did not apply after the death of Mr. Geoffrey Ashworth. Amec was entitled to apply to the RIBA for the appointment of an adjudicator.

2. a) Mr. Biscoe's appointment in the first aborted adjudication did not prevent him from coming to the second adjudication with an open mind. Although the notice of adjudication was the same in the two proceedings, the reasoning in the two awards is different, not least because Whitefriars raised objections under different clauses in the contract. In the first adjudication Whitefriars raised points under Clause 27 – interim payment provisions, and, in the second adjudication they raised points under Clause 30 – the post-termination provisions.

b) Once the first adjudication was declared a nullity, a line was drawn under it. There is no reason to believe that anything that happened in the first adjudication had any bearing on Mr. Biscoe's decision in the second adjudication.

c) The legal advice obtained on the jurisdiction issue was disclosed to Whitefriars. Their solicitors commented on it before the award was made. In any event, since the decision went to Mr. Biscoe's jurisdiction, it was only provisional since, ultimately, the decision would be made by the court.

d) It is not disputed that the adjudicator had a discussion with Mr. Cassidy. Amec says that such a discussion was purely a matter of administration and could not raise any issue of bias or breach of natural justice.

e) There was no risk that Mr. Biscoe would be biased by reason of the threat that he might be sued in relation to his conduct in the previous adjudication proceedings.

3. The adjudicator answered precisely the questions referred to him. Whether he came to the right or to the wrong conclusion is irrelevant to the enforcement of adjudication proceedings.

The Facts

12

Amec was engaged by Whitefriars to carry out certain pre-construction works and the procurement of a second stage tender in connection with the building development in Tudor Street, London, EC4. The contract took the form of a Letter of Intent dated the 18 th October 2000. It was held by His Honour Judge Lloyd QC, on the 19 th September 2003, that the contract incorporated the JCT standard form of building contract, with Contractors Design 1998 Edition with amendments, which accompanied the tender documents.

13

Instead of the default nominating mechanism provided for under the standard form, the contract provided that the adjudicator was to be "George Ashworth of Davies Langdon & Everest or, in the event of his unavailability, the person nominated by him".

14

Amec carried out the pre-construction services and, on the 1 st...

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