Adjudicator Can Sue For Fees Kitt and another v The Laundry building Ltd and another [2014] EWCH 4250 (TCC)

In Kitt and another v The Laundry building Ltd and another [2014] EWCH 4250 (TCC) Akenhead J in the Technology and Construction Court has held that an adjudicator could sue the referring or responding party for his fees and expenses.

The parties had entered into a tripartite agreement with the adjudicator when he was appointed. The adjudicator's decision ordered the referring party (Etcetera Construction Ltd) to pay his fees of £11,800 plus VAT, but it refused, arguing that the decision was unenforceable because the adjudicator had exceeded his jurisdiction or breached the rules of natural justice. The adjudicator subsequently started court proceedings against the responding party (The Laundry Building Ltd) to recover his fees. In turn, the responding party brought a Part 20 claim against the referring party. The court ordered the responding party to pay the adjudicator's fees and ordered the referring party (the Part 20 defendant) to reimburse it.

This outcome is unsurprising as it is settled law that parties are jointly and severally liable for adjudicators' fees (provided they both participate in the adjudication). Also, here there was a contractual liability because of the tripartite agreement. The court said the principles in PC Harrington Contractors Ltd v Systech International Ltd [2012] EWCA Civ 1371 were not engaged.

Interestingly, when deciding that the adjudicator had jurisdiction, the court held that a referring party cannot seek to "circumscribe and delineate the dispute" in a notice of adjudication so as to exclude particular defences. To do so would be "illogical and untenable, if not ludicrous". This supports the view that a responding party can raise any defence in adjudication. Finally, the court rejected the suggestion that the parties should have complied with the TCC's pre-action protocol, as it would not have resolved such a modest claim when the referring party was determined not to pay.

Significant costs decision in TCC Savoye and Savoye Ltd v Spicers Ltd [2014] EWCH 4195 (TCC)

In Savoye and Savoye Ltd v Spicers Ltd [2014] EWCH 4195 (TCC) Akenhead J in the Technology and Construction Court (TCC) has enforced an adjudicator's decision, holding that the parties' contract for the installation of an industrial conveyor belt system was a construction contract for the purposes of sections 104 and 105 of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996).

Although dependant on its facts, this judgment may interest practitioners because the court:

  • Suggested that authorities from the law of real property relating to fixtures are not "incorporated lock, stock and barrel" into the Construction Act 1996 when determining whether something "formed... part of the land" (paragraph 24, judgment).
  • Considered detailed evidence on whether the conveyor system was attached to the floor of the warehouse (it was, by more than 2,000 bolts).
  • Had previously declined to order summary judgment to enforce the adjudicator's decision in favour of the claimant, on the basis that there was an issue to be tried in connection with whether this was a construction contract.

The judgment refers to numerous old authorities unrelated to the Construction Act 1996. This may make it valuable to a party with a similar dispute. For others, it demonstrates a potential advantage in avoiding satellite litigation about whether a contract is a construction contract, by agreeing to use adjudication (as a contractual right) if their contract sits in a grey area.

Enforcement of Adjudicator’s Decision  Malcolm Charles Contracts Ltd v Crispin and another [2014] EWCH 3898 (TCC)

In Malcolm Charles Contracts Ltd v Crispin and another [2014] EWCH 3898 (TCC) HHJ Carr DBE in the Technology and Construction Court (TCC) has enforced an adjudicator's decision arising out of the adjudication scheme operated by RICS, RIBA and the National Specialist Contractors Council (NSCC), which is referred to in the standard form, JCT Building Contract for a Home Owner/Occupier, 2005 Edition (HO/C 2005). (Residential occupiers are excluded from the statutory adjudication scheme under section 106 of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996).)

In a fact-specific judgment following a full trial of the enforcement application, the court held that the parties had, on any objective view, entered into a contract on the HO/C 2005 form. This meant the parties had an adjudication agreement, which gave the adjudicator jurisdiction to reach his decision that the contractor (Malcolm Charles Contracts Ltd) was entitled to damages of just under £105,000, representing costs thrown away and loss of profit resulting from the cancellation of the building contract.

While the court applied usual principles related to contract formation, it is a reminder that residential occupiers must be careful when negotiating with contractors, especially if, as here, they are represented by a professional who will act as their contract administrator. If the home owners had not intended to be bound contractually until there was a signed document, they should have ensured the negotiations were stated to be "subject to contract". 

Liability on a Building Contractor without Contractual Relationship Rendlesham Estates Plc and others v Barr Ltd [2014] EWHC 3968 (TCC)

In Rendlesham Estates Plc and others v Barr Ltd [2014] EWHC 3968 (TCC) Edwards-Stuart J in the Technology and Construction Court (TCC) has found a building contractor liable to apartment owners under section 1 of the Defective Premises Act 1972 (DPA 1972).

Much of the court's judgment was fact-specific. However, it also considered points of principle concerning the DPA 1972, giving guidance on what:

  • Constitutes a "dwelling".
  • "...in connection with the provision of a dwelling" means.
  • Constitutes fitness for habitation.

The judgment illustrates how the DPA 1972 can impose liability on a building contractor without the need for a contractual relationship with the owner or occupier of a dwelling. In doing so, it helps clarify the existing law, especially in relation to buildings with shared or common parts. It also touches on the appropriate measure of damages for such buildings. However, it does not radically extend the application of the DPA 1972.

Dispute resolution lawyers may be interested to note that the court considered whether the apartment owners could bring their claim as a representative action under CPR 19.6. The court concluded that they could not, because they did not share the same interest in the proceedings.