Broughton Brickwork Ltd v F Parkinson Ltd

[2014] EWHC 4525 (TCC)

This was an application to enforce a decision of an Adjudicator, who decided that Parkinson should pay BBL £96k. Enforcement was resisted on the grounds there had been a real and a serious breach of natural justice. As put by Parkinson this was:

“a case where something has genuinely gone seriously wrong, and where what has occurred was not rough justice, which…cannot prevent a decision being enforced, but no justice at all.”

There were two specific points. First, that the Adjudicator had decided a particular point which was of considerable importance to the determination of the dispute on a basis that was not the way in which the parties had argued it, and without first giving the parties the opportunity to comment. Second, that in deciding that point the Adjudicator had inadvertently failed, to address a particular document which had been placed before him and which, had he considered it, would have led to his reaching a different conclusion.

BBL said that there was no breach of natural justice at all, let alone a real or a serious breach. The Adjudicator was not just entitled but required to decide the point that he did, and there was no need for him to revert to the parties before doing so. Further, the inadvertent error in not seeing and, therefore, not considering the particular document was largely contributed to, if not wholly caused, by Parkinson’s own conduct and also was no more than a mere procedural error which did not invalidate the decision.

HHJ Davies QC said that he was satisfied that BBL had made an error during the adjudication which caused, or at least materially contributed to, the problem that subsequently emerged. That error was threefold: (i) the failure specifically to assert in the body of the response that pay less notice 14 was, in fact, served by email as opposed to any other means; (ii) the failure in the body of the response specifically to draw to the Adjudicator’s attention the existence or relevance of the email; (iii) the misnumbering of the page references, so that if the Adjudicator was looking for himself for evidence in relation to service of pay less notice 14 they would naturally look at page 184 onwards rather than to page 183.

On receipt of that decision BBL’s solicitors communicated their concern about the failure to refer to the email to the Adjudicator. He replied that, having checked the hard copy documents in his possession, he found that page 183 was loosely adhered to the preceding page 182. He had not seen it when making his decision, since he used the hard copy documents rather than the electronic versions with which he had also been supplied. He also said that as the pay less notice did not indicate on its face that it was sent by email and because he did not see the e-mail, it had appeared that the letter had been sent by post only in the same manner as the two previous pay less notices, which is why he had concluded that it was served late. The Adjudicator considered that he had no jurisdiction to correct that error, and he went on to say that:

“Had I seen document 183 then Broughton’s claim would have failed because a subsequent valid pay less notice had been served, but it appears to me that I do not have the power to correct the reasoning in my decision thereby resulting in a different outcome.”

As the Judge said, an adjudicator is entitled to make mistakes, whether of fact or law, even ones which are fundamental, without rendering his decision unenforceable, so long as he acted within his jurisdiction. The Judge considered that in principle an inadvertent error might suffice to do this, if it was sufficiently serious. However, that said, the question as to why the breach occurred will usually be a material consideration. If it was deliberate that might justify a conclusion that there was a breach, whereas if it was inadvertent then that might be less likely to produce that result.

The Judge accepted that the failure to have regard to the email at page 183 could properly be categorised as a procedural error, in the sense that it was a document put before the Adjudicator which he did not consider. However it was plainly not a deliberate decision on his part to disregard it. The Judge also felt that it was difficult to be critical of the adjudicator. It was, in the Judge’s view substantially Parkinson’s fault that it had not drawn the existence or the importance of this document to the Adjudicator’s attention. Thus he could not be criticised for not “trawling” through the totality of the documents before him to decide whether or not pay less notice 14 had been served on time.

Therefore the Judge did not consider that the Adjudicator’s approach was one which amounted to a serious breach of the rules of natural justice, or rendered the adjudication process obviously unfair. It was from BBL’s point of view a decision which was wrong, due to an inadvertent procedural error caused or substantially contributed to by the defendant itself. The Judge concluded:

“I accept that this may leave the defendant with a sense of injustice but that, I am afraid, is part of the rough and ready nature of the adjudication process. It is an interim remedy, it provides and it is intended to provide a decision in relation to cash flow which can, of course, if wrong be put right in later legal proceedings so as to put right any real injustice.”