The claimant, Victory House General Partner, brought a Part 8 claim against a decision made by an adjudicator which was met by RGB’s application for summary judgment to enforce the adjudicator’s decision.

Victory House engaged RGB to convert and develop an existing office building into a hotel at Victory House, Leicester Square, London. Under the contract, RGB was obliged to procure a transformer or substation. Until the transformer was installed, the electrical and mechanical services could not be completed. The project fell into delay and there was a disagreement about payment. The parties entered into a short Memorandum of Understanding (“MoU”) which provided for three stage payments. Although the first two payments were made by Victory House, it refused to pay further sums requested through Application 30 made under the contract as it argued that the payment terms were now governed by the MoU. Contending that the MoU was not binding, RGB referred this dispute to adjudication. During the adjudication, RGB’s position shifted to noting that whilst the MoU was legally binding, the parties did not intend it to replace the provisions of the Contract.

The adjudicator rejected RGB’s primary case that the MoU was not legally binding and rejected Victory House’s case that the MoU superseded the Contract. The adjudicator’s decision held that the true effect of the MoU was to suspend the obligation on Victory House to make interim payments under the Contract until such time as the transformer was installed. The Application 30 was held valid, as it was made after that date, and payable as there was no valid pay less notice. Victory House said that the adjudicator’s decision as to the true construction of the MoU did not reflect an argument between the parties. Further, the adjudicator had invented a new point of construction which was central to his decision and this amounted to a material breach of natural justice.

The Deputy High Court Judge declined to grant the declarations sought by Victory House on the ground that this was not an appropriate case to bring a claim pursuant to Part 8 of the CPR as it included matters of disputed fact. The Judge disagreed with Victory House’s arguments as the parties were aware from the outset that a central question in the adjudication concerned the true and proper construction of the MoU. Referring to the Mr Justice Fraser in the case of AECOM Design Build Ltd v Staptina Engineering Services Ltd [2017] EWHC 723 (TCC), the Judge noted that a party wishing that they had put more comprehensive submissions to the adjudicator on the point he had highlighted was “not the same as there having been a breach of natural justice, still less a material breach”. It was held that the adjudicator’s decision was made against the background of having posed a specific question about the purpose, scope and effect of the MoU and Contract; a question which both parties had the opportunity to answer.