Hart Builders Ltd v Swiss Cottage Properties Ltd

[2022] EWHC 1465 (TCC)

Hart made an application under Part 8, seeking, amongst other issues, a declaration that a decision of an adjudicator was wrong and no longer binding upon the Parties. 

The  Adjudicator had decided that the matter at issue between the Parties had been settled by an Acceptance Agreement. The Judge decided that the Adjudicator was mistaken. Was Hart, therefore, entitled to launch a fresh adjudication? SCP said they could not, because of the effect of Paragraph 9(2) of the statutory scheme, which prevents two adjudications about the same dispute. 

The Judge was of the view that, on the issue upon which the Adjudicator based their Decision, although wrong in law, was not a nullity. However, as a result of the conclusion reached, the Adjudicator declined to determine the amount(s) due as between the Parties. Did this prevent the financial dispute now being determined in a fresh adjudication? The Judge referred to the 4th Edition of Coulson on Construction Adjudication: 

“If the dispute is the same or substantially the same as one which has previously been referred to adjudication, and a decision has been taken in that earlier adjudication, then paragraph 9(2) is unequivocal: in such circumstances, the adjudicator must resign. Doubtless as a result of this finality, there have been a large number of reported cases in which the responding party has sought a declaration or a finding that the adjudicator should have resigned and that, in consequence, he had no jurisdiction to give the decision that he did …

“Perhaps unsurprisingly, the majority of the reported cases dealing with what might be called attempted readjudication demonstrate a general desire to find that the disputes in question were not the same or substantially the same …”

In Hitachi Zosen Inova AG v John Sisk & Son Ltd [2019] EWHC 495 (TCC), Stuart-Smith J considered a similar case:

“The referred dispute in the eighth adjudication was the valuation of Event 1176. That was precisely what the adjudicator declined to decide in the second adjudication, for want of substantiating evidence at that time. The dispute referred to in the eighth adjudication was, therefore, not the same as the dispute in the second adjudication.

“In my judgment, the dispute referred to in the eighth adjudication was also not ‘substantially the same’ as the dispute decided in the second. It is important to bear in mind that the comparison to be made is between what was referred in the eighth adjudication and what was decided in the second. Once it is recognised that there was no valuation decision at all in the second adjudication, it become clear that, in the matter of the value to be attributed to and recovered for Event 1176, there is no overlap at all …”

In the case here, there were two issues before the Adjudicator: (1) did the Acceptance Agreement mean that they could not enter upon the merits of the Clause 8.7.4 assessment? (2) If not, what decision should be reached in respect of that assessment?

Because of the decision reached on issue (1), the Adjudicator did not make any decision on issue (2). 

Therefore, now that the decision on issue (1) had been held to be wrong, a second adjudicator was free to decide issue (2) on its merits.

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