Category Archives: Infrastructure

Insufficient reasons given to forego Environmental Impact Assessment

In developments for which pre planning Environmental Impact Assessments (“EIAs”) are not necessarily mandatory, ‘Screening’ is a procedure used to determine whether a proposed project is likely to have significant effects on the environment such as to require an EIA (“EIA” development”).

In England regulation 4 (7) of the Town and Country Planning (Environmental Impact Assessment) Regulations 2011 provides that where a local planning authority adopts a screening opinion:

“…that opinion … shall be accompanied by a written statement giving clearly and precisely the full reasons for that conclusion.”

In Wales the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 continue to apply until 16 May 2017. The obligation to give reasons under regulation 4(6) of the 1999 Regulations only applies where the local planning authority adopts a screening opinion to the effect that “the development is EIA development.”

So currently in Wales, the Regulations require reasons to be given if the planning authority decides that the proposed development is EIA development, but those Regulations do not require reasons to be given if it is decided that the proposal is not EIA development.

However, whatever the position under UK Law, there is a duty to give reasons for a screening opinion that no EIA is required as a matter of EU law. That results from the decision of the European Court of Justice in (Case C-75/08) R (Mellor) v Secretary of State for Communities and Local Government [2010] which was a decision on Directive 85/337.

In the Court of Appeal Welsh wind farm Case of Jedwell v DH & Anor [2015] planning permission was challenged because the Council’s screening opinion gave no apparent consideration to whether an EIA would be required based on the development’s cumulative impact with other existing and proposed developments. The Council’s screening opinion did not inform the reader as to how the Council reached their screening opinion that no EIA was required.

The court agreed that what the Council said in the screening decision was simply the statement of a conclusion. It contained no reasoning. A reader of the opinion would not ascertain why it had arrived at it. It was inadequately reasoned.

The Council should have demonstrated that it had “actually determined” whether an EIA assessment was needed in accordance with the law.

For that it needed to demonstrate that it had applied its own mind to the relevant questions.

The Council’s reliance on the views of consultees was misplaced especially as most of the consulting took place after the screening opinion was adopted.

Did the planning officer consider that there was no cumulative impact?

Did she consider that there was some cumulative impact but that it was unlikely to be significant?

Was a neighbouring proposed scheme considered, or was it ignored or played down on the basis that no application had been made for that scheme yet?

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Adjudication: Linked issues formed single dispute

In Whitney Town Council v Beam Construction (Cheltenham) Ltd [2011] Akenhead J gave guidance as to one way of identifying whether or not two separate disputes had been invalidly referred to an adjudicator:

“A useful if not invariable rule of thumb is that if a disputed claim No 1 cannot be decided without deciding all or part of disputed claim No 2, that establishes such a clear link and points to there being only one dispute.”

In that case a claim for a final account and a claim for the financial consequences of termination were ruled part of a single dispute.

In Wycombe Demolition Ltd v Topevent Ltd [2015] an adjudicator awarded £113,666.63, with interest and his fees and expenses due from the employer (“Topevent”) to the claimant contractor (“Wycombe”).

Topevent complained that the adjudicator had no jurisdiction because more than one dispute was referred to him. The adjudicator was addressing both the issue of valuation and, what they said, were separate issues arising out of the termination/cessation of the works, and that they were two entirely separate disputes.

The High Court said it was plain from the Notice of Adjudication that the dispute between the parties concerned the outstanding payment due to Wycombe, following the cessation of works on site.

That payment was made up of a number of elements, including both the value of variations, and the financial consequences of termination and demobilisation.

There was a claim for one final payment comprising all outstanding sums, including the £4,000, for “wrongful termination of contract.” Wycombe wanted one final payment so as to be able to close their books on this contract. That could only be achieved if the adjudicator addressed all their outstanding claims. So there was a clear link between their rejected claim for the cost consequences of the “wrongful termination”, and the overall claim for all sums outstanding. They were not separate disputes.

Secondly Topevent’s representative had written a letter saying that the valuation of Wycombe’s work could not be carried out properly unless the amount of incomplete work was taken into account. That letter made a direct link between those two issues.

Accordingly, both elements of the claimed payment were part of a single dispute. They were simply different components of the total sum in dispute.

Even if there were two separate disputes paragraph 11.1 of the TecSA Rules which were the basis of the adjudicator’s appointment made it clear that the adjudicator could deal with “any further matters which all Parties agree should be within the scope of the Adjudication”.

The disputes concerned with the valuation of the work, and the dispute about termination, were addressed without qualification by both parties during the adjudication.

Indeed, Topevent’s counterclaim of approximately £180,000 was based on the latter. But Topevent had never suggested that the termination dispute should not be dealt with in the adjudication. In fact, they wanted it so decided.

So if were two separate disputes, Topevent’s acquiescence in, and failure to object to, the adjudicator dealing with both disputes, gave him the necessary jurisdiction anyway.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Construction: paperwork not clear enough to amount to interim payment applications

In the High Court case of Caledonian Modular Ltd v Mar City Developments Ltd [2015], the defendant denied liability for any part of the amount awarded by an adjudicator. The adjudicator’s decision turned on the date on which the claimant had notified the defendant of the sum due under the letter of intent for the construction project.

On the claimant’s view, the relevant interim payment application was made on 13 February 2015. If that was right, it was common ground that the defendant’s payless notice of 25 March 2015 was out of time and invalid.

But the defendant said that the documents of 13 February were not a claim for or notice of the sum due for payment, and that the claimant’s claim was not made until 19 March 2015. If that view were correct, it was common ground that the defendant’s payless notice of 25 March would be within time and would have provided a complete defence to the claimant’s claim.

If the documents of 13 February did not constitute a fresh application for an interim payment, or a valid payee’s notice no further sums were due from the defendant to the claimant and the adjudicator had been wrong to conclude to the contrary.

The court said:

1. Neither the covering email of 13 February 2015, nor the three documents enclosed with it, stated that they were a new application for an interim payment. The documents said variously that they were a ‘final account application summary’ and an ‘updated account’.

2. A later invoice of 19 March 2015 did not say that it was in any way a default payment notice or that the payee’s notice had originally been provided on 13 February 2015. If that had been the claimant’s position, they would have said so in clear terms.

3. In between the email of 13 February and the invoice of 19 March, the defendant expressly asked the claimant what the 13 February documents were. Unsurprisingly, the defendant was confused as to what, if anything, they were supposed to do with those documents. The claimant’s explanation did not even begin to suggest that the documents of 13 February were in fact an entirely new interim application, or that a fresh claim had been made less than a fortnight after the last, in the middle of the month and not at the month’s end.

In all three documents that the claimant relied on as being applications for interim payment, the claimant had had the opportunity to say clearly that those documents were what they now said they were, namely a new application for an interim payment and/or a payee’s notice, but the claimant failed to do so.

This omission was significant. It suggested that the claimant’s case now, that the documents were in fact a fresh claim, was “something of an afterthought.”

The only other alternative explanation was that the claimant believed that it was in its best interests to be “studiedly vague” about the nature of the documents, so as to set up precisely the argument they advanced successfully in winning the adjudication.

On any view, if they intended to serve a valid payee’s notice on 13 February, they could and should have said that that was what they were doing.

They were even asked a question which, if that had indeed been their intention, required only that simple answer. It was not provided.

Accordingly, the court granted a declaration that the documents of 13 February 2015 were not a valid application for an interim payment, or a valid payee’s notice and that no sums were due in consequence of the adjudication.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Council estopped from saying compulsory purchase claim time barred

A claim for compensation for compulsory purchase is subject to the 6 year time limit in the Limitation Act 1980 but when does that time limit run from?

In the High Court case of Saunders v Caerphilly County Borough Council (2015) the claimant argued that the 6 years only started when the Lands Tribunal quantified the award.

But the authority successfully argued that it ran from them giving notice to enter as that triggered the right to “compensation to be awarded by the Lands Tribunal”.

However the court found that the authority was bound, in fairness, by the doctrine of estoppel not to hold the claimant to the time limit.

Historically the claimant had in fact applied to the Lands Tribunal in time but the authority had prevailed on the claimant to withdraw that application based on certain assurances about the claimant’s compensation claim being entertained.

A letter from the authority’s head of legal services in 2008, was clear indication that if the outstanding points were not agreed, they would be referred to the Lands Tribunal. Implicit in that communication was that no limitation point would be taken.

Moreover the authority suggested that the parties should continue to negotiate and that commencing proceedings at that stage would serve no productive purpose.

That was the basis upon which negotiations carried on until 2012, when the authority firstly raised the limitation issue and reserved its rights in respect of it.

Thereafter, the claimant had been entitled to a reasonable time to consider his position, and instruct new solicitors.

So the court ruled that the claim should be admitted out of time.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

VAT: University building was extended rather than continued so no zero rating

Section 30(2) of Value Added Tax Act 1994 (“VATA”) provides that a supply of goods or services is zero-rated if the goods or services are of a description for the time being specified in Schedule 8 VATA.

Item 2 in Group 5 of Schedule 8 VATA specifies:

The supply in the course of the construction of:—

(a) a building … intended for use solely for … a relevant charitable purpose …

of any services related to the construction other than the services of an architect, surveyor or any person acting as a consultant or in a supervisory capacity.

Note 16 to Group 5 provides as follows:

For the purpose of this Group, the construction of a building does not include:-

(b) any enlargement of, or extension to, an existing building …”

In the First-tier Tribunal (Tax) case of York University Property Company Ltd v Revenue & Customs [2015] it was decided to build a chemistry building in two phases due to an initial lack of funds to complete the whole building. At the time phase 1 was completed, it was not known when phase 2 would be completed.

Phase 1 was a three-storey building shaped like a rectangle, with a sacrificial wall on one of its short sides.

A donation was made to the University, in 2010, enabling phase 2 to be completed. The University wanted the phase 2 works to be zero rated for VAT.

Phase 2 was in the same style and was of similar size and shape to phase 1, and was joined to phase 1 where the sacrificial wall previously stood.

Following completion of the phase 2 works, there was one single three-storey rectangular building that was double the length of the phase 1 construction. Without looking closely at the building it would now be impossible to tell that the two parts of the building were constructed at different times.

There was no disagreement between the parties that both the phase 1 and phase 2 works related to “a building … intended for use solely for … a relevant charitable purpose” within the meaning of this provision, and HMRC accepted that the phase 1 works fell to be zero-rated on that basis.

Of the precedent cases there had been only one where a second phase of works was found to be a continuation of the original development rather than an extension to a completed building.

The tribunal said the fact that the phase 1 construction contained a sacrificial wall in anticipation of the phase 2 works was of marginal relevance.

In one of the precedent cases the first phase single storey wing included foundations and steel beams of sufficient strength to support the additional storey to be added in phase 2, but this had not affected the tribunal’s conclusion that it was an enlargement of an existing building rather than a continuation.

The only precedent case at all supportive of the University’s argument, that phase 2 was a continuation, was different as it had rested on the finding that the kitchen and laundry block built in the second phase (included in the planning consent) was integral to the development, in that the hospital could not function without it. There had been only an 18 month gap between completion of the first phase and the commencement of the second phase. Moreover, in that case the Commission for Social Care Inspection had required that the kitchen and laundry facilities be built, and had granted an extension of time for that to be done.

In this case the Chemistry Department’s vision could not be achieved until phase 2 was completed, but there was no suggestion that the phase 1 construction could not function and be used for chemistry research until phase 2 was completed.

Phase 1 did so function, as did the Chemistry Department as a whole, for some 9 years until phase 2 was completed in 2013.

Phase 1 could have continued to so function indefinitely, without phase 2. There was no suggestion that any public authority required phase 2 to be completed within any stipulated timeframe, or at all.

So phase 2 of the building was, for purposes of Item 2 in Group 5 of Schedule 8 VATA, an enlargement of or extension to phase 1, rather than a continuation of the original development of the building and so not eligible for zero rating.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Compulsory Purchase: Valuation of land in a notional “No Scheme” World

The valuation of land that is acquired for development under a Compulsory Purchase Order (“CPO”) (“the subject land”) must ignore any increase or diminution in the value of that land which is attributable to the development of any other land which is also acquired for development under that CPO that would not be likely to have been carried out but for that CPO.

This is to exclude from calculating compensation, increases or reductions in value attributable to the scheme involving the compulsory purchase.

This is based on the principle in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947].

To apply these rules of valuation, you must first determine the existing planning status of the subject land.

Sections 14-16 of the Land Compensation Act 1961 (“the 1961 Act”) contained a series of assumptions about planning permission which had to be made for the purpose of valuing the subject land in assessing compensation.

These assumptions were additional to any actual planning permission in force (s.14(2)) and did not exclude “hope value” based on the prospect of permission for a development beyond the developments for which planning permission was to be assumed under sections 15 and 16 (section 14(3)).

Section 15 assumed that permission for development was granted in accordance with the acquiring authority’s proposals and the same assumption was made under sections 16(1)-(3) if the subject land formed part of the site to be developed in accordance with the then current development plan.

In each case section 16(6) of the 1961 Act required the valuation to assume that planning permission would be granted subject to such conditions as might reasonably be expected to be imposed.

The fact that these sections assumed a planning permission being in place did not mean it was to be assumed that permission for some other kind of development would not be granted. Expert evidence would help decide that in each case.

But section 16(7) operated to limit the extent to which planning permission for the subject land was to be assumed to be granted by creating a fiction in which the overall redevelopment scheme had been cancelled in respect of, but only in respect of, the subject land: i.e. as if the landowner had succeeded at the public inquiry in persuading the Inspector to omit the subject land from the CPO.

But there was no requirement to assume that the CPO would not have gone ahead in respect of the remainder of the CPO land or that the development of the scheme would not have proceeded without the subject land.

Section 16(7) was not a valuation disregard, but it was part of the valuation process. It might in some cases have required the assumption that planning permission for the relevant development would not be granted. There would be cases, such as roads and other linear transport proposals, where the notional exclusion of the subject land might have required it to be assumed that the scheme would not have gone ahead.

In J S Bloor (Wilmslow) Ltd v Homes and Communities Agency [2015] the owner of the subject land would have perceived himself to be in a relatively strong position with regards to having to make or avoiding contributions to the loop roads and other service connections under the redevelopment scheme (“the KBP Scheme”). The land would therefore have a substantial value based on an expectation of planning permission for a residential development linked to a proposed spine road.

But such value would all have been attributable to the development of the KBP Scheme on the adjoining land and would therefore fall to be disregarded.

The Court of Appeal found that any value due to a possible self contained development of the subject land, independent of the KBP Scheme, and using a nib of its own land for highway access was not attributable to the KBP Scheme on the adjoining land so as to require it to be disregarded under section 6 of the 1961 Act. But in seeking to exclude any diminution in value attributable to that development it was necessary to make a notional adjustment to the planning policies which continued to apply to the subject land at the valuation date.

This was because, in the imaginary planning environment conjured up by sections 14-16 of the 1961 Act, the KBP scheme would severely diminish the planning prospects for an independent development on the subject land. So the task for the valuers and the tribunal had to be to devise a way of excluding or disregarding the KBP Scheme’s impact on that independent value. That could only be done by further modification to the actual planning situation whereby the valuers assume that the KBP scheme and its supporting policies were no longer in place.

The real issue was whether the tribunal had struck the balance, between the “no KBP scheme universe” and the actual planning position, in the right place.

It was not simply a matter of watering down the strict application of the existing and emerging development plan but otherwise leaving the allocation for development of the subject land in place.

What the tribunal should have done was to consider the planning potential of the subject land without regard to the KBP Scheme and it’s underlying policies (policy EC/6 and developing policy EC/7) and therefore its effect on value.

The effect of section 6(1) was that the tribunal needed to consider what wider planning policies (which were not specific to the scheme) would have been likely to have applied in a “no KBP Scheme world”, including in particular PPG3, and to have assessed whether there was any real chance of planning permission being granted for an independent residential development of the subject land under those policies. That approach would have struck the appropriate fair balance between the general public interest and the individual interest as was required under the 1961 Act.

The assumption that policy EC/6 and developing policy EC/7 continued to apply was based on a wrong application of section 6(1) of the 1961 Act and the valuation calculated on that basis must be set aside.

Since the valuation date in this case the relevant provisions of the 1961 Act have been replaced and re-cast by the provisions of the Localism Act 2011.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Construction: availability of adjudication depends on nature of dispute not nature of remedy claimed

A claim for restitution can exist where there is no contract. There may be no contract because there was never agreement on the price. There the basis for claim is usually “unjust enrichment”. That is a different cause of action from breach of contract.

In a contractual dispute, where there has been a total failure of consideration, a party may recover the sums he has paid – as a claim for restitution instead of damages. In short the claim would be “for restitution”, but, would be based, not on unjust enrichment, but on “a total failure of consideration amounting to a breach of contract”.

In ISG Retail Ltd v Castletech Construction Ltd [2015], ISG Retail Ltd (“ISG”), had made an advance payment to Castletech Construction Ltd (“CC”) of £35,000 plus VAT. In return CC had provided nothing of value to ISG, so that, in breach of contract, there had been a “complete failure of consideration” by CC. So the adjudicator ordered CC to repay that sum forthwith.

CC said that the adjudicator had no jurisdiction to do what he did. Paragraph 1 of Part I of the Scheme for Construction Contracts (SI No 649 of 1998) (“the Construction Scheme”) confers the right on any party to a construction contract to refer to adjudication “any dispute arising under the contract”. CC said that ISG’s restitutionary claim was not made “under contract” because restitutionary claims are not made under contracts, they are made “in equity”, restitution being an equitable remedy – and as such the adjudicator had no jurisdiction/power to decide it under the Construction Scheme.

The High Court said CC had confused the dispute and the remedy.

The scope of the jurisdiction of the adjudicator had been determined by the nature of the dispute identified in the Notice of Adjudication, not by the nature of the restitutionary remedy claimed.

Here there was a total failure of consideration which is almost invariably the result of a breach of contract unless performance of the contract has been “frustrated”.

There was nothing in the Construction Scheme that deprived an adjudicator of the power to grant relief by way of restitution if that was an available remedy for the breach of contract in question.

It being established that the dispute arose from a breach of contract and was therefore within his jurisdiction, the adjudicator could award any remedy within his power – such as the payment of a sum of money – which the claimant was entitled to for breach of contract.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Agreed adjudication procedure could by agreement make final and binding decision

A Scheme Construction Adjudication under Section 108(3) of the Housing Grants, Construction and Regeneration Act 1996 (“Construction Act”) carries with it an implicit proviso that, unless expressly stated in the Construction Contract or agreed between the parties to the contrary, the adjudicator’s decision will be only temporarily binding on the parties, in the sense that they must comply with it, and the court will enforce it, irrespective of any complaints about its correctness or other issues which the losing party may wish to raise, unless and until the dispute is finally resolved. That final resolution may be by legal proceedings, by arbitration (where applicable) or by agreement.

In the High Court case of Khurana & Anor v Weber Construction Ltd [2015] the right of adjudication under the Scheme did not statutorily apply to the construction contract, because under Section 106 of the Construction Act the right of adjudication under the Scheme does not statutorily apply to construction contracts with residential occupiers for operations on a dwelling house.

Nonetheless in a letter the Defendant’s solicitor expressly proposed, and in their written response the Claimant’s solicitors expressly agreed to, the appointment of a quantity surveyor under the Scheme under procedures to be “conducted in accordance with” the Scheme “save that the decision of the independent structural quantity surveyor shall be binding on the parties.”

The court said both parties must be taken to have been aware that a Scheme adjudication decision would be only temporarily binding, unless expressly stated to the contrary. The words “save that the decision … shall be binding on the parties” could only sensibly have been intended to derogate from that default position.

The reasonable observer could only have concluded that those words in the Defendant’s solicitor’s letter clarified that unlike a Scheme adjudication, the adjudicator’s decision would be permanently, as opposed to temporarily, binding on the parties if their proposal was accepted.

The letter made it plain that the losing party to the proposed adjudication could not subsequently elect to re-run the whole dispute afresh in legal proceedings if that proposal was accepted (which it was by the Claimant’s solicitor’s letter).

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Pace and timing of adjudication did not deny natural justice

The courts will usually enforce the decision of an adjudicator.

There may be exceptions where a properly arguable case can be made out that there has been a breach of natural justice, or that the adjudicator lacked the necessary jurisdiction to reach the decision.

In CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015], the defendant raised both challenges:

The natural justice challenge was based on the adjudicator’s timetable being too quick and therefore overstretching their resources.

This argument had been unsuccessfully raised in earlier cases.

The High Court said adjudication is a “rough and ready process” because it has to take place within a very strict timetable.

That often puts the responding party under particular pressure.

That was “a fact of adjudication life”. It is “inherent in the whole process”.

Here, the claimant testified that they had proper cash flow reasons for pursuing the claim at the time they did.

After all the importance of cash flow was the principle that underlies the adjudication process.

The timetable the adjudicator had set down made the best use of the 28 days that was available.

Though it took place over the Christmas/New Year period, the defendant had held the disputed invoices since the middle of November and so must have known what points it intended to make in the adjudication. Otherwise what was the basis for the defendant saying that the claims would be ‘strenuously defended’ on 18 December 2014? Also there had been no great complexity about the disputes between the parties.

The only real point of significance was whether or not the defendant had served on the claimant a valid “payless notice”. That was relatively straightforward and well capable of determination within the 28 days.

Lastly the defendant could have asked the adjudicator for further time but the defendant failed to do that.

That strongly suggested to the judge that this challenge was not based on something that was of great concern to the defendant at the time, but rather “on an attempted comb through the authorities on adjudication, to try and find a reason after the event for avoiding making payments to the claimant.”

So the defendant’s challenge to the adjudication, on this ground, was unsuccessful. Indeed it was on all the other grounds as well.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Notice of Adjudication could not exclude consideration of defences and counter claims

In adjudicated construction disputes, the view has been expressed that the Notice of Adjudication defines the dispute and the adjudicator takes his or her jurisdiction from the content of that Notice.

This is usually a good guide but its not always the case. For example something may be referred, which the Notice of Adjudication mentions as being a dispute, when it has never previously been disputed. An entirely new claim which has never been put to the other party cannot become a dispute:

– unless and until it has been notified to the other party and
– it does not become a dispute simply because it is set out in the Notice of Adjudication.

The “disputed claim” set out in the Notice of Adjudication must be seen in its context. That context will can only be ascertained by looking at what the parties have said and done over a period of time.

An adjudicator must take into account and adjudicate on defences raised by someone defending an adjudication even if the particular defence is being raised for the first time.

What happens if one party to an adjudication seeks to limit an adjudicator’s jurisdiction by referring to a disputed claim but defining the dispute in the Notice of Adjudication in such a way as to attempt jurisdictionally to prevent a defending party from raising any defence to the adjudication?

In the High Court case of Kitt & Anor v The Laundry Building Ltd & Anor [2014] ETC’s Notice of Adjudication required:

1. all claims to be determined and decisions as to their payment but
2. sought to qualify the reference by excluding issues which might give TLB:

2.1 cross and counter claims and/or
2.2 defences as to the correct quantum of individual claim items

thereby denying TLB available defences it could otherwise use in adjudication in relation to those items.

For instance ETC’s Notice of Adjudication had said that the adjudicator was required to decide whether its second application for an extension of time was justified but that did “not give the adjudicator jurisdiction in this adjudication to open up the [previous] extension of time award or the agreed weekly value for loss and expense”.

The adjudicator could not, and was not prepared to, work within these constraints in making the award.

In the High Court ETC’s defence was that the adjudicator’s decision was not binding and enforceable since:

1. it dealt with issues which its Notice of Adjudication had sought to exclude, and
2. the adjudicator had thereby:
2.1 acted in breach of the rules of natural justice and
2.2 exceeded his jurisdiction and
2.3 breached an implied term of his appointment that he would decide the dispute:
2.3.1 in accordance with the jurisdiction the parties granted him,
2.3.2 in accordance with the rules of natural justice and
2.3.3 by producing a decision that was binding on the parties.

The court said a Notice of Adjudication could not circumscribe and delineate the dispute, set out or defined in it, in such a way as to exclude particular defences.

It would be illogical and untenable, if not ludicrous, if it were otherwise.

This case alone illustrated that it could not be logical or fair. So:

1. a Responding party has an unfettered ability to elect how to defend itself in response to a Notice of Adjudication and

2. ETC “telling” the adjudicator that he must not consider legitimate defences was of no legal effect.

If that had been attempted in court proceedings, it would have been treated as completely wrong and unjustified. The Court would never be constrained by artificial attempts to limit its jurisdiction, though it would usually only address arguments actually raised by a defendant in defence.

That was not to say that potential evidential weakness in a defence could not be highlighted in the Notice of Adjudication. For example a money claim may be based on exactly what the defending party’s own architect has certified or approved such that this constitutes strong evidence in the referring party’s favour.

However, to refer a payment claim and, at the same time, for the referring party to exclude from reference parts of the claim which might be challenged by the defending party was “illogical, unmeritorious and wrong. It [was] a device which cannot and should not work.”

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.