This case concerns an application by Davies and Davies Associates Limited (“DDA”) for summary judgment in connection with unpaid adjudicator’s fees. It is interesting because it only involved the relatively small sum of £4290 claimed from the Defendant (Steve Ward Services (UK) Limited “SWS”), and such a sum would not ordinarily fall within the “run of the mill” TCC (Technology and Construction Court) business and would be dealt with in the small claims court.
It was passed to the TCC given some of the interesting points it raised.
SWS brought an adjudication against Bhavishya Investment Limited (“BIL”). The adjudicator nominated was Nigel Davies of DDA (referred to in this article as the “Adjudicator”). He resigned during the course of the adjudication and the issue to be decided by the TCC was whether DDA was entitled to be paid the Adjudicator’s fees up to the resignation.
SWS contended in its Referral (submitted as part of the adjudication proceedings) that the contract had been entered into by it and BIL. The Adjudicator resigned because he found that this was incorrect and that the contract was in fact between SWS and Ms Vaishali Patel (who was the majority shareholder in BIL).
In actual fact, there was no dispute as to either the identity of the contracting parties or the adjudicator’s jurisdiction.
The Court’s Decision
The Court found that;
- The Adjudicator should have inquired as to the parties’ position on who the contracting parties were and whether both parties accepted that he had jurisdiction. The Adjudicator did neither of these two things.
- However, despite this, the Adjudicator had not acted in a way which constituted a deliberate and/or impermissible refusal to provide a decision.
- The resignation by the Adjudicator was not a breach of the terms of the Adjudicator’s appointment because paragraph 9 (1) of the Scheme for Construction Contracts (the “Scheme”) allows an adjudicator to resign on giving notice.
- In addition, Clause 1 of the adjudicator’s terms allowed the Adjudicator to be paid where a decision was not delivered and/or where it was unenforceable. However, it stated the Adjudicator was NOT entitled to be paid if he had acted in bad faith. The Court found no bad faith.
The Court found that where an adjudicator had come to the conclusion (acting with diligence) that the proper course was to resign (pursuant to his right to do so under the Scheme) this was not in itself an act of bad faith and therefore the adjudicator’s terms allowed payment. The court also considered that Clause 1 of the Adjudicator’s terms did not fall foul of the Unfair Contract Terms Act).
Accordingly, the Court awarded payment of the sums claimed by DDA.