Sarah Bolton of Taylor Wessing looks at the recent decision in Rydon Maintenance v Affinity Sutton Housing.
When statutory adjudication was first introduced under the Housing Grants, Construction and Regeneration Act 1996, it was intended to provide a speedy resolution to the myriad disputes that inevitably arise during the course of a building contract. To this end, the courts and Parliament have allowed parties and adjudicators a great deal of autonomy in deciding how the process is run.
Adjudicators will be reassured, then, by the recent decision of the TCC in Rydon Maintenance v Affinity Sutton Housing where no breach of natural justice resulted from the adjudicator setting out his own procedure.
The facts were as follows. The parties entered into a long-term contract for Rydon to carry out maintenance and minor works on Affinity Sutton’s properties. The contract was an Assocation of Consultant Architects (ACA) standard form of contract for term partnering. The ACA form allowed for adjudication of disputes under the Construction Industry Council Model Adjudication Procedure.
Works were carried out over many years, with Rydon submitting monthly applications for payment. Rydon then discovered that it had under-invoiced Affinity Sutton and submitted an invoice in respect of these amounts. Affinity Sutton denied liability and so Rydon referred the dispute to adjudication.
The adjudicator made a number of procedural directions. A meeting was held between Rydon and the adjudicator to clarify the report of Rydon’s forensic accountant. No one from Affinity Sutton’s side attended the meeting, although it was recorded and transcribed. Affinity Sutton then had the opportunity to submit questions to Rydon and its forensic accountant. Rydon provided answers, and Affinity Sutton provided a written response. The adjudicator gave a decision in favour of Rydon.
Rydon applied for summary judgment to enforce the decision. Affinity Sutton argued:
- that the adjudicator had failed to follow the adjudication procedure agreed between the parties;
- that the adjudicator had failed to give each party an equal and reasonable opportunity to present its case in breach of the rules of natural justice;
- and that the adjudicator had decided the case before hearing all submissions.
The court held that the adjudicator was entitled to determine his own procedure so far as permitted by the Model Adjudication Procedure and the dictates of fairness. While it had been envisaged that Rydon would serve a reply, the adjudicator had dispensed with that and proceeded to a meeting. He was entitled to do so. In any event, it was for Rydon to claim a right of reply, and Affinity Sutton had suffered no prejudice.
There was nothing objectionable in the directions given by the adjudicator. He had not departed from any agreed procedure and so there had been no breach of natural justice. Judge Raeside cited Ardmore Construction v Taylor Woodrow Construction [2006] CSOH 3 in stating that any breach of natural justice would have to be clear and substantial. The adjudicator had not pre-determined the case, instead he had indicated his provisional view as permitted in Lanes Group v Galliford Try Infrastructure [2011] EWCA Civ 1617, [2012] Bus. L.R. 1184.
So, in conclusion, the courts have once again confirmed that, in the interests of reaching a quick and cost-effective decision, adjudicators are to be granted a great deal of leniency in determining the most suitable procedure for adjudication.
Sarah Bolton is a trainee solicitor in the construction department at Taylor Wessing
