Makers UK Limited v The Mayor and Burgesses of the London Borough of Camden
Case reference:
[2008] EWHC 1836 (TCC)
Friday, 25 July 2008
Key terms: Jurisdiction - Apparent bias - Adjudicator nominating bodies
The Defendant ("Camden"), a local authority, engaged the Claimant ("Makers") under a 1998 JCT Intermediate Form of Building Contract to carry out refurbishment works at Wittington Estate in Highgate, London. Issues arose between the parties over variations and delays. Camden issued at "Default Notice" alleging that Makers was in default of their contractual obligation to proceed regularly and diligently, and later issued a "Determination Notice" purporting to determine Makers' employment under the Contract as the default had continued for 14 days from the receipt of the Default Notice. Makers subsequently commenced an adjudication.
The parties, under Clause 9A.2 of the contract, had agreed that the adjudicator nominating body was to be the President or a Vice-President of the RIBA. Accordingly, the solicitor for the Claimant phoned an adjudicator on the RIBA panel, Mr Harris, as he was a qualified solicitor, to see if he was available. He subsequently wrote to the RIBA to request a nomination, and suggested Mr Harris be appointed if available. Once Mr Harris was appointed and the Referral was served, Camden reserved their position that the adjudicator had not been validly appointed and therefore had no jurisdiction to decide the dispute.
The adjudicator found in favour of Makers, and accordingly they commenced proceedings for summary judgment following default on the sum due. Camden argued that there is an implied term of the Contract whereby "neither party may seek to influence unilaterally the nominator's determination regarding the identity of an adjudicator..." and as such the appointment was null and void. It also argued that apparent bias arose when the Claimant's solicitor's contacted the adjudicator prior to his appointment.
Mr Justice Akenhead held, referring to the principles set out in BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1979) ALJR 20, that the implied term cannot or should not be implied as there is nothing in Clause 9A.2 which expressly bars a party from making representation to the RIBA, and there had been no suggestion that the RIBA, an independent and respected institution, would be in breach of its own rules if it listened to and even acted upon representations make to it. The Judge, referring to AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA Civ 1418, also accepted that "it is at least not uncommon for parties seeking a nomination to suggest either a particular individual...".
In respect of the alleged apparent bias, Mr Justice Akenhead held that there was no apparent bias in this case:
The parties, under Clause 9A.2 of the contract, had agreed that the adjudicator nominating body was to be the President or a Vice-President of the RIBA. Accordingly, the solicitor for the Claimant phoned an adjudicator on the RIBA panel, Mr Harris, as he was a qualified solicitor, to see if he was available. He subsequently wrote to the RIBA to request a nomination, and suggested Mr Harris be appointed if available. Once Mr Harris was appointed and the Referral was served, Camden reserved their position that the adjudicator had not been validly appointed and therefore had no jurisdiction to decide the dispute.
The adjudicator found in favour of Makers, and accordingly they commenced proceedings for summary judgment following default on the sum due. Camden argued that there is an implied term of the Contract whereby "neither party may seek to influence unilaterally the nominator's determination regarding the identity of an adjudicator..." and as such the appointment was null and void. It also argued that apparent bias arose when the Claimant's solicitor's contacted the adjudicator prior to his appointment.
Mr Justice Akenhead held, referring to the principles set out in BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1979) ALJR 20, that the implied term cannot or should not be implied as there is nothing in Clause 9A.2 which expressly bars a party from making representation to the RIBA, and there had been no suggestion that the RIBA, an independent and respected institution, would be in breach of its own rules if it listened to and even acted upon representations make to it. The Judge, referring to AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA Civ 1418, also accepted that "it is at least not uncommon for parties seeking a nomination to suggest either a particular individual...".
In respect of the alleged apparent bias, Mr Justice Akenhead held that there was no apparent bias in this case:
"One must judge apparent bias objectively, by the standards of the "fair-minded and informed observer" refereed to in Porter v Magill. The fact that individuals within Camden are subjectively concerned or distressed by what has happened is not in itself material. Parties to adjudications must avoid making mountains out of molehills even where something happens which is outside their immediate experience."
He concluded by giving judgment in favour of Makers and set out three general observations:
"(1) It is better for all concerned if parties limit their unilateral contacts with adjudicators both before, during and after an adjudication…
(2) If any such contact, it is felt, has to be made, it is better if done in writing so that there is a full record of the communication.
(3) Nominating institutions might sensibly consider their rules as to nominations and as to whether they do or do not welcome or accept suggestions form one or more parties..."