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Posted April 17, 2020 | Published in General

Adjudication business as usual? TCC refuses to grant injunction preventing adjudication due to impact of COVID-19

MillChris Developments Limited v Waters [2020] 4 WLUK 45

In a typically pragmatic decision, the TCC refused an application from a responding party contractor for an injunction to prevent an adjudication from proceeding on the basis that it was unable to properly respond to it because of the COVID-19 crisis.

Facts

The contractor had been appointed by a homeowner to undertake certain extension and renovation works in September 2017.  In November 2019, the contractor ceased trading and on 23 March 2020, the homeowner commenced an adjudication alleging that defects existed in the contractor’s works and that she had been overcharged for the works.  When the contractor wrote to the adjudicator stating that it was unable to comply with the timetable because of the COVID-19 outbreak and proposing that the proceedings effectively be stayed until the end of the lockdown, the adjudicator decided that the proceedings should continue but gave the contractor a two-week extension to respond. 

The contractor applied to the TCC for an injunction restraining the adjudication from proceeding. The contractor submitted that if the adjudication went ahead, it would be conducted in breach of the rules of natural justice.  It submitted that it could not prepare its response due to the COVID-19 pandemic because its solicitor was self-isolating, and it could not appoint an independent surveyor in the circumstances or attend a site visit.

Judgment

The question for the TCC to consider in deciding whether to grant the injunction was whether there was a serious issue to be tried in that the adjudication would necessarily be conducted in breach of natural justice with the inevitable consequence that it would be unenforceable.  

The Judge declined to grant the injunction.  The contractor’s submission that it could not respond due to the COVID-19 crisis was rejected.  The Judge held that there was no reason why the papers could not be transported or scanned to the solicitor who was self-isolating and there was no reason why the contractor could not contact its key witnesses, particularly as it had been given an extra two weeks to do so.  

" It submitted that it could not prepare its response due to the COVID-19 pandemic because its solicitor was self-isolating, and it could not appoint an independent surveyor in the circumstances or attend a site visit. "

Further, the Judge held that the adjudicator could conduct the site visit alone; there was no need for both parties to be present.  Although the homeowner would have been present as it was her property, there was no reason why the site visit could not have been recorded or the contractor given the opportunity to draw the adjudicator’s attention to its own list of issues in advance.

Comment

Although injunctions are very rarely granted to restrain adjudications, this decision will still come as a relief to parties in the industry looking to commence adjudications to seek the recovery of cash or for other reasons during the COVID-19 crisis.  Each case will turn its own facts, but the TCC will expect parties to be sensible with the timetable and to take reasonable practical steps to ensure that adjudications can proceed while social distancing rules and other lockdown measures apply.  Given that parties are already long-used to serving submissions and evidence electronically and conducting witness interviews over video link, the COVID-19 crisis should not stand in the way of adjudication business continuing as usual. 

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