RNJM Ltd v Purpose Social Homes Ltd

[2025] EWHC 2224 (TCC)

RNJM sought summary enforcement of an adjudicator’s decision in the sum of £132k. Relying on the principle in the case of Eurocom v Siemens (Dispatch, Issue 174), Purpose said that RNJM had “deliberately or recklessly made a false statement” in applying to the RICS for the nomination of an adjudicator, which meant that the application was invalid, and the adjudicator did not have jurisdiction.

HHJ Kelly summarised a number of relevant principles including:

• If a false representation is made, in respect of an asserted conflict of interest when applying to an adjudicator nominating body, the resulting adjudication is invalid, and any decision is a nullity due to lack of jurisdiction of the adjudicator;
• It is irrelevant whether the adjudicator nominating body is deceived by the false representation or not;
• It is only if a potential adjudicator has a clear conflict of interest that the nominating body should be warned;
• The test for apparent bias is whether a fair-minded and informed observer, having considered all of the circumstances of the assertion that the adjudicator is biased, would conclude that there was a real possibility that the adjudicator is biased; and
• The failure of a party to pay the costs of previous adjudications as directed by an adjudicator is an example of unreasonable and oppressive behaviour. An adjudicator’s decision on allocation of their fees is final even if the decision on the dispute is subsequently overturned.

This was the fifth adjudication between the parties. The same adjudicator had been appointed in the second, third and fourth adjudications. That adjudicator found against RNJM in the third and fourth adjudications and ordered RNJM to pay their fees. RNJM did not comply, and the adjudicator wrote to both parties threatening legal proceedings as the parties were jointly and severally liable for their fees. Purpose paid those fees and wrote to RNJM asking why they had not done so themselves.

When RNJM started a fifth adjudication, they stated on the RICS nomination form that there was a conflict of interest between them and the previous adjudicator. The RICS has issued guidance on the point, which includes:  

“Conflict of interest: An involvement between the dispute resolver and one of the parties, one of the parties and representatives or the subject matter of the dispute, or any other circumstances that raises justifiable doubts of bias or apparent bias.”

Purpose’s solicitors emailed the RICS stating that there was no conflict or dispute concerning the fees. The position was simply that RNJM had chosen not to discharge its liability to pay those fees when directed to do so by the adjudicator.  

RNJM did not respond but a different adjudicator was appointed who found in favour of RNJM. The issue before HHJ Kelly was whether Purpose had a real prospect of successfully arguing that RNJM had deliberately or recklessly made a false statement when applying to the RICS for the appointment of an adjudicator for the fifth adjudication.

RJNM said, for the first time as part of the enforcement process, that they had a genuine belief that the payment dispute over the fees on the previous adjudications was a potential conflict. It was also reasonable that a fair-minded observer would conclude that the adjudicator would be biased.

Purpose highlighted that RJNM had never provided an adequate explanation for claiming that a dispute existed. There was no evidence or assertion that RJNM had disputed the fees with the adjudicator or challenged the underlying entitlements to them. RJNM simply did not pay them. Further, the adjudicator pursued both parties for payment of the fees. In fact, the only possible dispute over the fees was between RNJM and Purpose, since Purpose had already paid them.

In considering whether the information provided by Purpose was false, the judge examined the adequacy of the evidence given by RNJM. No one from RNJM explained why it was said that they were in dispute with the adjudicator. There was nothing beyond a bare assertion that there was such a dispute. RNJM never responded to requests from Purpose to identify the dispute.

Once the adjudicator’s fees had been paid, the adjudicator had no fee dispute with either party. The judge said that it could not have mattered who paid the fees and, for all the adjudicator knew, there may have been an agreement in the background about the payment that was made.  

As for apparent bias, RNJM said that there was a concern that the steps taken by the adjudicator to pursue payment of their fees “constituted a risk” that there would be a perception of apparent bias against them. It was therefore reasonable to set out those concerns in the nomination form.

The judge considered it relevant that there was no evidence of RNJM’s advisors warning RNJM of the consequences of wrongly asserting that there was a conflict. Further, it was “surprising” that the potential conflict was described in such minimum detail on the form without any further explanation.

HHJ Kelly concluded that the evidence provided by RNJM was wholly inadequate to establish the nature or basis for asserting that there was an alleged dispute. The numerous questions raised by Purpose were legitimate. The fact that RNJM chose not to answer those questions or provide any evidence about the nature of the dispute was “telling” and those questions remained unresolved. As a consequence, the judge refused RNJM’s application for summary judgment. Purpose had a realistic prospect of successfully arguing that the adjudicator lacked jurisdiction on the basis that RNJM had made a false statement about a conflict of interest on the adjudication referral form.

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