A recent case concerning an adjudicator’s decision on an interim payment application demonstrates the consequences of not presenting the correct documents.
The case of Broughton Brickwork Ltd v F Parkinson  EWHC 4525 (QB) concerned an adjudicator’s decision on an interim payment application (IA12), claimed by subcontractor Broughton Brickwork, in which a pay less notice had not been served.
Parkinson, the contractor, argued that the absence of a pay less notice in respect of IA12 was irrelevant because notices had been serviced in respect of interim payment applications IA13 and IA14.
The contractor provided the pay less notices for IA13 and IA14 in its documentation for adjudication but failed to discuss them in its response.
The adjudicator decided that although neither party argued as to the validity of the IA13 and IA14 notices (or in any way whatsoever), he believed he had sufficient information to decide whether they were valid.
The adjudicator concluded that the notices were issued late and made a decision in favour of the subcontractor in respect of IA12 to the sum of £96,000.
In reality, the pay less notice in respect of IA14 had in fact been served on time.
Following his decision, the adjudicator stated he had been unaware of the pay less notice for IA14 and that, had he been, he would have decided in favour of the contractor.
The defendant, Parkinson, made no such payment following the adjudicator’s decision and subsequently the claimant began enforcement proceedings.
Competent and just decision
The court ruled that the adjudicator was under no obligation to invite the parties to submit clarification or ascertain the validity of the pay less notice for IA14.
“It is extremely important to ensure the argument you are presenting is clearly organised and referenced”
Essentially, both claimant and defendant had both had ample opportunity to clarify their positions and the defendant had failed to do so – potentially to the detriment of its own intentions.
It was held that the adjudicator, considering all the relevant documentation presented before him, had reached a competent and just decision.
The judge stated that despite there being a procedural error by the adjudicator in respect of IA14, it was not deliberate.
Furthermore, the defendant was found to have materially contributed to the procedural error by way of its own failure to highlight:
- That IA14 had been served electronically (instant notification);
- Failure to bring the importance of IA14 to the adjudicator’s attention;
- The numbering of the supporting documentation presented to the adjudicator was inadequate, making it all the more simple for the procedural error to occur.
Considering all the evidence, it was held that due to the defendant’s contribution to the material breach, the adjudicator had not caused a breach of the rules of natural justice, and therefore in light of the circumstances the decision was fair.
The timescale and the ability of adjudicators to read all the documentation sometimes put in front of them is finite and, as the decision in this case highlights, an adjudicator will not be held at fault for failing to go through every single document.
As demonstrated here, it is extremely important to ensure the argument you are presenting is clearly organised and referenced to make sure important evidence is considered.
Was the decision unfair?
Arguably this is part and parcel of adjudication.
Had the defendant ensured its case was well presented and documentation properly indexed, the ruling would likely have been made in its favour – thus ensuring natural justice was served.
As an advocate of adjudication, one could argue that if a document is that important to your case, you should ensure you draw attention to it – or you might forever be kicking yourself in hindsight.
Laithe Jajeh is head of construction and dispute resolution services at Blenheim Associates