John Roberts Architects Ltd v Parkcare Homes (Part II)

The adjudicator's direction that the client should pay the architect's costs of the adjudication should be enforced by the court where the client abandoned the adjudication proceedings it brought against the architect without the adjudicator making a decision
 
JOHN ROBERTS ARCHITECTS LTD v PARKCARE HOMES (Part II)

Court of Appeal
May, Keene and Scott Baker LJJ
9 February 2006
 
 
The client began adjudication proceedings against the architect which the client abandoned without the adjudicator having made a decision. Clause 29 of the adjudication agreement provided that the adjudicator in his discretion could direct the payment of legal costs and expenses of one party by another as part of his decision. The issue for determination was whether it should enforce the adjudicator’s direction resulting from the abandonment that the client should pay the architect’s costs of the adjudication.
 
The Court of Appeal overturned the finding of Judge Havery at first instance by holding that the direction should be enforced by the court. This was on the basis that clause 29 did not limit the adjudicator’s power to direct the payment of costs to situations where he made a substantive contested decision on the dispute and that the more natural and commercially sensible meaning of clause 29 in its context was that the power to direct the payment of costs “as part of his decision” meant “as part of what he could decide”.
 
It would have been very odd if the parties by their agreement only gave the adjudicator power to direct the payment of possibly substantial legal costs if he made a substantive contested decision insofar as: (1) there was no reason why parties who had agreed that they should be at risk as to the other party’s costs should draw a line where the interpretation clause 29 contended for drew that line and (2) such an interpretation of clause 29 would mean that either party could abandon the adjudication at the last moment without being at risk of paying the legal costs generated by its conduct where it had referred an unmeritorious claim or had responded to a claim with an unmeritorious defence. The very odd meaning contended for by the client and found by the judge at first instance required clause 29 to be read as meaning that the adjudication could in his discretion direct the payment of legal costs of one party by another “but only” as part of his “substantive contested” decision. The more natural and commercially sensible meaning of clause 29 in its context was that “as part of his decision” meant “as part of what he could decide” insofar as this was what the words against the relevant background would reasonably be understood to mean.
 
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