Linnett v Halliwells Llp
Whether or not the adjudicator had jurisdiction to make his decision on the merits, the responding party was liable to pay the adjudicator his reasonable fees and expenses and was jointly and severally liable with the referring party to the adjudicator for those fees and expenses
24 February, 2009
LINNETT V HALLIWELLS LLP
Technology and Construction Court
24 February 2009
24 February 2009
The responding party refused to pay the adjudicator's fees and expenses which the adjudicator directed it to pay as a result of being the losing party in the adjudication. The adjudicator brought court proceedings to recover those fees and expenses. The responding party defended those proceedings by contending that where, as in the instant case, a responding party raised jurisdictional challenges and did not agree the adjudicator's terms of engagement, the adjudicator's only method of obtaining payment, if the party found liable in his decision for his fees and expenses failed to pay him, was for him to recover those fees and expenses from the referring party and the referring party would then be left to recover those fees and expenses from the responding party. The adjudicator contended that the responding party in the second adjudication brought against it by the referring party relied on the adjudicator's decision in the first adjudication and could not assert that the adjudicator's decision was one made without jurisdiction and at the same time rely on that decision.
Ramsey J rejected the responding party's contention. Whether or not the adjudicator had jurisdiction to make his decision on the merits, the responding party was liable to pay the adjudicator his reasonable fees and expenses of conducting the adjudication and was jointly and severally liable with the referring party to the adjudicator for the payment of such reasonable fees and expenses. The referring party's liability was limited to the fees and expenses it agreed with the adjudicator by accepting the adjudicator's terms of engagement, which included his terms as to his fees and expenses. A responding party would in principle generally be liable to the adjudicator for his reasonable fees and expenses as a matter of contract between that party and the adjudicator where it did not accept the adjudicator's terms of engagement, challenged the adjudicator's jurisdiction and persuaded the adjudicator to make an early non-binding decision on jurisdiction but participated in the proceedings (albeit without prejudice to its challenge). The responding party was liable for the adjudicator's reasonable fees and expenses in the instant case on the basis that the circumstances were equivalent to the above circumstances.