PC Harrington Contractors Ltd V Tyroddy Construction Ltd

The adjudicators breached the rules of natural justice by not determining the sub-contractor's defence as to the true value of the final account and giving the parties the opportunity of being heard on the defence
 

 

PC HARRINGTON CONTRACTORS LTD V TYRODDY CONSTRUCTION LTD
Technology and Construction Court
Akenhead J
25 March 2011
 
 

The sub-sub-contractor advanced claims against the sub-contractor for the release of retention monies and referred the disputes in respect of these claims to adjudication. The adjudicator awarded the sub-sub-contractor a specified sum. The sub-contractor declined to pay the sums awarded and brought Part 8 proceedings in which it sought that the adjudicator had committed a material breach of the rules of natural justice.

Akenhead J held that the adjudicator had committed such a breach by not determining the sub-contractor’s defence as to the true value of the final account and not giving the parties the opportunity of being heard on that defence. The adjudicator in holding that the sub-contractor’s defence was outside his jurisdiction to determine and by therefore ruling on his jurisdiction in this way denied himself the opportunity to consider the merits of the "final account" exercise which the sub-contractor asked him to determine and failed to deal with matters properly before him. The adjudicator's breach was material and certainly more than a peripheral breach notwithstanding that it was technical and did not involve any personal condemnation because the adjudicator clearly acted honestly and transparently, albeit wrongly. It was not possible or desirable for the court to say or guess what the adjudicator would have done if he had considered the "final account" exercise on its merits. As to the adjudicator not giving the parties the opportunity of being heard on the sub-contractor’s defence as to the true value of the final account, the sub-contractor was prepared to hang its hat on this apparently forceful point. Whilst the sub-sub-contractor might have made a point on jurisdiction to agree with the adjudicator's initial view on his jurisdiction, it was not possible to speculate about that and the sub-contractor would certainly have had something to say about that view. Whilst the adjudicator acted wholly honestly and transparently, he unwittingly failed to follow the rules of natural justice by failing to deal with matters properly before him; and to give the parties the opportunity to be heard on something such as the jurisdictional issue.
 

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