Quietfield v Vascroft Contractors (Part II)

The adjudicator's in awarding liquidated damages in the third adjudication was in breach of the rules of natural justice by not having considered the contractor's defence for an extension of time
 
QUIETFIELD LTD v VASCROFT CONTRACTORS LTD (Part II)

Court of Appeal
May, Dyson and Smith LJJ
20 December 2006
 
The adjudicator in the first adjudication decided that the contractor was not entitled to an extension of time. The employer began a third adjudication in which it claimed liquidated damages. The contractor in its response contended that it was entitled to an extension of time for the whole period of delay. The employer contended that the adjudicator should not consider the contractor’s defence on the ground that the adjudicator was bound by his decision in the first adjudication that no extension of time should be awarded. The adjudicator’s decision in the third adjudication was that he should not consider the contractor’s case on the basis contended for by the employer and that the employer should therefore be awarded the liquidated damages claimed. The contractor refused to pay the sum awarded and the employer began court enforcement proceedings.
 
The Court of Appeal upheld the decision at first instance of Jackson J that the adjudicator’s decision in the third adjudication should not be enforced by reason of the adjudicator having failed to abide by the rules of natural justice in not having considered the contractor’s defence (by which it claimed an entitlement to an extension of time covering the delay period) notwithstanding that the (same) adjudicator had rejected the contractor’s claim for an extension of time in the first adjudication. This was on the basis that if a contractor resisted a claim for liquidated damages in adjudication proceedings, it could rely by way of defence on its entitlement to an extension of time unless that defence had been considered and rejected in a previous adjudication and that the defence advanced by the contractor in the third adjudication was substantially different from its claims for an extension of time in the first adjudication.
 
The “dispute” identified by the contractor in the first adjudication was the architect’s failure to grant an extension of time in response to the contractor’s two letters containing its applications which, whilst identifying the grounds for the applications, did not contain reasoning on which the adjudicator might be expected to reach a decision. However, a number of causes of delay which did not feature in the contractor’s two application letters were set out in the contractor’s defence in the third decision and that defence was fully reasoned.
 
 
 
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