Bridgeway Construction Ltd -v- Tolent Construction Ltd

The sub-contractor was responsible for the costs of the adjudication notwithstanding its outcome in the sub-contractor's favour by reason of the contractual provision that the referring party should be responsible for the costs
The sub-contract incorporated the CIC Model Adjudication Procedure. The adjudicator made a decision in the sub-contractor's favour but refused its application to be awarded the costs of the adjudication. This was on the basis of the relevant provisions of the sub-contract which amended the CIC Model Adjudication Procedure by providing that the party which referred a dispute to adjudication was to be liable for the costs of both parties and the adjudicator's fees. The sub-contractor applied to the court for a declaration that these provisions were void on the ground that they had the effect of inhibiting the parties from pursuing their remedies under the Construction Act. Judge Mackay held that these provisions were valid and that the sub-contractor should pay the costs and fees in accordance with the decision. The mere fact that the sub-contractor became disgruntled with contractual terms it had previously agreed did not entitle it subsequently to complain that they were unfair. The adjudicator's decision as to costs was a reasoned one in principle and bound the parties insofar as they gave him the jurisdiction to determine that issue. The sub-contractor relied on the House of Lords? decision in Johnston v Moreton (1980). This case concerned the Agricultural Holdings Act 1948 and a lease prohibiting the tenant from taking the benefit of that Act. The House of Lords held that the relevant terms of the lease were void insofar as they purported to relieve the landlord of the burden of the Act. The sub-contractor submitted that the position in the instant case was similar insofar as the contractual provisions inhibited the party referring a dispute to adjudication from pursuing the remedies provided by the adjudication procedure. Judge Mackay disagreed. That case was not relevant insofar as (1) In that case there was a deliberate attempt to deprive a person of the benefit of an Act of Parliament and (2) In the instant case the issue was merely as to costs relating to the adjudication and was not the subject matter of any Act of Parliament. Advice Note There is nothing to prevent parties from making their own contractual arrangements as to who is to bear the costs of any adjudication notwithstanding the outcome of the adjudication.