South West Contractors Ltd v Birakos Enterprises Ltd
The adjudicator was not in breach of the rules of natural justice by allegedly having failed to consider its case that the project manager's loss should have been mitigated on the basis that the court should not minutely examine an award to he had made such a mistake
7 November, 2006
SOUTH WEST CONTRACTORS LTD v BIRAKOS ENTERPRISES LTD
Technology and Construction Court
His Honour Judge David Wilcox
7 November 2006
The project manager was initially appointed under a fee agreement on the basis that that agreement was in respect of the project manager's profit element and was subsequently appointed as construction manager on the basis that the project manager would be paid its costs, including overheads. It was common ground that the two appointments were separate contracts. The client terminated the project manager's retainer during the course of the project and effectively terminated the two appointments. The project manager contended that the termination constituted a repudiatory breach of contract and claimed damages, including management costs and overheads in respect of the construction management agreement and loss of profit in respect of the fee agreement. Disputes arose both as to the management costs and overheads claim and the loss of profits claim. The project manager referred the disputes to adjudication and the same adjudicator was appointed in both adjudications. The adjudicator made separate awards in the project manager's favour. The client refused to pay the sums awarded by the adjudicator with the result that the project manager commenced court enforcement proceedings and applied for summary judgment.
Judge Wilcox held that the project manager could not be said to have been in breach of the rules of natural justice. It was unlikely that that the adjudicator did not consider the client's mitigation argument. It was therefore not plain that the adjudicator had been obviously unfair and the court should not minutely examine the reasons for an award to see if an adjudicator might have made a mistake. Chadwick LJ in Carillion Construction v Devonport Royal Dockyard (2005) stated in this connection that (1) it was only too easy in a complex case for a party dissatisfied with the decision of an adjudicator to comb through the adjudicator's reasons and identify points upon which to present a challenge under the labels "excess of jurisdiction" or "breach of natural justice" and (2) the objective behind the Construction Act required the courts to respect and to enforce an adjudicator's decision unless it was plain that the manner in which he went about his task was obviously unfair.