UK: Evidence: In? Out? Can an Adjudicator Shake It All About?

Last Updated: 3 June 2010
Article by Mark De Freitas

Cynthia Jacques and Elsie Jacques Grombach (t/a C&E Jacques Partnership) v Ensign Contractors Limited [2009] EWHC 3383 (TCC)

INTRODUCTION

The recent TCC case of Jacques v Ensign provides a useful summary of the Court's application of the concept of natural justice to adjudication proceedings. The decision:

  • Confirms that adjudicators enjoy a wide jurisdiction in considering evidence;
  • Provides an example of the Court's discretion regarding the granting of a stay of execution;
  • Gives a salutary reminder of the costs consequences of failing to beat a settlement offer.

THE FACTS

  • In May 2006, the Employer, trading as C&E Jacques Partnership, engaged the Contractor, Ensign Contracts Limited, to renovate a number of flats in an apartment block in Liverpool for a contract sum of £339,000.
  • There were a number of disputes and adjudications between the parties; the fourth adjudication concerned alleged deficiencies in the Contractor's work, claiming overpayment of £198,000.
  • The Adjudicator's decision of October 2007 directed that the Contractor should re-pay to the Employer an overpayment of £29,000 plus VAT.
  • The Contractor raised a series of jurisdictional objections to the fourth Adjudication decision and following a further abortive adjudication, the parties agreed to a Consent Order that the fourth adjudication decision should be declared "null and void".
  • The fifth adjudication commenced the day after the date of the Consent Order. The dispute related, essentially, to what constituted the value of the Contractor's final account.
  • The Employer sought re-payment of £187,000 and the Referral dated 6 August 2009 made reference to substantial defects in the works. The Contractor provided a detailed response seeking payment of £98,700 and made a number of references to the "null and void" decision in the fourth adjudication.
  • Following the Employer's challenge to the references made to the fourth adjudication decision, the Adjudicator confirmed: "I must make my decision based on my view of the evidence and submissions as presented to me. I find therefore that the previous Adjudicator's Decision is irrelevant and therefore inadmissible as evidence and consequently I should not even read it let alone have regard to it. It is part of an Adjudicator's role to exclude inadmissible evidence from his considerations........"
  • Predictably, the Contractor reserved its rights to subsequently challenge the decision.
  • Further pleadings were exchanged and the Adjudicator's decision of 26 October 2009, directed that the Contractor should pay £97,000 and the Adjudicator's fees of £26,000.
  • The Contractor failed to pay and the Employer commenced enforcement proceedings on 19 November 2009.

The Decision: the Adjudicator did not breach the rules of natural justice by refusing to consider the previous adjudication decision.

Akenhead J's decision dated 22 December 2009 provides a very useful summary of the application of the rules of natural justice to adjudication. Essentially, the Court made a distinction between an adjudicator failing or refusing to consider a substantive defence and failing/refusing to consider all the evidence provided in support of that defence. Paragraph 26 of the judgement applied the principles of natural justice to the facts of the case:

  1. The Adjudicator must consider defences properly put forward by a defending party in adjudication.
  2. However, it is within an adjudicator's jurisdiction to decide what evidence is admissible and, indeed, what evidence is helpful and unhelpful in the determination of the dispute or disputes referred to that adjudicator. If, within jurisdiction, the adjudicator decides that certain evidence is inadmissible, that will rarely (if ever) amount to a breach of the rules of natural justice. The position is analogous to a court case in which the Court decides that certain evidence is either inadmissible or of such little weight and value that it can effectively be ignored: it would be difficult for a challenge to such a decision on fairness grounds to be mounted.
  3. Even if the adjudicator's decision (within jurisdiction) to disregard evidence as inadmissible or of little or no weight was wrong in fact or in law, that decision is not in consequence impugnable as a breach of the rules of natural justice.
  4. ...... It is simply not practicable, usually, for every aspect of the evidence to be meticulously considered, weighed up and rejected or accepted in whole or in part. Primarily, the adjudicator needs to address the substantive issues, whether factual or legal, but does not need (as a matter of fairness) to address each and every aspect of the evidence. The adjudicator should not be considered to be in breach of the rules of natural justice if the decision does not address each aspect of the evidence adduced by the parties.

THE PARTIAL STAY OF EXECUTION

The Court was satisfied that there was a real risk that the Employer would not be in a position to repay the judgement sum or at least a significant part of it. The Court referred to the decision in Wimbledon Construction Company 2000 Ltd v Derek Vago [2005] BLR 374 regarding the Court's discretion to grant a stay and imposed a stay of execution for £60,000 of the total judgement sum including interest.

In doing so, the Court was critical of the Employer's attempt to adduce further evidence regarding the stay following circulation of the judgement in draft. The Court, in any event, concluded that the further evidence was "at best inconclusive" and "inherently unreliable".

COSTS: THE EMPLOYER'S FAILURE TO BEAT THE CONTRACTOR'S OFFER

The Court concluded that, in the ordinary course of events, the Employer would recover 80% of its costs as it had been successful in its application for summary judgement (the 20% discount reflecting the fact that the Contractor had been successful in respect of the stay of execution).

However, the Court identified three other factors:

  • Firstly, both the Contractor and Employer had made further applications following the circulation of the draft judgement (which they had both lost); the parties should bear their own costs of this;
  • Secondly, the Contractor asked the Court to reflect its disapproval of the "misleading" factual evidence adduced by the Employer; the Court refused to do so as this had already been taken account of in the decision on the stay of execution;
  • Thirdly and most significantly, the parties had entered into settlement discussions in which the Contractor had made a series of offers of settlement including an offer to pay the sum claimed in full by staged payments. The first payment of £50,000 was to be paid on 8 January 2010 and with further payments at £10,000/month thereafter. The offer was expressed to be open for acceptance until the date of the hearing on 14 December 2009.

The Employer had requested personal guarantees to support the offer of staged payments. The Court concluded that this was not unreasonable but that such guarantees would never have been available from the Court, so the final outcome was that the Employer did not do better, and arguably did worse than the Contractor's offer. However, as the offer was open for acceptance until the date of the hearing, the Court concluded that the large bulk of the costs would have been incurred in any event.

The Court concluded that the Employer should only be entitled to 50% of its costs entitlement up to 14 December 2009, which equated to 40% of its costs (i.e. 50% of 80%). The Court made a further reduction to the Employer's costs, reducing them on summary assessment from £27,000 to £20,000. The Contractor was therefore ordered to pay £8,000 (i.e. 40% of £20,000).

CONCLUSION

The case demonstrates the wide discretion which Adjudicators have regarding conduct of an adjudication. This includes the discretion to disregard evidence as inadmissible or of no weight. Even if such a decision is wrong in fact or in law, that decision does not amount to a breach of natural justice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.