Systech International Ltd V PC Harrington Contractors Ltd
Technology and Construction Court
27 October 2011
There was an adjudication between a contractor and its sub-contractor. The dispute referred primarily concerned the sub-contractor’s claim for the return of retention monies. The contractor asserted in its defence that it was not obliged to repay the monies with one of the grounds for that assertion being that it had overpaid the sub-contractor. The adjudicator decided that the sub-contractor was entitled to the return of the retention monies, he should not have regard to the overpayment assertion on the ground that it was a new dispute which he did not have jurisdiction to determine and the contractor should pay his fees. The sub-contractor brought court enforcement proceedings. Akenhead J declined to enforce the adjudicator’s decision on the ground that the adjudicator had acted in breach of the rules of natural justice by not considering the contractor’s overpayment assertion in its defence in the adjudication. The adjudicator brought proceedings against the contractor to recover his fees and relied on his terms of engagement with the contractor and the sub-contractor. The terms of engagement made the parties jointly and severally liable for paying the adjudicator’s fees on a time charge basis.
Akenhead J held that the adjudicator was entitled to recover his fees on all three adjudications from the contractor in accordance with the adjudicator’s decision that it should pay them. It could not be said that there had here been a total failure of consideration on the adjudicator’s part under or in connection with his contracts with the contractor for him to act as adjudicator in relation to the disputes referred to him. This was so notwithstanding that his decisions were unenforceable by reason of his albeit honest and unwitting breaches of the rules of natural justice. The consideration or bargained-for performance was not "whole and indivisible" and there had been in effect at the very least partial performance by the adjudicator. The breakdown of the adjudicator’s timesheets indicated that he spent a not insignificant time in a partial discharge of his role as adjudicator by dealing with jurisdictional objections raised by the contractor (at its request), reviewing the pleadings and the very substantial amount of documentation and evidence attached to some of those documents and communicating with the parties.