- There is a short answer to almost the whole of the defendants’
case on this application. Even assuming that the adjudicator is a public authority
and that the HRA applies Article 6 of the Convention to his conduct, almost
the whole of his conduct complained of is covered by section 6(2) of the HRA,
"Subsection (1) does not apply to an act if as the result of one or more
provisions of primary legislation, the authority could not have acted differently".
In order to comply with the 28 day time limit provided by statute, the adjudicator
could not have acted differently in imposing the time limits that he imposed
on the parties. That proposition is, I think, not disputed. Accordingly, since
the adjudicator was acting in accordance with primary legislation, even if
the Convention applies to his function, the defendant cannot pray in aid section
7(1)(b) of the HRA as a defence to this application so far as time limits
are concerned.
- But I have said that that is the short answer to "almost"
the whole of the defendants’ case on this application. What is not covered
by the short answer is the point taken on the second day of the hearing before
me, but not on the first, that the defendant was not given a public hearing
and the judgment was not pronounced publicly.
- It may be very difficult, and not necessarily very fruitful,
for an adjudicator to arrange a hearing between the parties, whether public
or not, within the constraints imposed on him by the 1996 Act but it has not
been suggested to me that it is impossible. Information about the conduct
of adjudications in general is hard to come by, but I doubt if there has ever
been a public hearing between parties to an adjudication. Sometimes there
is a hearing in private, sometimes not. Certainly, it would be possible for
the adjudicator to pronounce his decision publicly, but I doubt if that has
been done. In this connection, I should at once remark that while Article
6 speaks of the pronouncement of a judgment, the 1996 Act refers always to
the making of a "decision". It has been suggested that a register
of adjudicators’ decisions could be set up, but would parties to adjudications
want such a register? Mr. Clay has said that parties have quite enough trouble
getting off the register of County Court Judgments when they have not acted
in a way that should affect their credit-worthiness and they are unlikely
to want another register. Notwithstanding those considerations, it cannot
be said, following the words of section 6(2) of the HRA that "as the
result of one or more provisions of primary legislation, the authority could
not have acted differently".
- Because of the complaint of lack of publicity, I am compelled
not to be content with the short answer to this case but instead consider
the whole argument.
- The first question is, "Is an adjudicator a public authority
and on that account required not to act in a way which is incompatible with
a Convention right?" Looking at sub-sections (3) and (5) of section 6
of the HRA, one asks, "Are certain of the functions of an adjudicator
functions of a public nature? Is the nature of the acts done by the adjudicator,
the investigation of a dispute and a decision in the adjudication, private?"
- To help me answer those questions, I have asked for submissions
comparing an adjudicator to an arbitrator. It seems to be agreed that normally
an arbitrator exercises functions that are private in nature, just as his
jurisdiction springs from a private agreement. By agreement the parties to
an arbitration waive the right to a public hearing. On that analysis, it is
not a breach of the Convention that arbitrations should be heard in private
and the decisions of arbitrators given in private despite the requirement
of Article 6 of the Convention that there shall be a public hearing. Can the
same be said of adjudications?
- However, in asking about the position of the arbitrator,
one must remember that there are at least two questions. Is the arbitrator
a public authority? Have the parties waived some of their Article 6 rights?
Particularly when arbitration is in a sense compulsory, the arbitrator may
well be a public authority. In Bramelid and Malmstrom v. Sweden (1982) 29
DR 64 the applicants complained of proceedings before arbitrators who, under
Swedish company law ruled that majority shareholders in a company were entitled
to make a compulsory purchase of the applicants’ shares in a company at a
certain price. The Commission noted that, in accordance with Ringeisen v.
Austria (1997) EHRR 455 the purpose of the proceedings was to determine the
applicants’ private civil rights and obligations and the applicants were entitled
to a hearing before a tribunal within the meaning of Article 6(1). Anticipating
the decision in Bryan v. United Kingdom to which I shall later refer, the
Commission noted that the remedy before the District court was so limited
as to be negligible: and because it did not give the applicants the opportunity
to challenge the arbitrators’ decision, the Commissioners focussed their attention
on the arbitration procedure. The Commission said:
"Furthermore, the Commission notes that
a distinction must be drawn between voluntary and compulsory arbitration.
Normally Article 6 poses no problem where arbitration is entered into voluntarily
(cf App. No. 1197/61, 5 Yearbook 88). If, on the other hand, arbitration is
compulsory in the sense of being required by law (as in this case) the parties
have no option but to refer their dispute to an Arbitration Board and the
Board must offer the guarantees set forth in Article 6(1).
Since in this case recourse to arbitration
was compulsory, and since the applicants were unable to bring their case to
a court capable of settling the dispute and offering the guarantees set forth
in Article 6(1) of the Convention, the Commission has to consider whether
those guarantees were respected in the proceedings before the Arbitration
Board."
- But even when the arbitrator is a public authority, the parties
may waive their rights. That was recognised (obiter as we would say in English
proceedings) by the European Court of Human Rights in a criminal case, Deweer
v. Belgium (1980) 2EHRR 439, at page 460;
"The ‘right to a court’, which is a constituent
element of the right to a fair trial is no more absolute in criminal than
in civil matters. It is subject to implied limitations
In the Contracting States’ domestic legal
systems, a waiver of this kind is frequently encountered both in civil matters,
in the shape of arbitration clauses in contracts, and in criminal matters
in the shape, inter alia, of fines paid by way of composition."
- Waiver of the right to a public hearing was also considered
by the European Court of Human Rights in one of the many cases concerning
social security disputes. While social security disputes may seem a million
miles away from construction contracts, the judgment of the Court in that
case is remarkably apposite to the considerations arising in the present case.
I refer to Schuler-Zraggen v. Switzerland (1993) 16 ECHHR 405.
"58. The Court reiterates that the public character
of court hearings constitutes a fundamental principle enshrined in Article
6(1). Admittedly, neither the letter nor the spirit of this provision prevents
a person from waiving of his own free will, either expressly or tacitly, the
entitlement to have his case heard in public, but any such waiver must be
made in an unequivocal manner and must not run counter to any important public
interest.
In the instant case the Federal Insurance Court's Rules of
Procedure provided in express terms for the possibility of a hearing 'on an
application by one of the parties or of the [presiding judge'sl own motion."
As the proceedings in that court generally take place without a public bearing,
Mrs. Schuler-Zgraggen could be expected to apply for one if she attached importance
to it. She did not do so, however. It may reasonably be considered, therefore,
that she unequivocally waived her right to a public hearing in the Federal
Insurance Court.
Above all, it does not appear that the dispute raised issues
of public importance such as to make a hearing necessary. Since it was highly
technical, it was better dealt with in writing than in oral argument; furthermore,
its private, medical nature would no doubt have deterred the applicant from
seeking to have the public present.
Lastly, it is understandable that in this sphere the national
authorities should have regard to the demands of efficiency and economy. Systematically
holding hearings could be an obstacle to 'the particular diligence required
in social security cases," and could ultimately prevent compliance with the
'reasonable time' requirement of Article 6(1)."
There has accordingly been no breach of Article 6(1) in respect of the oral
and public nature of the proceedings."
- From this judgment one can infer,
- that where a right to a public hearing exists
that right can be waived;
- that such waiver can be inferred from a failure
to ask for a public hearing;
- technicality of the proceedings may make a public
hearing less desirable;
- in the interests of speed national authorities
may dispense with the requirement of public hearings.
All of those considerations apply in the present
case.
- An adjudication under the many standard forms of construction
contract that now provide for adjudication may appear simply on reading the
contract to be something freely agreed to between the parties, but in fact
it is not. Any construction agreement, as defined by the Act, that does not
contain adequate provision for adjudication will be subjected to compulsory
contract terms imposed by statute. For that reason, it is strongly arguable
that the nature of the act of the adjudicator cannot be said to be private
in the sense of section 6(5) of the HRA. Mr. Clay for the claimants on the
other hand argues that in building contracts there is a continuum of decision
makers spreading from certifiers (usually architects or engineers) to the
House of Lords. Some of those decision makers are readily identified as being
in the terms of the HRA "a court or tribunal", some (like certifiers)
are not, and some, like adjudicators fall on the borderline. Even the position
of certifiers is not easily allocated: sometimes the parties agree that the
certifier’s decision shall be conclusive and final.
- In the matter of definition in this regard the HRA provides
a little help. In more than one section it is said that "court includes
a tribunal" and in the definition section 21, it is said, "Tribunal
means any tribunal in which legal proceedings may be brought".
- Unlike a certifier, an adjudicator is only appointed when
there is a dispute. That puts the adjudicator closer along the scale to a
court or tribunal. The French text of Article 6, but not the English text,
requires that for Article 6 to apply, there must be a "contestation",
or dispute. It does not follow that wherever there is a dispute Article 6
applies. In Fayed v. United Kingdom (1994) 18 EHRR 393 it was said that for
an individual to be entitled to a hearing before a tribunal, there must exist
a dispute or ‘contestation’. For there to be an adjudication there must be
a dispute. But the Court continued:
"It follows, so the Court’s case law
has explained, that the result of the result of the proceedings in question
must be directly decisive for such a right or obligation, mere tenuous connections
or remote consequences not being sufficient to bring Article 6(1) into play."
- Applying the definition of "tribunal" in section
21 of the HRA in the light of the decisions to which I have referred, I do
not regard an adjudicator under the 1996 Act as a person before whom legal
proceedings may be brought. Legal proceedings result in a judgment or order
that in itself can be enforced. If the decision at the end of legal proceedings
is that money should be paid, a judgment is drawn up that can be put in the
hand of the Sheriff or Bailiff and enforced. That is not the case with an
adjudicator. The language of the 1996 Act throughout is that the adjudicator
makes a decision. He does not make a judgment. Nor does he make an "award"
as an arbitrator does though he can order that his decision be complied with.
Proceedings before an arbitrator are closer to court proceedings because an
award of an arbitrator can in some circumstances be registered and enforced
without a judgment of the court. But the decision of an adjudicator, like
the decision of a certifier, is not enforceable of itself. Those decisions,
like the decisions of a certifier, can be relied on as the basis for an application
to the court for judgment, but they are not in themselves enforceable.
- The 1996 Act itself makes a distinction between the decision
of an adjudicator and legal proceedings. Section 108(3) provides that:
"The contract shall provide that the
decision of the adjudicator is binding until the dispute is determined by
legal proceedings, by arbitration (if the contract provides for arbitration
or the parties otherwise agree to arbitration) or by agreement."
There, Parliament clearly is not regarding
the decision of the adjudicator as having been reached as a result of "legal
proceedings".
- Section 108(3) of the Act is by no means conclusive of the
matter. I have looked for guidance to Benthem v. Netherlands (1985) 8 EHRR
1. At paragraph 30, the Court first considered the applicability of Article
6(1) to a dispute over an application for a licence to sell petrol at a garage.
The licence was refused on safety grounds. At page 8 the Court wrote:
"A. Existence of a 'contestation' (dispute) concerning a right
1. Principles adopted by the Court in its case law
32. The principles that emerge from the Court's case law include the following:
(a) Conformity with the spirit of the Convention requires
that the word 'contestation' (dispute) should [not] be 'construed too technically'
and should be 'given a substantive rather than a formal meaning'.
(b) The 'contestation' (dispute) may relate not only to 'the
actual existence of a ... right' but also to its scope or the manner in which
it may be exercised. It may concern both 'questions of fact' and 'questions
of law’.
(c) The 'contestation' (dispute) must be genuine and of a
serious nature.
(d)According to the RINGEISEN judgment of 16 July 1971, 'the
... expression "contestations sur (des) droits et obligations de caractere
civil"' [disputes over civil rights and obligations] covers all proceedings
the result of which is decisive for [such] rights and obligations'. However,
'a tenuous connection or remote consequences do not suffice for Article 6(1)
. . . : civil rights and obligations must be the object----or one of the objects--of
the 'contestation' (dispute); the result of the proceedings must he directly
decisive for such a right’."
I have inserted the word "not" in
paragraph 32(a) as it appears from an examination of the decision in Le Compte
et al v. Belgium 4EHRR 1 that there is plainly a misprint in the report of
Benthem.
- The court cited the case of Ringeisen v. Austria already
cited by me, and to which I shall later refer again, but then, unfortunately,
said "The court does not consider that it has to give on this occasion
an abstract definition of the concept of ‘civil rights and obligations’. In
its view, the proper course is to apply to the present case the principles
set out above". The facts of that case are so far removed from adjudication
that it is difficult to extract from the facts of the decision any guidance
as to the applicability of Article 6(1) in the present case.
- A further submission made on behalf of the claimants is that
the adjudicator does not look like a tribunal. He is an ad hoc appointee of
the parties. He might be appointed once only and never appointed again (though
that is not so in this case).
- The matter is finely balanced, but I find that an adjudicator
exercising functions of the sort required by the 1996 Act is not a public
authority and is not bound by the HRA not to act in a way incompatible with
a Convention right subject to the limitation provided by section 6(2) of the
HRA. Proceedings before an adjudicator are not legal proceedings. They are
a process designed to avoid the need for legal proceedings.
- I make that finding that an adjudicator is not bound in the
manner I have stated conscious that I have approached the matter from a different
direction from the decision of a brother judge of the Technology and Construction
Court, His Honour Judge Havery Q.C. in Elanay Contracts Limited v. The Vestry
[2001] BLR 33, a decision described by the Editors of the Building Law Reports,
de haut en bas, as "intellectually respectable" though in their
opinion wrong. In that case, Judge Havery said that Article 6 of the Convention
did not apply to an adjudicator’s award or to proceedings before an adjudicator
"because, although they are the decision or determination of civil rights,
they are not in any sense a final determination".
- At first sight, I was unwilling to agree that Article 6 can
only apply to the final determination of civil rights and obligations (leaving
aside criminal matters). I have therefore looked to the jurisprudence from
the European Court of Human Rights. In Ringeisen v. Austria (1971) 1 EHRR
455 para 94 the European Court of Human Rights held that Article 6(1) "covers
all proceedings the result of which is decisive for private rights and obligations".
In that case, decisions of Real Property Transactions Commission refusing
approval of sales of land were held to be subject to Article 6(1) because
they determined the applicant’s rights. Similar words were used in Robins
v. United Kingdom (1997) EHRR 527, in a case concerning the assessment of
costs. But the court in those cases was not considering whether the result
was required to be finally decisive. But the court in Ringeisen did add:
"The character of the legislation which
governs how the matter is to be determined (civil, commercial, administrative
law, etc.) and that of the authority which is invested with jurisdiction in
the matter (ordinary court, administrative body, etc.) are therefore of little
consequence".
- The adjudicator’s decision is binding until the dispute is
finally determined by legal proceedings, by arbitration, or by agreement:
see section 108 of the 1996 Act. The enforcement of an adjudicator’s decision
through the courts might put one party into liquidation or bankruptcy or save
the other from a similar fate. An adjudicator’s decision may be at least as
important as a decision of a court making an order for a temporary injunction
or for a payment on account. No one would suggest that a court making orders
of that sort should not comply with the common law rules of natural justice.
But the decision of Judge Havery is supported to some extent by a decision
of the European Court. However, as I read that decision, it does not suggest
that Article 6 does not apply, but rather that if one views that matter in
the round there is unlikely to be a breach of Article 6.
- The decision to which I refer is Bryan v. United Kingdom
(1995) 21 EHRR 342. In that case, the decision was that the whole process
should be looked at as one. At page 359 the court said:
"Even where an adjudicatory body determining
disputes over ‘civil rights and obligations’ does not comply with Article
6(1) in some respect, no violation of the Convention can be found if the proceedings
before that body are ‘subject to subsequent control by a judicial body that
has full jurisdiction and does provide the guarantees of Article 6(1)’ ."
- If, contrary to my opinion, the adjudicator is a public authority
for the purposes of the HRA, one should consider not just his decision taken
alone but also the whole process necessary to enforce his decision. If one
considers the whole of that process, including the court proceedings necessary
to enforce the decision then there is necessarily a public hearing before
the decision is enforced (if enforcement be necessary) and all the other requirements
of Article 6 are satisfied. To illustrate the principle behind that decision
one need look no further than consider the long standing process of the court
granting an interim injunction without notice, or ex parte as it used to be
said. An injunction granted without notice to the defendant, if viewed on
its own, is made in breach of the rules of natural justice and in breach of
Article 6 of the Convention. To test whether there is a breach of Article
6 or of the rules of natural justice, one must look at the process as a whole,
including the urgency of the situation, the safeguards ordered by the court
including a cross-undertaking in damages, and, more importantly, an order
limiting the length of the injunction in time until an early public hearing
on notice to the defendant. One has to balance against those safeguards the
consideration that the rights of the citizen, such as the rights of a newspaper’s
rights of freedom of expression, may be seriously limited and the short period
of the limitation of those rights may be very important. For example, publication
of a news item of great public interest and importance might be prevented
in a Sunday newspaper on one weekend and held over to the next weekend without
that newspaper having been given an opportunity to put its case.
- One of the points mentioned by Judge Havery in the Elanay
Case was the fact that proceedings before an adjudicator are not in public
while Article 6 of the Convention requires a public hearing. Whether proceedings
are heard in public cannot be a part of the test whether Article 6 applies
to the proceedings: rather whether there is a hearing in public goes to the
question whether there is a breach of Article 6.
- The next question then is, if I am wrong in finding that
the Convention does not apply to the decision of an adjudicator, Has this
adjudicator acted in a way incompatible with a Convention right?
- In answer to that question, the defendants first rely on
Dombo Beheer B.V. v. The Netherlands (1993) EHRR 213. In that case, the court
said, at page 230:
"The Court agrees with the Commission
that as regards litigation involving opposing parties private interests, ‘equality
of arms’ implies that each party must be afforded a reasonable opportunity
to present his case including his evidence under conditions that do not place
him at a substantial disadvantage vis-à-vis his opponent."
But it is most significant that having said
that, the Court then continued,
"It is left to the national authorities
to ensure in each individual case that the requirements of a ‘fair hearing’
are met."
- It follows in my view, that the decision of Dombo Beheer
B.V. v. The Netherlands is not an authority for questioning primary or secondary
legislation of the United Kingdom in this regard. In particular, it is not
an authority for questioning the procedure required by the 1996 Act.
- If the criticism of the adjudicator is limited to the criticism
that he has applied the statutory 28 day time limit for his decision so that
only a short time was made available for the defendants to make their response
to the referral, then I find that sub-section 6(2)(a) of the HRA applies so
as to remove the stigma of unlawfulness from the acts done by the adjudicator.
As a result of provisions of primary legislation, the adjudicator could not
have done differently. It is not disputed that the time limits he set, though
tight, were necessary in order for him to comply with the 28 day time limit
for his decision imposed by statute.
- Turning to the complaint now made of the lack of publicity,
I consider section 7 of the HRA. I have quoted that section in paragraph 21
of this judgment. By reason of that section the defendant can rely on the
Convention rights in legal proceedings (if contrary to my decision those rights
do apply here) "but only if he is (or would be) a victim of the unlawful
act". So far as lack of publicity goes, is the defendant a "victim"?
The defendant has not behaved like a victim in this regard. The defendant
could have, but did not, ask the adjudicator at the outset or at any time
before his decision for a public hearing and public pronouncement of the decision.
- Mr. Letman on behalf of the defendants submits that his clients
did ask for a hearing. He says that maybe his clients did waive their rights
to a public hearing but not to a hearing. Mr. Letman relies on the last paragraph
of a letter dated 1 December, 2000 from Mr. Scott to the adjudicator in which
he said:
"In conclusion it seems to me that the
best way forward would be for you to chair a meeting between the Referring
Party and their adviser and the Respondent Party and myself to see if we can
reach a reasonable financial settlement of this matter. I repeat that based
upon last April’s discussion we are not far apart on figures and it should
be possible to settle the matter."
That was not a request for a hearing of the
matters in dispute. It was a request for the adjudicator to take on another
role, as conciliator or mediator to help the parties reach a settlement. It
was not a request for him to have a hearing to help him reach a decision.
It was no part of the role of the adjudicator to take on the role of conciliator
or mediator and I do not read that letter as a request for a hearing.
- Following the decisions in In Schuler-Zagren v. Switzerland
28 May, 1993, to which I have already referred and the Hakanson and Sturesson
v. Sweden judgment of 21 February, 1999, I find that the defendants did waive
any right to a public or private hearing (if any existed) by failing to ask
for a hearing.
- It is interesting that the decision of Schuler-Zagren was
based partly on a ground of expediency that may well apply to adjudications
(though I have heard no evidence to that effect). It was said at paragraph
57 that the number of judgments in the Federal Insurance Court, approximately
1,200 per year, would drop dramatically if public oral hearings were to be
the rule and in such an event the lengthening of the proceedings would seriously
jeopardise access to the Supreme Court.
- The defendant did not complain of the lack of publicity until
the second day of the hearing before me, prompted, I suspect, by my pointing
out that if Article 6 applied there might have been a breach of the Article
in that regard. It might well be demonstrated hereafter that there is a public
interest in public hearings or at least in public promulgation of the decision.
A number of people, including the judges, would be helped if they could find
out more about what was happening in adjudications generally. Equally, there
may be a conflicting public interest that there should be an absence of publicity.
But in any event, I do not think that it is open to someone involved in an
adjudication who has not asked for publicity to wait until he has lost and
then complain of the lack of publicity.
- Accordingly, there are four reasons why the defendant cannot
complain of the lack of publicity:
- Article 6 does not apply;
- If Article 6 does apply, when considering the whole
process including the court hearing there is no breach of the Article;
- If there is a breach with regard to publicity, the
defendant is not a "victim" and cannot rely on the Convention
right in legal proceedings.
- The defendant has waived any right to a hearing that
existed.
- I turn from general considerations to the particular facts
of this case.
- The defendant complains in the Defence:
"By fax and letter dated 09.1 1.00 the Adjudicator confirmed that he
had been formally nominated to Act as Adjudicator and required the Claimant
to issue its Referral Notice on or before 1 0. 1 1. 00.
By fax and letter dated 1 0. 1 1. 00 the Adjudicator recorded that he had
received the Referral Notice and required the Defendant to serve its Response
on or before 17.1 1.00. The Referral Notice comprised 2 substantial lever
arch files of documentation running to in excess of 500 pages.
By letter dated 16.1.00 the Defendant by its surveyor Michael Scott FRICS
served an outline Response to the Referral Notice.
By letter dated 21.1.00 the Adjudicator
required the Defendant to serve a
detailed breakdown of their Final Account assessment by 24.1 1.00.
By letter dated 22.11.00 the Defendant
by Mr Scott protested that there was insufficient time for a full and adequate
response to the assessment and requested an extension of time to 0 1. 12.
00.
The Claimant did not consent to the requested extension and by fax and letter
dated 23.11.00 the Adjudicator refused
the request for further time and thereafter purported to decide the matter
without more."
- What is said in that Defence is factually correct, but certain
facts are omitted. The two lever arch files sent with the referral notice
contained documents that had been in the possession of the defendants long
before their delivery and during the ordinary process of the contract. Moreover,
the draft Final Account had been delivered long before the referral, on 8
March, 2000. 9 months passed between the delivery of the draft Final Account
and the Referral Notice to adjudication. During all those months, the defendants
had ample opportunity to prepare comments on the draft Final Account and to
make their own assessment of the Final account. This was not a case of an
ambush by the referring party.
- The adjudicator having asked for a response by 17 November,
2000, received a response on 16 November dealing mainly with alleged defects.
The response did not respond to the draft Final Account, nor did it include
the contract administrator’s own assessment of the Final Account which should
have been in existence by this time. So far from preventing the defendants
from putting their case, on 21 November, the adjudicator asked the defendants
for more information: he asked for their Final Account assessment by 24 November.
That was a short time limit, but he was not asking them to do the work in
that time, he was asking to be given the product of work that he reasonably
assumed would have been done long since. On 22 November, 2000, the contract
administrator asked for an extension of time until 1 December, 2000. If the
adjudicator had granted that extension, it is unlikely that the adjudicator
would have been able to produce his decision in the time required by statute
and the contract and he said as much in his reply by letter of 23 November,
2000. But the adjudicator still tried to make progress. Since he plainly was
not going to get what he had asked for, he asked for something else that might
reasonably have been forthcoming. In his letter of 23 November, 2000, the
adjudicator wrote:
"Under clause 8.1 (D5.3) of the contract
I am required to make a decision within 28 days of the Referral. If I were
to agree to the request of Mr. Scott I would be severely restricting the time
available to me to fully assess the document in order to make my decision.
Therefore I feel I cannot agree to extend
the time as requested. In order that some progress can be made I request that
Buckland send me their build up to the last payment, on 31 January, 2000.
I will then decide how to proceed with my decision."
- That effort by the adjudicator, taken entirely properly to
try to get some information, was also fruitless. But the defendants did have
the last word in the adjudication. By letter dated 1 December, 2000, the date
to which he had asked for an extension, Mr. Michael Scott on behalf of the
defendants made a long statement of the defendants’ complaints. On receipt
of that letter, the adjudicator at last had a long statement of case from
the defendant. It did not include the information for which he had been pressing,
but that was by no means his fault.
- On the particular facts of this case, I find that there is
no sustainable complaint upon the allegations against the adjudicator that
he has breached Article 6 of the Convention on Human Rights (even supposing
that that Article were to apply at all or without qualification) or failed
to comply with the well-known rules of natural justice.
- I should make it plain that although in my view Article 6
of the Convention on Human Rights does not apply to the acts and decisions
of adjudicators in construction contracts, adjudicators are required expressly
by section 108(2)(e) of the Act of 1996 to act impartially. Where the Statutory
Scheme under the 1996 Act applies, paragraph 12 of the Scheme sets out the
duty to act impartially in more detailed terms, and paragraph 17 requires
that
"The adjudicator shall consider any relevant
information submitted to him by any of the parties to the dispute and shall
make available to them any information to be taken into account in reaching
his decision".
- I may be at fault in this regard, and if I am my error will
be speedily pointed out (one of the advantages of public promulgation of decisions),
but I do not see in the JCT form on which the parties contracted any term
corresponding to paragraph 17 of the Scheme. If there is no such term, then
in my view there is a requirement of natural justice under the common law
to the same effect.
- It has been argued in other cases that the rules of natural
justice do not apply to adjudications. I believe that the rules of natural
justice do apply to adjudications subject to limitations.
- It has been suggested in other cases that Dyson J. decided
in Macob Civil Engineering v. Morrison Construction Limited (1999) that breaches
of natural justice by an adjudicator did not invalidate his decision. I do
not believe that that is a fair summary of the decision of Dyson J., as I
explain in my judgment in the case of Discain Project Services Limited v Opecprime
Development Limited. I refer not to my judgment on the application for summary
judgment in that case but to my judgment at the trial.
- Two of the rules of natural justice were re-stated by the
Privy Council in Kanda v. Government of Malaya [1962] AC 332. Lord Denning
put the rules in two words, impartiality and fairness. He also put them in
two Latin maxims, Nemo judex in causa sua, and Audi alteram partem. It is
the later maxim that is said to have been offended in the present case. That
decision of 1962 should be read in conjunction with the decision of the Court
of Appeal in Director General of Fair Trading v. Proprietary Association of
Great Britain [2000] All ER (D) 2425.
- In practice, I would think that adjudications are governed
by rules of natural justice that are not very far different from Article 6
of the Convention except for the requirement of a public hearing and public
pronouncement of the decision. The time limits that are under attack in this
application are also subject to the rules of natural justice, but there is
no question of an Act of Parliament being attacked in the courts as being
in breach of the rules of natural justice. In our democracy, Parliament is
still regarded in the Courts as supreme. The adjudicator was constrained by
Act of Parliament to impose the time limits that he did, so he cannot be criticised
for breaching the rules of natural justice. I agree with the statement of
His Honour Judge Humphrey Lloyd Q.C. in Glencot Development and Design Co.
Ltd. v. Ben Barrett & Son (Contractors) Limited Unreported 13 February,
2001 that, "It is accepted that the adjudicator has to conduct the proceedings
in accordance with the rules of natural justice or as fairly as the limitations
imposed by Parliament permit".
- For all those reasons, I find that the decision of the adjudicator
should be enforced by summary judgment of this court. I therefore give judgment
for the claimants (taking into account a subsequent payment) for £50,412,,.08
plus interest and VAT in a sum to be assessed if not agreed. I invite argument
as to costs.
The defendants’ application on the counterclaim:
- The defendants apply for summary judgment on their counterclaim.
- The first response of the claimants was to apply for an order
that the counterclaim be stayed to arbitration. By Article 7A of the contract,
it was provided that the parties agreed to submit to arbitration "any
dispute or difference as to any matter or thing of whatsoever nature arising
under this Agreement or in connection therewith except in connection with
the enforcement of any decision of an Adjudicator appointed to determine a
dispute or difference arising thereunder". Unfortunately, and in my view
unnecessarily, Article 7B contained an express submission of disputes to the
court. Unless parties entering into a contract on this form cross out either
Article 7A or 7B (as required by a note to the form) they make a contract
in which two articles are in direct conflict. That was the starting point
of the consideration of the evidence that led to my finding that there was
no agreement for arbitration in this case. I emphasise that that was only
the starting point. There was more for me to consider than that and I repeat
that I am not going to repeat the reasons given orally. I made my ruling on
that point early on the first day of the hearing, 16 March, 2001. I heard
submissions on that point as a discrete point and gave judgment orally ex
tempore.
- I quote Article 7A only to show that the claimants, if successful
in their submissions, could have obtained both a judgment to enforce the decision
of the adjudicator and an order that the counterclaim (upon which they say
the adjudicator had pronounced) be stayed to be heard by an arbitrator. In
that event, the claimants would have had a money judgment against the defendants
with no judgment against themselves.
- Having failed to obtain a stay to arbitration on the counterclaim,
the claimants submitted on 20 March, 2001 that the fact that the adjudicator
had ruled against the defendants on the issues the subject of the counterclaim
showed that there was an issue to be tried.
- On 20 March, I adjourned the matter so that I might consider
my judgment.
- On 27 March, 2001, I heard an application from the claimants
for leave to put in further evidence in response to the defendants’ application
for summary judgment on the counterclaim. Mr. Clay said that he made the application
"out of an abundance of caution".
- Having heard argument, and it being accepted that I have
a discretion in the matter, I gave permission for the further evidence to
be put in. Counsel for both parties agreed that it would be better to defer
consideration of the defendant’s application for judgment on the counterclaim
in the light of that evidence until after delivery of my judgment on the other
issues in these applications. To consider the whole of the evidence submitted
would take a considerable time.
- I invite submissions for directions as to the disposal of
this action generally including the counterclaim. It may be that one of the
directions applied for will be a stay of execution on the judgment that I
have made until after I have heard in full the application for summary judgment
on the counterclaim. In saying that, I am not in any way prejudging the decision
whether or not to grant a stay.
- I am extremely grateful to counsel for their most helpful
submissions and for the time and cost involved in providing me with copies
of many helpful authorities.