COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Toulmin CMG QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE CHADWICK
LORD JUSTICE DYSON
| AMEC CAPITAL PROJECTS LTD
|- and -
|WHITEFRIARS CITY ESTATES LTD
Smith Bernal WordWave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr David Thomas QC (instructed by Messrs Kingsley Napley) for the Respondent
Crown Copyright ©
Lord Justice Dyson:
“39A.2 The Adjudicator to decide the dispute or difference shall be, on the application of either Party, either
the individual with whom the Parties have executed the “JCT Adjudication Agreement for an Adjudicator Named in a Contract” (being the individual named as the Adjudicator in Appendix 1 or a person nominated by him), or
where no such agreement has been executed, the individual named as the Adjudicator in Appendix 1,
or in the event of his unavailability a person nominated by him, or
the individual with whom the Parties have executed an Adjudication Agreement pursuant to clause 39A.3. Provided that
.2.1 where either Party has given notice of his intention to refer a dispute to adjudication then any application to the person named as the Adjudicator in Appendix 1 or any agreement or nomination under clause 39A.3 must be made with the object of securing the appointment of, and the referral of the dispute or difference to, the Adjudicator within 7 days of the date of the notice of intention to refer..2.2 upon receipt by the Parties, from the individual named as the Adjudicator in Appendix 1, of confirmation of his availability or of the name of the person nominated by him the Parties shall thereupon execute with that individual or that person as the case may be the “JCT Agreement for an Adjudicator Named in a Contract.”
39A.3 If the Adjudicator dies or becomes ill or is unavailable for some other cause and is thus unable to adjudicate on a dispute or difference referred to him then
.1. either Party may apply to the individual named as the Adjudicator in Appendix 1 to replace the Adjudicator to adjudicate that dispute or difference save that
.2. if the individual named as the Adjudicator in Appendix 1 is unavailable then either Party may apply to the partner or director who is managing (for the time being) the practice of such named individual
and the Parties shall execute the JCT Adjudication Agreement with the replacement Adjudicator. Provided that if the Adjudicator has executed with the Parties the “JCT Agreement for an Adjudicator Named in a Contract” and he is unable by reason of illness or other cause to adjudicate on a dispute or difference referred to him any appointment under clause 39A.3 shall not terminate the Adjudication Agreement of that individual with the Parties.”
“the Adjudicator will be George Ashworth of Davis Langdon & Everest, or in the event of his unavailability a person nominated by him.”
“ As previously advised to your solicitors, Kingsley Napley, there is no George Ashworth at Davis Langdon & Everest and so, the terms incorporated into the contract fail to provide a mechanism that will allow our client to appoint and instruct an adjudicator in accordance with section 108(2)(b) of the Act. The only Mr Ashworth who could be identified at Davis Langdon & Everest was a Geoffrey Ashworth who sadly died a few weeks ago.
In the circumstances, as a result of section 108(5) the Act, the adjudication conditions of the contract are void and therefore, the adjudication provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1999 (“the Scheme”) apply.
Pursuant to paragraph 2(c) of the Scheme and in compliance with section 108(2) of the Act, we hereby inform you that we will be applying forthwith to the President of the Royal Institute of British Architects (“RIBA”) to nominate an adjudicator.”
“Given that our present application is in relation to the same dispute and bearing in mind that RIBA nominated Mr Biscoe as adjudicator and he made a decision thereon, we suggest that in the interests of saving time and costs, it makes sense that Mr Biscoe be nominated again”
The jurisdiction point
Breach of natural justice
The legal principles
“Bias is an attitude of mind which prevents the judge from making an objective determination of the issues that he has to resolve. A judge may be biased because he has reason to prefer one outcome of the case to another. He may be biased because he has reason to favour one party rather than another. He may be biased not in favour of one outcome of the dispute but because of a prejudice in favour of or against a particular witness which prevents an impartial assessment of the evidence of that witness. Bias can come in many forms. It may consist of irrational prejudice or it may arise from particular circumstances which, for logical reasons, predispose a judge towards a particular view of the evidence or issues before him.”
“25. It would be dangerous and futile to attempt to define or list the factors which may or may not give rise to a real danger of bias. Everything will depend on the facts, which may include the nature of the issue to be decided. We cannot, however, conceive of circumstances in which an objection could be soundly based on the religion, ethnic or national origin, gender, age class, means or sexual orientation of the judge. Nor, at any rate ordinarily, could an objection be soundly based on the judge's social or educational or service or employment background or history, nor that of any member of the judge's family; or previous political associations; or membership of social or sporting or charitable bodies; or Masonic associations; or previous judicial decisions; or extra-curricular utterances (whether in textbooks, lectures, speeches, articles, interviews, reports or responses to consultation papers); or previous receipt of instructions to act for or against any party, solicitor or advocate engaged in a case before him; or membership of the same Inn, circuit local Law Society or chambers (see K.F.T.C.I.C. v Icori Estero S.p.A. (Court of Appeal of Paris, 28 June 1991, International Arbitration Report, vol. 6, 8/91)). By contrast, a real danger of bias might well be thought to arise if there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of an individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person's evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalanced terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakauta v Kelly (1989) 167 CLR 568); or if, for any other reason, there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him. The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be.”
Apparent bias in this case
“30.3.4 Not later than 5 days before the final date for payment of an amount due pursuant to clause 30.3.3 the Employer may give a written notice to the Contractor which shall specify any amount proposed to be withheld and/or deducted from that due amount, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground.
30.3.5 Where the Employer does not give any written notice pursuant to clause 30.3.3 and/or to clause 30.3.4 the Employer shall pay the Contractor the amount stated in the Application for Interim Payment.”
“7.2 My task is to apply the terms of the contract to the facts of this dispute. It is clear that whatever Whitefriars' complaints against AMEC may have been, when presented with a valid application for payment, it failed to follow the terms of the letter of intent and the draft amended JCT contract that it had drawn up with such care. It did not at any time serve a withholding notice which it had to do if it was to avoid the obligation to meet each application in full. This oversight, which I assume it to have been, occurred twice and inevitably means that it must meet the invoices in full.”
Three further arguments
The telephone conversation
“I had a telephone conversation with Mr Peter Cassidy of Masons on Friday 7 Nov 2003. I confirmed that I had already heard from the RIBA regarding an adjudication I had decided a few months ago concerning AMEC and Whitefriars. I understood that I would be receiving papers shortly. Mr Cassidy wished to know to which office he should send them. I informed him he should send them to Collier House.
I enquired why the matter had been referred to me again and Mr Cassidy explained that his client had taken enforcement proceedings following the issue of my decision and the judge had not enforced the decision. This was to do with a named adjudicator being in the appendix to the contract attached to the letter of intent. He reminded me that the question of whether the contents of the appendix were agreed or not agreed had been an issue between the parties. The judge had found that the named adjudicator should have heard the adjudication. Since the named adjudicator, Mr George Ashworth (but actually Mr Geoffrey Ashworth) of DLE, has since sadly died the matter was now open again and that his clients were referring the matter back to me as I would see from the documents when I received them. The reason for coming straight to me was that my familiarity with the facts would save time and cost.
I mentioned that I had already heard from the RIBA and would respond appropriately when I received the papers. I further mentioned that I had a very full diary for the week beginning 10 Nov and that I would not be able to deal with the matter until the following week.”
“ was of an administrative nature and the issues discussed were to allow me to understand why I was being involved again and were confined to matters of fact and did not in least prejudice the position of the Respondent nor benefit the Referring Party. It merely assisted me in understanding what was being asked of me.”
The advice in relation to jurisdiction
“126. The other contention has more substance. Where an adjudicator is seeking advice from a third party, it is essential that he informs the parties in advance (as Mr Biscoe did in the second adjudication), that he notifies the parties of how he has formulated the question on which the advice has been sought, so that the parties can evaluate the advice in context and, finally, he discloses the substance of the advice which he has been given and gives the parties an opportunity to comment on it before he reaches his decision. This did not happen in this case. Mr Biscoe declared that he had jurisdiction to act before he disclosed the advice from Clyde & Co. on which his decision was based. This was contrary to natural justice.
127. I am very conscious that the time limits may dictate the manner in which the steps are carried out, but it seems to me that justice demands that the parties should be informed of the questions asked of the third party expert, of the answers given by the expert and that an opportunity should be given to comment on the advice given by the expert in advance of the adjudicator's decision. I can see no distinction between expert advice given on the question of jurisdiction and advice which goes to the merits. See, for example, Discain Project Servics v Opec Prime Development Ltd.  BLR 402 at 405 per His Honour Judge Bowsher QC.”
Possibility of a claim
“The adjudicator shall not be liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith…”
“Both parties may be assured that I shall act in this case if I consider the correct course is for me to do so. I shall act impartially and in accordance with the correct procedure. I shall not be deterred from discharging my duties as an adjudicator and find it improper that solicitors representing the Respondent should attempt to deter me from acting by threats of action for damages and accusations of bias which are without substance”.
Lord Justice Chadwick:
Lord Justice Kennedy:
Order: The appellant's appeal is allowed. The respondent to pay the appellant the sum of £642,784.31 and the sum of £12,305.68 in respect of the Adjudicator's costs; its costs of appeal and the respondent's appeal and the costs of its claim below in case no: HT-04/05 to be assessed on the standard basis if not agreed; and the sum of £25,000 on account of its costs of its appeal and the respondent's costs. Application for a stay refused. Application for permission to appeal to the House of Lords refused.