London & Amsterdam Properties V Waterman Partnership Ltd: An Essay On Adjudication In Construction Law.

Explain how the case of London & Amsterdam Properties Ltd. v. Waterman Partnership Ltd. [2003] EWHC 3059 (TCC) helps to define the limits and limitations of adjudication as a dispute resolution process.

Your essay must show your depth of understanding and your ability to apply the topics covered in class and from the texts you have read to real life situations.

London & Amsterdam Properties v Waterman Partnership Ltd is a case where Waterman Partnership was involved in a deed appointment to act as consultants for a structure and consult in traffic maters for a shopping centre development for LAP. LAP asserted that there was a critical delay of the work because of Waterman's delay in releasing substantial information by specific dates. Therefore, LAP claimed that Waterman was professionally negligent. On 6th May 2003, the matter was decided by adjudication in favour of LAP, where they were required to pay Eur 708, 796.95, inclusive of interest plus the adjudicators' fees (Bunni, 2013, p.18).

According to Waterman, the adjudicator did not have jurisdiction hence for a declaration that the adjudicator did not have jurisdiction, based on the CPR. Waterman claimed that he exceeded his jurisdiction. LAP, on the other hand, applied for a summary decision on the whole amount under article 24. Waterman rejected the adjudicator's decision because the adjudicator had prior knowledge of the issues involved and also had confidential information. They also claimed that he was not a qualified engineer but a chattered professor that a direct response was made even before the referral. That the referral ought not to have exceeded 20 pages and that Waterman did not have sufficient opportunity to respond to the case and that the adjudicators' decision was not consistent with section 25 of the scheme. During the adjudication, the adjudicator's proposal was to charge what he deemed reasonable fees, and he was charging a an hourly rate.

Under section 25, the adjudicator was entitled to any fees, as long as it was considered reasonable. The court In considered whether prior knowledge was a breach of natural justice; and the court stated that prior knowledge was anticipated, but in regards to any confidential information the court stated that the Adjudicator ought to have recused himself. In the case, the adjudicator only knew about the risk but did not recuse himself hence the application was dismissed. Waterman also asserted that no dispute had materialised at the time of referral hence no dispute at the time the decision was made. Waterman further asserted that his natural justice rights were breached when he was not given enough time to deal with the claims in the new evidence. Waterman previously tried to obtain information for the additional claims to no success.  Wilcox sated that a dispute existed because there were claims made and the quantum corroborated that.

Issues in the Case

Considering whether the claim on breach of natural justice, the court stated that when the original quantum statement was served, a supplemental was served to address the issues not addressed in the new statement of evidence. An excess of 1000 pages was filed, and a decision based on the new information was an ambush to Waterman. In consideration of the ambush, the court observed that it was deliberate and unattractive. The court said that it did not amount to procedural unfairness, but regardless, should have given Waterman sufficient time to respond to the evidence. If Waterman did not get sufficient time to respond to the evidence, then the adjudicator should have excluded the evidence. Since the adjudicator did not appreciate the importance of giving Waterman sufficient time to respond, the lack of, amounted to a breaching his rights to natural justice. According to part 24, Waterman had, therefore, demonstrated an issue which was triable. Waterman had also made an assertion stating that the adjudicator could not differentiate between an error and professional negligence (Ndekugri, & Rycroft, 2012, p. 463). Waterman referred to several cases to influence the decision of the court. In the determination by the court, it was held that accepting the evidence, led to breach because the decision was based on the new evidence which Waterman’s response was not considered in reaching the decision. Wilcox also commented that if sufficient time was given to Waterman to respond then the evidence should have been accepted. Also, the adjudicator had failed to discharge his duty to act impartially.

The process of adjudication requires that the adjudicator acts in an affair and impartial manner, therefore, in the case of Waterman, not accepting the new evidence would have been a fair decision. JCT 2016 clause 9.2 states that a dispute will be referred to adjudication if either of the parties wishes to refer the dispute to adjudication. The section further states that the adjudicator will be nominated according to the particulars of the contract. Under this section, the adjudicators are required to have expertise, discipline or experience. When an adjudicator does not have the specific expertise, the will pick an expert who will write a report and advice on the issues. 

The process of adjudication has also been handled differently by the courts as we see in case laws. HHJ Wilcox in Waterman's case was of the opinion that he could not interfere with adjudicators' decision. He was bound by the case of Bouygues (UK) Limited v Dahl-Jensen. In this case, the plaintiff appealed against the decision by the adjudicator claiming that he decided the case outside the terms of reference. The court dismissed the appeal stating that the adjudicator only failed to answer the right question; therefore, they could not interfere with the adjudicator's award. In this case, the adjudicator excluded retention while calculating the sums. In effect, the sum was to be released to Dahl-Jensen who was not entitled to the sum under the contract. Hence the court held that the adjudicator was only mistaken on calculations, but he was within his jurisdiction. The decision was enforced because the decision awarded Dahl-Jensen the retention money rather not the release of the money

Adjudication in Construction Law

In Lovell Projects Ltd v Legg and Carver, the parties entered into a contract under the JCT agreement for minor building works, and they had contractual rights to adjudication. Lovell, in this case, was engaged in the construction of minor building works, and later commenced adjudication proceedings because of non-payment. The adjudicator decided in his favour, finding that Eur 85,873.59 was due to Lovell. Legg then argued that the adjudication provision led to unfairness and imbalance (David, 2016 p.45-60). The court concluded that the terms were fair because any of the parties could have gone for adjudication. The court also considered good faith, where he found that there were no traps where one party had the upper hand by not revealing information to the other party. This decision is a contrast to the decision of Picardi v Cuthbert CILL (2003) 180, where the adjudication process was said o be unfair and unusual.  This shows how a lot of agreements depend on how contractors appreciate the existence of contracts and the nature of agreements. In another case, Cosmite Projects Ltd v Andritz AG, sub-contracts were involved which stated that disputes were to be dealt with in the country. Cosmic asked for a declaration under section  105 (2) (c) of HGCRA, stating the works were under construction operations. Andritz relied on section 23, which required that the dispute was settled in Austria. Upon determination of the court, there were no limitations as using adjudications s a dispute resolution mechanism as Andritz asserted and Cosmite had the right to adjudicate (Salmon & Crook, 2012 p.1-30)

In contrast, sometimes the courts can reverse the decisions of adjudicators sometimes. Anisminic, O'Reilly v Mackman, and ex parte  Waterman relied on this case to argue that the decision by an adjudicator can be reviewed. In this case, the plaintiffs started proceedings alleging that the decision by home office and board of visitors was biased hence should be declared as null and void. The plaintiff also claimed that the decision was against natural justice. The defendants wanted the proceedings to be struck out. The court reversed the decision and struck out the process stating that the only remedy was by judicial review, not the court process (Pickavance, 2016, p.669).

Conclusion

In England and Whales, it's mostly, almost impossible to attack and adjudicators decision as being lawfully wrong. If the issue in adjudication is not clear-cut, then the unsatisfied party can seek redress from the court. Adjudicators need to determine at first instance, whether they have jurisdiction at first instance when a dispute is referred to them if they have the jurisdiction before proceeding. The adjudicators also ought to follow the law and rules of evidence when making decisions as we see in the case of Waterman. Generally, legislation allows for adjudication where any parties and in contractual terms allow for adjudication as a method of resolving disputes (John, 2013). Sometimes the courts look at the parties’ position and what the contract entailed in regards to adjudication. Some case-laws show good-faith is applicable sometimes and unfair practices can also be dismissed (Pickavance, 2016, p.669).

Adriaanse, M. J. (2016). Construction contract law. Palgrave Macmillan.Bibliography

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London & Amsterdam Properties Limited v Waterman Partnership Limited. Case reference:[2003]EWHC 3059 (TCC)

Ndekugri, I., & Rycroft, M. (2012). The JCT 05 Standard Building Contract. Routledge.on the enforcement of construction adjudication. Milton Keynes: AuthorHouse.

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