Introduction
- By a Decision dated 17 May 2011, the adjudicator, Mr Daniel Atkinson decided that the sub-contractor, Lanes Group Plc ("Lanes") should pay the main contractor, Galliford Try Infrastructure Limited ("GTI") the sum of £1,360,145.28 (as later corrected) together with the adjudicator's fees ("the Decision"). On 23 May 2011, Lanes brought Part 8 proceedings to challenge the Decision. On 26 May 2011, GTI brought a separate claim to enforce. It is common ground that if Lanes' challenge succeeds on any basis there can be no enforcement, but if it fails, GTI will be entitled to summary judgment in the sums awarded by the adjudicator. So both claims were heard together.
- Lanes contends that Mr Atkinson's Decision is a nullity because:
(1) He had no jurisdiction to make it because GTI had previously commenced, but not pursued, an adjudication on the same point before a different adjudicator, namely Mr Howard Klein and was not entitled to start again before Mr Atkinson; and/or
(2) Mr Atkinson's Decision is the product of apparent bias.
- GTI denies both of these claims. In addition it contends that the point referred to in paragraph 2(1) above, even if well-founded, could and should have been made in an earlier injunction application heard by Mr Justice Akenhead shortly after commencement of the adjudication by Mr Atkinson whereby Lanes sought (unsuccessfully) to prevent its continuation. Accordingly, it is an abuse of process to make it now.
The Contract
- Lanes agreed with GTI to re-roof the Network Rail Traction Maintenance Depot in Inverness. It did so pursuant to an order dated 13 May 2008 made under the Civil Engineering Contractor's Association "Blue Form" Sub-contract terms and conditions ("the Sub-Contract"). Clause 18B thereof incorporated a right to adjudicate any disputes under the Institution of Civil Engineers ("ICE") Adjudication Procedure 1997 in the following terms:
"(1)(a) …the Contractor and the Sub-Contractor each has the right to refer any matter in dispute arising under or in connection with the Sub-Contract or the carrying out of the Sub-Contract Works to adjudication and either party may at any time give notice in writing (hereinafter called the Notice of Adjudication) to the other of his intention to do so. The adjudication shall be conducted under "The Institution of Civil Engineers' Adjudication Procedure (1997)"…
(b) Unless the adjudicator has already been appointed he is to be appointed by a timetable with the object of securing his appointment and referral of the dispute to him within 7 days of such notice."
The ICE Adjudication Procedure ("the Procedure")
- This provides, amongst other things, as follows:
"1.2 The object of adjudication is to reach a fair, rapid and inexpensive determination of a dispute arising under the Contract and this Procedure shall be interpreted accordingly.
1.3 The Adjudicator shall be a named individual and shall act impartially…
2.1 Any Party may give notice at any time of its intention to refer a dispute arising under the Contract to adjudication by giving a written Notice of Adjudication to the other Party. The Notice of Adjudication shall include:
(a) the details and date of the Contract between the Parties;
(b) the issues which the Adjudicator is being asked to decide;
(c) details of the nature and extent of the redress sought...
3.3 [If a specific adjudicator is not agreed upon]…then either Party may within a further three days request the person or body named in the Contract or if none is so named The Institution of Civil Engineers to appoint the Adjudicator. Such request shall be in writing on the appropriate form of application for the appointment of an adjudicator and accompanied by a copy of the Notice of Adjudication and the appropriate fee.
3.4 The Adjudicator shall be appointed on the terms and conditions set out in the attached Adjudicator's Agreement and Schedule and shall be entitled to be paid a reasonable fee together with his expenses. The Parties shall sign the agreement within 7 days of being requested to do so.
3.5 If for any reason whatsoever the Adjudicator is unable to act, either Party may require the appointment of a replacement adjudicator in accordance with the procedure in paragraph 3.3.
4.1 The referring Party shall within two days of appointment…under paragraph 3.3 send a full statement of his case which should include:
(a) a copy of the Notice of Adjudication;
(b) a copy of any adjudication provision in the Contract, and
(c) the information upon which he relies, including supporting documents.
4.2 The date of referral of the dispute to adjudication shall be the date upon which the Adjudicator receives the documents referred to in paragraph 4.1. The Adjudicator shall notify the Parties forthwith of that date.
5.1 The Adjudicator shall reach his decision within 28 days of referral, or such longer period as is agreed by the Parties after the dispute has been referred. The period of 28 days may be extended by up to 14 days with the consent of the referring Party.
5.4 The other Party may submit his response to the statement under paragraph 4.1 within 14 days of referral. The period of response may be extended by agreement between the Parties and the Adjudicator."
Termination and Adjudication
- On 28 April 2009 GTI terminated Lanes' employment under the Sub-Contract and/or claimed to have accepted its repudiatory breach and sought damages. This issue will be the subject of an arbitration to take place before Mr Justice Ramsey in January 2012.
- On 9 March 2011, GTI's solicitors in Glasgow, McGrigors, requested the ICE to appoint an adjudicator and sent to it a copy of its Notice of Intention to Refer a Dispute to Adjudication. In what follows I gratefully adopt the summary of facts set out by Akenhead J in his judgment in the injunction claim, Lanes Group Plc v Galliford Try Infrastructure Limited [2011] EWHC 1035.
- In its Notice, GTI sought a declaration that it had lawfully determined Lanes' employment under the Sub-Contract, or alternatively that Lanes had repudiated the Sub-Contract, and claimed over £2.7m. In the letter seeking an appointment, GTI suggested that Mr Mark Dixon be appointed because he had previously acted as adjudicator. This was copied to Lanes' solicitors. On the same day Lanes' claim consultants, Bunton Consulting Partnership ("Bunton"), wrote to McGrigors saying that any adjudicator appointed would have no jurisdiction. They also wrote to the ICE saying that it would be inappropriate for Mr Dixon to be appointed:
"My clients object to this gentleman. Mr Dixon acted as Adjudicator in a previous Adjudication between the parties. My clients consider that the matter was not handled to my clients' satisfaction and further…if he was appointed, in this current matter, that Mr Dixon would be biased against my clients."
- GTI's solicitors protested to the ICE about this.
- On 10 March 2011, the ICE appointed Mr Howard Klein FCIArb, FIOB, who also is a Chartered Quantity Surveyor. He wrote to the parties on 10 March 2011 confirming that he was willing to act and that he had accepted his appointment. Lanes by their consultants continued to reserve its position on jurisdiction and wrote to Mr Klein to that effect.
- On 11 March 2011, GTI's solicitors wrote to the ICE in the following terms:
"…You kindly nominated Mr Klein of Warrington as adjudicator. However, our firm view is that Mr Klein is not an appropriate adjudicator in this matter, as we shall explain. Our Mr Fraser conducted a series of adjudications about one year ago, in which Mr Klein acted for the other party. The series was relatively acrimonious, and involved suggestions of forgery and profoundly contradicting credibility. At one stage, Mr Klein misunderstood our submission that a witness statement may have been signed by someone other than its author. This episode triggered his attached fax (redacted to anonymise the parties). We had not, in fact, suggested that Mr Klein had done so, and Mr Klein had misunderstood our submission. With the greatest respect to Mr Klein, whose professional probity we do not question whatsoever, this history may make it difficult to him to be seen to be impartial in this new adjudication. Accordingly, we do not propose to proceed with the adjudication notice in which you have appointed Mr Klein. We have served a fresh adjudication notice, which is attached. We also attach a further
nomination application. We invite you to appoint an adjudicator other than Mr Klein (or, for that matter, Mr Dixon, whom you will recall was opposed by Lanes)…"
- Bunton wrote to the ICE on 14 March 2011 saying in effect that they could not nominate another adjudicator and that Mr Klein was not biased. In fact, the ICE was not prepared at that stage to appoint another adjudicator. As at this point GTI had not served its statement of case as it should have done under paragraph 4.1 of the ICE procedure. On 15 March 2011, Bunton wrote to GTI's solicitors:
"We contend that the decision by [GTI] not to serve its statement of case under paragraph 4.1 of the ICE Adjudication Procedure is a repudiatory breach of the adjudication agreement set out in clause 18B of the Sub-contract between GTI and Lanes. Which Lanes hereby accepts. If you were, or are, of the view that GTI have valid legal grounds to dispute Mr Klein's appointment as the Adjudicator, then the correct course absent Lanes' agreement which you do not have, was to invite him to resign on whatever valid legal grounds you maintain that he should do so, failing which you should apply to the Court that his removal. You have not done so. If and to the extent that our argument on repudiatory breach may be incorrect, therefore in the alternative, we have invited Mr Klein to dismiss your claims as set out in the Notice of Adjudication. For the avoidance of any doubt, Lanes will resist any application by GTI to serve fresh adjudication proceedings on the claims which are the subject of the current Notice of Adjudication."
- Mr Klein's position at that stage, however, was that unless he resigned for want of jurisdiction or a Court removed him, he remained the duly nominated Adjudicator to adjudicate upon the dispute. He added that if GTI served the Referral Notice and documentation later than stipulated, he would remain the adjudicator unless Lanes raised a jurisdictional challenge that the Referral had been served late and, therefore, he could not have jurisdiction.
- On 16 March, McGrigors wrote back to Bunton stating that Mr Klein effectively no longer had jurisdiction because there was no referral and there was nothing for him to do. They asserted that their clients were entitled to serve a fresh adjudication notice and would do so, arguing that there was no separate contract to adjudicate and it cannot therefore have been broken. On 21 March 2011, McGrigors served a fresh Notice of Adjudication and wrote to the ICE seeking a fresh nomination. On 24 March 2011, the ICE appointed Mr Atkinson.
- On 27 March 2011, GTI sent its Referral to Mr Atkinson.
The Injunction Application
- But on 1 April, Lanes issued Part 8 proceedings, seeking an injunction to restrain GTI from "continuing or making further applications to adjudicate a particular dispute". Lanes contended that "the Defendant's conduct [in seeking to refer the same dispute to adjudication three times] is unfair, unreasonable and oppressive and amounts to a breach of the adjudication agreement and/or is an abuse of process which ought properly to be restrained by the Court." This Claim was accompanied by an application for an interim injunction seeking to restrain GTI from pursuing the adjudication of the dispute or from making further applications to adjudicate the dispute which had been the subject of its applications and Notices of Adjudication dated 8, 11 and 21 March 2011.
- An initial hearing took place on 7 April. On that occasion Akenhead J dealt with, and rejected, a short point alleging that Mr Atkinson had no jurisdiction because of late service of the referral but otherwise, the case was adjourned until 18 April to allow for the reception of further evidence. In his written judgment dated 19 April, Akenhead J refused the injunction. At paragraph 28 he said this:
"I necessarily deal with this case on the basis upon which it has been argued by and on behalf of Lanes, namely that there is here an accepted repudiatory breach on the part of GTI in deliberately failing to serve its Referral within two days of Mr Klein being appointed."
- In a detailed analysis he concluded that GTI's refusal to pursue the adjudication with Mr Klein, by not serving the referral upon him, on the basis of his perceived apparent bias (see paragraph 11 above) did not amount to repudiatory conduct on its part thereby disabling it from bringing a second adjudication (ie before Mr Atkinson). His core reasoning was that the concept of repudiation could not apply at all in such circumstances. He then stated as follows:
"31. It is therefore technically unnecessary to consider whether or not there actually was repudiatory conduct on the part of GTI because the concept of repudiation simply is inapplicable and, even if it was not, there was no separable agreement to refer the specific dispute to adjudication which could be repudiated. Out of deference to the arguments and evidence put before the Court however, I will address briefly whether there was apparent bias on the part of Mr Klein and, even if there was not, whether there was a breach which evinced an intention not to be bound by the adjudication agreement:
(a) As indicated above, GTI was in breach of contract for not sending its Referral within two days of the appointment of Mr Klein, or indeed at all.
(b) I doubt that there was on analysis apparent bias of Mr Klein at the time of his appointment as adjudicator here. He and Mr Fraser of McGrigors represented unrelated parties on six or possibly seven adjudications in January 2010. Mr Fraser on behalf of his client suggested that a number of different witness's statements produced, nominally, by Mr Klein's client's witnesses, might all have been signed by the same person and he relied upon a handwriting expert to that end. Mr Klein described this as a "disgraceful tactic adopted by McGrigors" and he clearly believed that there was an inference that he himself had signed the statements. Mr Klein wrote on 15 January 2010 to Mr Fraser saying that he was not prepared to leave that allegation in place and he required Mr Fraser to write to the adjudicator withdrawing the allegation, failing which he would have no other option than to consider "legal action". Mr Fraser wrote back on the same day making it clear that he was not suggesting that Mr Klein had signed the witness statements; he still maintained however that the signatures were not those of the deponents. This prompted Mr Klein to suggest that the allegation was "spurious and vacuous" and that it was a "nonsense submission". He was later to write to the adjudicator on 26 January 2010 to suggest that the respondent in the adjudications was trying "to sabotage the management of the adjudication and disrupt… preparations". In effect, Mr Klein's clients lost the first of these adjudications and then they discontinued the remainder. Mr Klein did incur a relatively small bad debt.
(c) Whilst I can see that there would be and was some apprehension on the part of Mr Fraser about the appointment of Mr Klein, I do not see that a heated "spat" between parties' representatives 14 months before would or would necessarily give rise to apparent bias on the part of Mr Klein. I do not see that, objectively speaking, a fair-minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that Mr Klein was biased, would conclude that there was a real possibility that he was biased. One can not, of course speculate as to what might have happened if the adjudication had continued with Mr Klein but I have no reason to believe that he would have acted anything other than fairly.
(d) On the evidence presented to the Court, it seems clear that Mr Fraser had an honest belief that there might be apparent bias, albeit that the test for such bias has not ultimately been established. In any event, his clients had a fairly tight window in which to serve the Referral documentation once they became aware of the appointment of Mr Klein.
(e) I consider that it would be difficult in those circumstances to find that the breach of contract on the part of GTI in not serving its Referral documentation within time was such as to be repudiatory, although it was deliberate. This is because there was an honest if mistaken belief that the grounds for apparent bias existed. In any event, the very fact that GTI sought on 11 March 2011 a further nomination from the ICE suggests strongly that it was not objectively evincing an intention no longer to be bound by the adjudication agreement.
32. There is at the very least a lacuna in the HGCRA and in many standard form adjudication agreements which would allow a referring party, time and again, if it did not "like" the adjudicator nominated, to withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does "like". Clearly that would involve what would be perceived by many as an abuse of the contractual and statutory process. There are some relatively minor constraints on such a party, such as the extra costs and the nomination fee usually charged by the various institutions. There is a respectable argument, albeit not deployed in this case, that one can only refer a given dispute once to adjudication, provided that there is no valid ground for challenging either the adjudicator's impartiality or jurisdiction or that, on some valid ground or another, the decision produced by the adjudicator on the dispute is not enforceable. It would be wrong to express any concluded view on this because I have not heard detailed argument on it. However, the answer to that argument may well provide a way in which the lacuna could be unravelled. I therefore do not rule out the possibility that an argument could be deployed to the effect that the Court could by injunction restrain a party, albeit with appropriate safeguards, from pursuing the same relief for the same dispute, time and again, in adjudication."
- Lanes sought permission to appeal and said in particular that the argument based on abuse of process raised an important issue and has a realistic prospect of success. Akenhead J refused permission. He noted in his written reasons that this argument had never been articulated by Lanes' counsel and that on about 3 occasions, he had expressly asked counsel whether she had any argument other than the one based on repudiation and on each occasion she expressly said "no".
- In the light of the refusal of the injunction, the adjudication before Mr Atkinson continued until he gave his decision on 17 May 2011. I shall say more about the course of that adjudication when I consider the question of apparent bias, below.
No entitlement to start again
- Lanes' first argument is that on a proper construction of the provisions of the Procedure, and by implication, once Lanes had given notice of adjudication in relation to this particular dispute and obtained the appointment of an adjudicator, as it had with Mr Klein, it was not open to it thereafter to start again before another adjudicator, where the first adjudication ceased upon its failure to serve the referral. The primary version of this argument is that there is an absolute bar against a second commencement. The alternative version is that there is a qualified bar, but GTI would still fall foul of it on the facts of this case.
- Lanes rightly puts its case on the basis of necessary implication because there is nothing in the Procedure which expressly debars a party from starting an adjudication more than once where there was no decision.
- In fact such provisions as do deal with successive adjudications militate against any such implication. Paragraph 6.7 states that "No issue decided by an adjudicator may subsequently be laid before another adjudicator unless so agreed by the parties." Although the Scheme does not govern here, because clause 18B of the Sub-Contract was compliant with s108 (5) of the Housing Grants, Regeneration and Construction Act 1996 ("the Act"), it is to be noted that paragraph 9 (2) thereof is to similar effect:
"An adjudicator must resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication, and a decision has been taken in that adjudication."
- This is a strong pointer against Lanes' argument because if it had been intended to restrict a party which had commenced an adjudication but without a decision resulting, it could have said so. Lanes argues that this does not render an implied bar impossible. I agree, but it makes it much more unlikely. Here Mr Wilmot-Smith for Lanes says that paragraph 12 (a) of the Scheme is an example of where something has to be implied. It states that the adjudicator must act impartially but does not state the (obvious) consequence that if he does not, his decision will be a nullity. I agree but the addition of that obvious consequence is far less of an implication than the bar contended for by Lanes.
- Mr Wilmot-Smith also prayed in aid paragraph 10 of the Scheme which provides that if a party objects to the appointment of a particular person that will not invalidate the appointment nor any decision reached. I see that, but while this might limit the options of the non-referring party I do not see that it means that the bar against recommencement should be implied.
- In addition, until and unless a referral is made to and received by the adjudicator, he has no jurisdiction in relation to the adjudication at all. Paragraph 4.2 of the Procedure emphasises this because the date of the referral is when the adjudicator receives the statement of case. And paragraph 5.1 sets the time for the decision as 28 days from the referral. I did not understand Mr Wilmot-Smith, for Lanes, to disagree with that proposition or indeed, that as GTI never served a referral, the putative adjudication before Mr Klein was a nullity. But there is nothing in the Procedure (or the Scheme) to suggest that any subsequent adjudicator would have no jurisdiction either. If what has gone before is a nullity, logic suggests that it is irrelevant to any future adjudication.
- Moreover, such case-law as there is at first instance which touches upon the subject suggests that one can start again after a failure to make the referral first time round. In Hart Investments v Fidler 3 November 2006, HHJ Coulson QC (as he then was) held that a failure to provide the written referral to the appointed adjudicator within 7 days of the date of the notice of adjudication was fatal to that adjudication. This was so even if the referral was one day late. He said this:
"51...The referral notice must be provided by a date which is not later than seven days after the notification of the notice of intention to refer. If it is not, it cannot be a referral notice in accordance with the Scheme. In that event, of course, the responding party may consent, expressly or by implication, to waive the irregularity. There was no such waiver here. If the responding party does not waive the irregularity the referring party must start again, which is precisely the same course of action envisaged in Ritchie. Larchpark had that choice to make. They decided not to start again, and it seems to me that they are, therefore, obliged to accept the consequences of that decision.
52. At one point Mr. Quiney, with customary acuity, suggested that the adjudicator could extend without consent the seven day time limit as part of his general powers under para.13 of the scheme. That was a typically ingenious argument, but I do not believe that it can be right. Everything done pursuant to the Scheme, including the 28 day period for the adjudication itself, flows from the date of the referral notice. The adjudicator is not seized of the adjudication until the referral notice is provided and the 28 day period starts to run. He therefore has no power until he gets the referral notice; thus he has no power to extend the seven day period which occurs before his jurisdiction begins..."
- What the Judge clearly envisaged there was that it was open to the relevant party to start again. I do not accept that this was obiter. It seems to me to be a finding which is an integral part of the analysis of the effect of a late referral. If it had been thought that such late service was fatal not only to that adjudication but any subsequent one where the referral was not late, this would surely have featured in the Judge's reasoning. But if this observation was obiter I nonetheless agree with it.
- The decision of Christopher Clarke J in Vision Homes v Lancsville Construction [2009] EWHC 2042 is also supportive of this view. One aspect of that case was that both parties had started competing adjudications on the same issue. As to that he stated as follows:
"70 Vision also submitted that there could not be two adjudications on the same dispute at once. Unhappily, as it seems to me, there can be. Paragraph 9 (2) of the Scheme provides:
"An adjudicator must resign where the dispute is the same or substantially the same as one which has previously been referred to adjudication and a decision has been taken in that adjudication."
The Scheme makes no provision for the resignation of an adjudicator where the dispute that he is to decide has previously been referred to adjudication but no decision has been taken in that adjudication.
71 In those circumstances I decline to hold that Mr Bingham's decision was made without jurisdiction on grounds other than the timing point."
- Again, I do not see those paragraphs as being obiter but even if they were, they are correct in my view.
- I was also referred to the decision of Jackson J (as he then was) in Midland Expressway v Carillion [2006] BLR 325. This was whether a party to an adjudication could withdraw the claim which had been inadequately formulated and which could not succeed as it presently stood. He held that it could. I accept that this is not the same situation as appears before me and that the reformulated claim which was intended would be pursued at some point in the future, was not necessarily the same claim that was now being withdrawn. Nonetheless, it is instructive to note that one factor taken into account by Jackson J was that there was nothing in the Act or the Scheme to suggest that the restriction argued for there was intended, just as there are no express provisions suggesting the restriction argued before me. See paragraph 101 (i) of his judgment.
- Indeed I think it fair to regard the Scheme and any other set of adjudication rules designed to achieve in substance the same effect (including the Procedure) as being a complete code. There would therefore need to be a very powerful reason for adding to it by implication. At one stage in his argument Mr Wilmot-Smith also relied upon the Scheme as a code because he said that it followed that the right to refer a particular dispute to adjudication necessarily entailed that any defect in that adjudication process, like failing to serve a referral, must mean that the right is exhausted. But that simply does not follow in my judgment. If correct, it would have as its consequence the absolute form of the bar. So erroneous failures and presumably adjudications which were subsequently found to be nullities would be included as well. If a subsequently-found nullity (for example due to lack of jurisdiction) does not lead to a bar, and Mr Wilmot-Smith accepted that it did not, one again has to ask why an immediate nullity due to failure to make a referral does.
- In its absolute form, the bar on starting again contended for would also have surprising and unwanted effects. If a party served the referral late, inadvertently, or because of some supervening event like illness on the part of the draftsman, it would seem very harsh that not only was that particular adjudication a nullity but the right to adjudicate that dispute was thereby lost forever. That is especially so given that the primary right is to give notice of adjudication "at any time" – see paragraph 2.1 of the Procedure. Or the referral may not be proceeded with at the last moment because of some development which means that the issue is not now ready to be adjudicated. I accept, as Mr Wilmot-Smith says, that the Scheme clearly contemplates that the referring party will have all the paperwork in order before even sending the initial notice but this does not mean that events cannot occur which disrupt or interfere with the intended start of the adjudication. Moreover an absolute bar would by definition be insensitive to the motive behind the failure to pursue the adjudication and the blameworthiness or otherwise of the relevant party.
- Finally, the core reasoning behind the suggested bar is that it is necessary, and must have been impliedly intended by the framers of the Act and the Scheme, to prevent adjudicator-"forum-shopping". The scenario postulated is that of the serial giver of adjudication notices who keeps seeking appointments but then not serving a referral until the adjudicator appointed is to his liking. On any view, an absolute bar would not be necessary to achieve that aim. A qualified bar, attuned in some way to that postulated vice is all that would be required. Accordingly I turn to this alternative way of putting Lanes' argument.
- The starting point is Mr Wilmot-Smith's contention that the scenario of forum-shopping set out in the preceding paragraph is so repugnant to the whole scheme of adjudication that one has to read into the Procedure and the Scheme a bar against it. But there are several serious problems with this.
- First one has to question the extent to which such forum shopping is a real problem. The scheme of construction adjudication has been under way for over 10 years now and it would not appear that there have been many serious incidents of forum shopping – if there had been, surely one or more would have been litigated by the frustrated other party. And every time the referring party starts again it will have to pay another appointment fee, even if only £250 or £350. Moreover, if one party fails to proceed with one particular adjudicator, there would in fact be nothing to stop the other party from making his own adjudication referral. If that party wants to avoid delay and get on with the adjudication, that would be the way forward. It may be that the reason why the issue of forum shopping has not come to the fore is because in most cases, either party can head off problems at the appointment stage by notifying the appointment body of any particular concerns about potential adjudicators or, where one adjudicator is put forward by the referring party to the appointing body (as Mr Dixon was here) the other party can swiftly say why it would object – as Lanes did, successfully, here.
- Second, and very importantly, where does one draw the line when setting the boundaries of the qualified bar? Mr Wilmot-Smith submitted that this did not matter because here, GTI deliberately refused to serve the referral upon Mr Klein. But that does not answer the point about the scope of the bar which has to be established and justified before the case for its implication is established. If the test was deliberate non-referral, for example, does that rule in or out the negligently late referral or the intentional abandonment of the referral because of illness? And under that test, the Court may well need to investigate the motive of the non-serving party. Again, it is no answer to say that the motive here was clear. And if the vice is the prospect of serial requests for appointments, how many chances does the relevant party have? Should it be given at least one further opportunity to appoint?
- These questions are highly pertinent to this case. If one disregards GTI's first suggestion to the ICE of Mr Dixon (because his previous decision had not been to the satisfaction of Lanes) the first actually appointed adjudicator was Mr Klein. GTI did not proceed here because of perceived apparent bias. Objectively speaking that perception was wrong, as Akenhead J subsequently found. See paragraph 18 above. But he also found that GTI had been acting in good faith and honestly thought there was a problem. One is entitled to question in such a case whether it could be fair or proportionate to disable GTI thereafter from starting again.
- So there are, in my judgment very real difficulties in formulating any qualified bar.
- Finally, there is in fact no prejudice if a party were able to start again after failing to serve a referral. At that stage the adjudicator has incurred no cost other than his time in agreeing his appointment, nor has the other party. And when an appointed adjudicator is given the referral the appointment of that particular adjudicator cannot be said of itself to be prejudicial. But if, as in the case of any appointment, the other party considers that there is already bias, it can object at the outset and ask the Court to decide the matter, or object and argue on enforcement that the adjudication is thereby a nullity. Possibly, there would be more of a case for a bar where the actual referral is made to the adjudicator so that he is seized of the matter, and then the referring party somehow withdraws. But that is not this case. The logic for imposing a bar even at the prior stage of appointment of the adjudicator is, according to Lanes, that at this point the obligation to serve the referral within the mandatory period arises. So that failure to serve is inevitably a breach of the implied adjudication contract between the parties. But I do not see why the fact of such breach should make the case for the bar. The point is that the adjudication has become a nullity.
- I accept of course that in paragraph 32 of his judgment in the earlier case (see paragraph 18 above) Akenhead J was attracted to the argument for some sort of bar on the basis that it filled a lacuna. But he expressed no concluded view nor did he have the benefit of the very detailed argument addressed to me.
- For all those reasons, I reject the implication of the bar against starting again, whether in absolute or qualified form. In reaching that conclusion I have not taken into account (because there is no need) the possibility that the forum-shopper might in any event be prevented from doing so by an injunction granted to stop him breaking the implied contract between the parties by not serving the referral notice. I can see that this might not be entirely straightforward.
Abuse of Process
- GTI contends that it would be an abuse for Lanes to be able to mount the argument that GTI was not entitled to start again ("the No Start Again Argument") because that argument could and should have been raised before Akenhead J on the injunction application. Since I have considered and dismissed that argument on the merits, above, the abuse of process argument does not strictly arise. But lest I be wrong on the merits and in deference to the submissions made to me on abuse of process, I now deal with it briefly.
- Unlike most applications to strike out for abuse of process, this one is being considered when the result of the underlying claim is known. And there is only any point to my dealing with it if I assume, as already stated, that the No Start Again Argument was in fact correct.
- This is not a case of res judicata or issue estoppel because the No Start Again Argument was not advanced or decided at the earlier hearing. The claim is correctly characterised as abuse of process. In this regard the leading authority is Johnson v Gore Wood [2002] 2 AC 1. After reviewing the authorities Lord Bingham put the matter thus at p31A-D:
"But Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."
- And at pp59-60, Lord Millett expressed it in this way:
"However this may be, the difference to which I have drawn attention is of critical importance. It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by Article 6... While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the Court from abuse and the defendant from oppression. In Brisbane City Council v. A.-G. for Queensland [1979] AC 411 at p. 425 Lord Wilberforce.. explained that the true basis of the rule in Henderson v Henderson is abuse of process and observed that it ". . . ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation.
There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr. Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the Company's action. This question must be determined as at the time when Mr. Johnson brought the present proceedings and in the light of everything that had then happened. There is, of course, no doubt that Mr. Johnson could have brought his action as part of or at the same time as the Company's action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court. As May L.J. observed in Manson v Vooght at p. 387, it may in a particular case be sensible to advance claims separately. Insofar as the so-called rule in Henderson v. Henderson suggests that there is a presumption against the bringing of successive actions, I consider that it is a distortion of the true position. The burden should always rest upon the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action."
- The injunction proceedings before Akenhead J in this case were such that if he found in favour of Lanes's arguments, that would have put an end to the adjudication then being conducted by Mr Atkinson. This was by then underway but there were further submissions which came after judgment on the injunction and the decision itself was not rendered until 17 May. It is not disputed that if Lanes had obtained the injunction both sides and Mr Atkinson, would have saved time and costs. It is not suggested that the No Start Again Argument could not have been run before Akenhead J. Indeed his observations at paragraph 32 of his judgment encapsulated what it was. And he had expressly asked counsel on more than one occasion whether she had any argument other than the one based on repudiation, as noted above.
- There is no specific evidence before me as to why the No Start Again Argument was not run at that stage. Mr Wilmot-Smith says that it is not necessary to provide such information where it is clear that the argument was not being deliberately postponed until a later stage in order to gain a tactical advantage. I accept that no tactical advantage was being sought here, although that is not a reason for not assisting the Court with an explanation. However, in the absence of an explanation, Mr Wilmot Smith invited me to proceed on the basis that there had simply been a forensic error, which I do.
- Mr Stansfield argues that there are two respects in which GTI has been prejudiced by the failure to run the argument earlier. First, if it had been, it might have gone into the question of apparent bias more deeply or strongly so as to persuade the Court that there was indeed apparent bias. Then Mr Klein would have had no jurisdiction anyway, so that starting again with Mr Atkinson was in any event proper. But the truth is that GTI had to deal with the question of bias in any event, it was within a narrow compass, and Akenhead J gave his views about it. So I do not see that the outcome would be likely to have changed just because GTI was facing a different argument about starting again but to the same effect.
- Second, Mr Stansfield says that there are costs wasted from the adjudication before Mr Atkinson which would not have been wasted had it been stopped because of a successful No Start Again Argument. I see the force of that. Mr Wilmot-Smith says that such wasted costs could be dealt with by the Court now in that it could require Lanes to pay GTI its wasted costs of the adjudication as a condition for not awarding summary judgment against it. But I do not think that my powers would extend that far.
- However, Mr Wilmot-Smith also argued that if the abuse of process argument succeeded, then there would be a disproportionate result because it would mean that (assuming I was wrong on the No Start Again Argument) Lanes would have to pay GTI some £1.4m when in truth the decision was unenforceable. On this analysis Lanes would be deprived of a defence which was bound to succeed. It is true that the enforcement of the decision by an order that Lanes pay GTI is only temporary and that there is an arbitration now in prospect. But nonetheless this is a very substantial sum to pay out.
- One also needs to bear in mind here the nature and extent of the No Start Again Argument which GTI says cannot now be made because it is an abuse. It is in fact a legal point which was made in the course of a one day hearing before me which (perhaps fortunately for Lanes) would have to have taken place anyway because of the separate challenge to the award alleging apparent bias, dealt with below. It is a far cry from a new action involving statements of case, disclosure and the other usual interlocutory steps leading to a trial.
- At the end of the day, as Lord Bingham made clear in Johnson, any decision on this form of abuse of process involves a "broad, merits-based judgment" and is necessarily fact-sensitive. Weighing up all the factors set out above, I am not persuaded that there was an abuse of process here.
Apparent Bias
Introduction
- This claim could only have been made after the adjudication, because it depends on what happened during it. Although various points were made in correspondence (and in these proceedings) about the conduct of the adjudicator, the only claim now made by Lanes is that which relates to apparent bias in connection with a document issued by Mr Atkinson on 14 April 2011 entitled "Preliminary Views and Findings of Fact" ("the Preliminary Views Document"). Mr Atkinson's actual decision was made on 17 May ("the Decision"). But Lanes alleges that the Preliminary Views Document looks and reads like a decision and suggests that Mr Atkinson had already made up his mind. It is indeed the case that the Decision followed the "findings" on liability made in the Preliminary Views Document, and, as will be shown below, reproduced much of its language and content.
- Lanes therefore submits here that "a fair-minded and informed observer, having considered all the circumstances which have a bearing on the suggestion that the decision-maker was biased, would conclude that there was a real possibility that he was biased." See paragraph 16 of the judgment of Dyson LJ (as he then was) in Amec Capital Projects Limited v Whitefriars City Estates Limited [2004] EWCA Civ 1418, quoting from the case of Porter v Magill [2002] 2 AC 357 at para 103.
The Facts
- The essence of GTI's claim against Lanes, which was to be the subject of the adjudication was as follows. GTI contended that by a letter sent on 28 April it had lawfully terminated its Sub-Contract with Lanes under clause 17 (1) thereof because Lanes had (a) failed to proceed with the re-roofing works with due diligence and (b) refused, when required, to remove defective materials and make good defective work. Further or alternatively, by such letter GTI had accepted a repudiatory breach constituted by the defaults set out in (a) and (b) above. GTI claimed sums payable under Clause 17 (2) and/or damages in the sum of £2.7m. This was made up of the additional cost to GTI of completing the works following Lanes's departure, giving credit for the price payable under the Sub-Contract, but also including the difference between the actual value of the work done by Lanes and the price paid to it thus far by GTI.
- On 27 March 2011, Mr Atkinson received GTI's referral. As matters stood, this meant that Lanes' Response was due on 7 April. It could only be extended with the agreement of GTI and Mr Atkinson. See paragraph 5.4 of the Procedure set out in paragraph 5 above. Pursuant to paragraph 5.1, GTI extended the date for the decision 14 days which took it to 7 May 2011. Any further extension would require the consent of both parties.
- Initially, Lanes' solicitors said that it was not in a position to file any Response. This was in the context of a complaint that there should be a "standstill" of the adjudication pending the outcome of the injunction application before Akenhead J which was by then under way and awaiting a further hearing. But that changed with an e-mail from Bunton dated 11 April. This stated that further time was needed to consider the Referral which had raised a number of new matters, and that subject to jurisdictional issues, Lanes would "of course" be submitting a Response. Later that day Mr Atkinson wrote to the parties. He said that the time for submitting a Response had passed and he was entitled to make a decision in the absence of it or further information from Lanes. He said that unless there was clear agreement for an extension of time for making the decision he would make it within the existing timeframe ie by 7 May. He noted that Lanes said that it would be serving a Response. He directed Lanes to agree (a) that they extend the time for submission of the Response until 20 April (b) agree to extend the decision date to 20 May and (c) suspend the adjudicator's investigation of the matter until 20 April. Various other matters were also dealt with.
- By an e-mail later that day Mr Bunton agreed to extend the decision day to 20 May and that investigations be suspended until 20 April. He also agreed to have until 20 April for the Response but if Appendix 5 of the referral (a document containing what Lanes said were many new allegations and which should not be admitted) was to be admitted, they would need until 22 April. Witness statements would also be adduced. By a letter dated 12 April McGrigors (for GTI) said that they would agree an extension for the Response only until 17 April, that GTI would have the right to reply to the Response by 29 April and that the decision date be extended to 14 May. They did not agree any standstill.
- In his letter 012 dated 13 April, Mr Atkinson noted the parties' positions and said that he wished to fix a timetable. Given that both parties had to agree to this he suggested the following: Response by 20 April, Reply by 28 April, date for a meeting – 6 May and date for the decision (already agreed by Lanes) – 20 May. He asked for both parties to agree to this "by return". He added that it was likely that he could not consider any submissions made within 7 days of the decision date unless he had specifically directed them. He also ruled that Appendix 5 was admissible and Lanes would have to deal with it.
- Also on 13 April Mr Atkinson sent letter 013. This said that he had not yet made his decision but on the basis that it may be necessary to examine quantum (ie should GTI succeed on liability) it should produce a Scott Schedule.
- Neither side came back to Mr Atkinson that day. But on 14 April at 8.22am Mr Bunton responded to letter 012. He said that, given the inclusion of Appendix 5, it would be impossible for Lanes to provide a Response by 20 April and that at best it could be done by 22nd. He said that he had already indicated this to Mr Atkinson. He assumed Mr Atkinson was agreeable but he should confirm. He complained that the duration of the proposed meeting was far too short given the issues. He also adverted to letter 013 and said that the call for quantum documents suggested that Mr Atkinson had made his mind up on liability.
- By an e-mail dated 10.01am on 14 April McGrigors said that it agreed the timetable proposed in letter 012. Accordingly the only question on the Response was whether it should be served by 20 April (as Mr Atkinson proposed and GTI agreed) or whether "at best" it should be served by 22 April.
- But also on 14 April, Mr Atkinson sent to the parties the Preliminary Views Document, under cover of letter 014. It was sent early that morning because McGrigors' e-mail of 10.01am acknowledged receipt of it.
- It is now refer in some detail to the Preliminary Views Document. I set out extracts below but it is in fact necessary to look at the entire document. The letter enclosing it is headed as follows:
"PRELIMINARY VIEWS AND FINDINGS OF FACT
The date for the Response specified in the ICE Adjudication Procedure has passed and Lanes made no submission at all on the substantive issues. There has been no agreement to a revised timetable and indeed no response at all to my suggested timetable yesterday.
Accordingly, in order to assist me in my examination of the issues referred to me, in my ascertainment of the facts and the law and in order to allow the Parties the opportunity to make further submissions on the issues I enclose Preliminary Views and Findings of Fact on some of the initial issues in the Referral.
The Preliminary Views and Findings of Fact are a step in making my Decision and I am not bound by them nor do I commit myself to communicate nor issue amendments or further Preliminary Views and Findings of Fact.
I direct the parties to make any comments or submissions on the Preliminary Views and Findings of Fact by 17:00 hrs on 21st April 2011. I direct the Parties to refer to or submit evidence, arguments, authorities etc that they consider relevant."
- It is true that Lanes had made no submissions at all by that stage. But it had indicated that it was going to. As to whether there had been a response by the parties to the suggested timetable, that would appear to be correct as at the time this document was sent. But both parties did make their response later that day.
- One then turns to the body of the document. It is headed up as if were a judgment or an award:
"IN THE MATER OF AN ADJUDICATION..
BETWEEN..." then setting out the parties and then
"PRELIMINARY VIEWS AND FINDINGS OF FACT".
And then:
"NOTICE
The statements "I find", "I find and hold" and "Decision" and other similar statements are not and not intended to be decisions of the adjudicator but preliminary views and findings of fact preparatory to the decision.
The preliminary views and findings of fact are a step in making the decision and I am not bound by them.
I do not commit myself to communicate nor issue amendments or further Preliminary Views and Findings of Fact."
- A Contents Page follows. There then follows a narrative which is in the form one would expect in a formal written judgment with section headings and paragraph number. The first section is headed "WHEREAS" and then "THE PARTIES AND REPRESENTATIVES" and the next sections deal with the Project, the Sub-Contract Documents, the Main Contract, Appointment, the Adjudication Procedure, and Previously Decided Adjudication. He then deals with The Dispute, Objections to Jurisdiction and the Progress of the Adjudication. Paragraph 50 in that section said "The Parties did not respond to my suggestions." As noted above, this was strictly true but had Mr Atkinson waited a little longer on 14th he would have had the response. The section ended:
"I have considered the submissions, allegations and evidence of the witnesses and having so considered
I DO HEREBY MAKE MY DECISION."
- He then deals with GTI's claim and then the Submissions and Evidence. This refers to GTI's Referral and its two witness statements. Paragraph 58 states that "Lanes did not submit a Response either in accordance with the ICE Adjudication Procedure or otherwise." I have to observe that this looks very much like a final decision which an adjudicator has decided to take, where one side has simply not engaged in the process. That was not actually the position here. He then sets out a list of 12 issues, the last 7 of which deal with quantum. Sections dealing with the Works and the Sub-Contract programme then follow.
- At paragraph 65 begins a section headed "Defective Work". In it, as with other later sections, Mr Atkinson says that Lanes made "no submissions in this adjudication on the matter of" the defective works which is obviously true since it had not yet served its Response. Mr Atkinson accepted the evidence of GTI's witnesses and in this section found that Lanes work on the preparation steelwork and application of coatings was defective and that a letter from GTI dated 2 April was a requirement under clause 17 (1) (d) of the Contract to remove defective work and make it good. He then found that Lanes refused or neglected to do so. However he held that GTI's letter of 28 April did not amount to a termination on that ground because it referred not to it but to Lanes's refusal to work with due diligence. In the next section, from pages 24 to 27, he set out what "due diligence" meant. Between pages 27 and 32 he deals with Lanes's performance. He found that GTI's letter dated 21 April was a notice to Lanes to proceed with due diligence and that Lanes did not do so between then and 28 April, accepting the facts alleged by GTI set out in considerable detail. Then, under the section "Contractual termination" he held that on 28 April GTI had validly determined Lanes' employment under Clause 17 (1) on the basis of lack of due diligence. He finally held in the section Repudiation and Acceptance that Lanes was in repudiatory breach by reason both of its failure to progress with due diligence and its refusal to remove and make good the defective works, and that this repudiation had been accepted by GTI.
- Although he had referred earlier to 12 issues Mr Atkinson did not in fact deal with the quantum issues, for the obvious reason that he had not yet received GTI's Scott Schedule requested the previous day.
- This document consisted of 35 pages in all. On the face of it, and subject to the opening words of qualification (with which I deal below) it reads like a judgment and one that must have taken some days to prepare. It was obviously intended to be a judgment at some point because of the preamble, background facts, recital of adjudication and so on, along with the list of issues which as a list was complete. Given that on its face it looked like a draft judgment, and one made before any Response from the other party, it does indeed appear as if the author has made up his mind.
- There are of course the words of qualification. But I do not think that they remove the overriding impression of a decision already made. If this were a simple discussion document, or some indication of provisional view, it would be very odd to use language in it like "I find" "I find and hold" "Decision" etc. Indeed one has to question how such language can really then be understood to be provisional. Further, although the Preliminary Views Document is said to be a "step in making the decision" or "preparatory to the decision" (themselves somewhat curious ways to put it) and that Mr Atkinson was not bound by them, the impression given is of a draft judgment which has then had these qualifications added. Whether it in fact started off life as the first draft of Mr Atkinson's decision before he decided to release it as a preliminary views paper does not matter. It is the impression which counts.
- There are other unsatisfactory features:
(1) Given that the last communication was about timetables, it is odd that the Preliminary Views Document should then be released with no advance notice; the release of provisional views is not common in adjudications but if this occurs one imagines that there will have been discussion between the parties first – I consider this matter further below;
(2) GTI says that in fact, given that there was no actual agreement as to the time for the Response at that point, Mr Atkinson could have made his decision there and then. But I do not see that this helps where he has not purported to do that;
(3) The references to the absence of submissions from Lanes is unfair in the sense that whatever it had said originally, it was now engaged in the process and the issue was whether it should have a further two days (or possibly a little further leeway) on a Response which it was undoubtedly intending to serve to include witness evidence. The impression created by the document is that Lanes was not just not going to participate and so the adjudicator had to decide on the materials before him;
(4) Given that there was no Response it is odd to have a provisional views document at all. If such are ever appropriate it is surely when both sides have had their say. Mr Atkinson said in the first page of his letter that the document was sent to assist him in his examination of the issues referred to him and in order to allow the parties to make further submissions. What seems to be implicit in this is that this was the only way in which he could have submissions from Lanes. But even if this were right, it does not in my view cure the document of the impression of pre-judgment. In his letter of 29 April, Mr Atkinson responded to Lanes' allegations of apparent bias, made following its receipt of the Preliminary Views Document. He declined to resign. He said that at the time it was sent, there appeared to be no prospect of an agreement as to an extended timetable. But he had not given the parties much time since his letter of the previous day and in any event Lanes had already agreed 20 May for the decision and GTI, 14 May. Later on 14th, GTI agreed 20 May, too. And if Mr Atkinson felt that there needed to be some document from him which would then give him jurisdiction to require a response from Lanes, it surely could have been framed in a different way. But the critical point in my view is not what Mr Atkinson intended, but how the Preliminary Views Document would appear to a fair-minded observer. Equally, while I can see from the documents that Lanes's failure to serve a Response on time and the numerous other points and objections it was taking must have been very frustrating for Mr Atkinson, they do not really assist on how the Preliminary Views Document appeared.
- It is worth recording that ultimately there was a substantial Response from Lanes, mainly on 20 April when both sides finally agreed that day for service, GTI served a Reply on 29 April and Lanes served a Rejoinder on 12 May. The Decision itself dated 17 May and amended on 20 May, consisting of 164 pages, contained findings to the same effect, and often in the same language, as those in the Preliminary Views Document so far as liability was concerned but it did also deal with the submissions made by Lanes. In one sense it was more favourable to GTI because Mr Atkinson held that the letter of 28 April did count as a contractual termination in respect not only of the failure to use due diligence but also the refusal to remove and make good the defective work. In terms of the similarity of language used particularly the same findings and holdings, see the comparative schedule at p1041-1044. Although the test of apparent bias relates to the perception of the fair-minded observer it should be recorded that following the production of the Preliminary Views Document, Lanes and its advisers thought that there had been apparent bias as they asserted in correspondence. They immediately challenged the document in Bunton's e-mail of 15 April. Making appropriate reservations they nonetheless continued with the adjudication.
- Mr Stansfield has referred me to Amec. There, an adjudicator, Mr Biscoe, made a decision in an adjudication which later was held to be a nullity. Subsequently a new adjudicator was appointed but after his death Mr Biscoe found himself appointed once more. He again had submissions but decided the same way as he had originally. It was alleged that there was apparent bias on what were in fact two narrow bases; first because his first decision was made without jurisdiction and second because legal advice about the defence to the claim which he had obtained for the first decision was carried forward into the second. The first argument, concerning jurisdiction was rejected by Dyson LJ as misconceived. As to the second, the legal advice was in fact not relevant to the issues in the second case and so this argument failed also. In paragraphs 20-22 of his judgment Dyson LJ said this:
"In my judgment, the mere fact that the tribunal has previously decided the issue is not of itself sufficient to justify a conclusion of apparent bias. Something more is required. Judges are assumed to be trustworthy and to understand that they should approach every case with an open mind. The same applies to adjudicators, who are almost always professional persons. That is not to say that, if it is asked to redetermine an issue and the evidence and arguments are merely a repeat of what went before, the tribunal will not be likely to reach the same conclusion as before. It would be unrealistic, indeed absurd, to expect the tribunal in such circumstances to ignore its earlier decision and not to be inclined to come to the same conclusion as before, particularly if the previous decision was carefully reasoned. The vice which the law must guard against is that the tribunal may approach the rehearing with a closed mind. If a judge has considered an issue carefully before reaching a decision on the first occasion, it cannot sensibly be said that he has a closed mind if, the evidence and arguments being the same as before, he does not give as careful a consideration on the second occasion as on the first. He will, however, be expected to give such reconsideration of the matter as is reasonably necessary for him to be satisfied that his first decision was correct. As I have said, it will be a most unusual case where the second hearing is for practical purposes an exact rerun of the first.
21. The mere fact that the tribunal has decided the issue before is therefore not enough for apparent bias. There needs to be something of substance to lead the fair-minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind and objective judgment to bear....
22. It is easy enough to make challenges of breach of natural justice against an adjudicator. The purpose of the scheme of the 1996 Act is now well known. It is to provide a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement. The intention of Parliament to achieve this purpose will be undermined if allegations of breach of natural justice are not examined critically when they are raised by parties who are seeking to avoid complying with adjudicators' decisions. It is only where the defendant has advanced a properly arguable objection based on apparent bias that he should be permitted to resist summary enforcement of the adjudicator's award on that ground."
- I do not see this case as analogous to Amec. There, the adjudicator had made a considered, final decision on an earlier adjudication. As Dyson LJ points out, if the second adjudication was a simple re-run of the first it would be hardly surprising if the adjudicator found the same way. But the position here is that the adjudicator had only heard from one side and presented a document, where there was in truth no need to present one at all, which had the unsatisfactory features referred to above.
- In all the circumstances referred to above, and having examined Lanes's argument here critically, as I must, I conclude that the apparent bias argument is made out.
- I would only add this: in the normal run of an adjudication I would not have thought that documents expressing provisional views on which parties were then invited to comment were likely to be helpful or appropriate. They may be, where the parties expressly ask the adjudicator to do just that although it is not clear that this will always assist in a process which is meant to be concluded in a narrow time frame and confined in scope. Of course, where the adjudicator considers that there might be another basis for one or other party's claim, which had not been addressed by either, it is obviously incumbent upon him to put this to the parties for their comment. See the discussion in Coulson on Construction Adjudication at 13.41-13.47. But that is an entirely different situation.
Conclusion
- In the event I would not have dismissed the application for summary judgment to enforce the Decision or granted declaratory relief on the basis that GTI could not start again. But I do take this course because of the apparent bias of Mr Atkinson. I am most grateful to Counsel for their most helpful and comprehensive written and oral submissions.
