Adjudication
Woods Hardwick Ltd v Chiltern Air Conditioning (2000)

© Daniel Atkinson 2001     13 January 2001

Woods Hardwick Ltd v Chiltern Air Conditioning (2000) TCC is an important case in the development of the law governing the standards of conduct to be adopted by adjudicator’s. 

Woods Hardwick was an architect and engineer trading as a limited company.  Chiltern was an air-conditioning specialist also undertaking developments and main contract work.  The informal written contract required Woods Hardwick to provide architectural services in connection with a development in Luton, comprising extensive refurbishment and extension to an original building.  Woods Hardwick claimed payment of fees of £18,774.70 in unpaid invoices and additional fees for the increased value of the works. 

The usual issues of notice of withholding and abatement of price arose.  His Honour Judge Thornton QC stated that "Any abatement, properly relied on by Chiltern, would not of course be caught by Section 111 of the HGCRA, so Chiltern's abatement defence could,in principal, defeat or reduce Wood Hardwick's claims".

In reaching his decision, the adjudicator held two site meetings at which personnel from Wood Hardwick and Chiltern were present, received documents from both parties and carried out investigatory interviews with personnel from Wood Hardwick, with two relevant subcontractors, with the solicitors' department of Luton Council, who were the relevant planning authority, and with the solicitor manning the RIBA Legal Helpline. These sources of information led the adjudicator to conclude that the problems on site had been caused by setting out errors caused by Chiltern's personnel and by Chilterns shambolic running of the site. His reasoned decision set out a summary of the evidence he had obtained from his interviews conducted with Chiltern, the two subcontractors and the Legal Helpline. He also summarised the observations that he had made during his site visits as to the erroneous setting out of steel stanchions, pre-cast concrete planks and the new extension relative to the kerb in the highway.

Chiltern complained that the adjudication procedure was flawed.  Chiltern complained that the contents of the adjudicator's witness statement obtained by Woods Hardwick, and the fact that the adjudicator provided one at all to assist Woods Hardwick, were evidence of the unfairness of both the adjudication procedure and the adjudicator.

Chiltern complained that the adjudicator lacked impartiality and conducted the adjudication in breach of the rules of natural justice in preventing Chiltern fairly presenting its case, took evidence which he failed subsequently to afford Chiltern the opportunity of commenting upon and provided a witness statement which contained partisan views adverse to Chiltern.

The adjudicator had particular difficulties as a result of Chiltern's hostile attitude to the adjudication.

It was found that the adjudicator had begun to form his adverse view about the two representatives of Chiltern during the early stages of the adjudication process.  It was held that if his views were adverse to Chiltern from an early stage, the adjudicator had to ensure that the procedure adopted allowed Chiltern a fair opportunity to make its case and seek to present its point of view in relation to such views as the adjudicator had provisionally firmed in the early stages.

Following a meeting, the adjudicator obtained much additional material from interviews conducted from third parties he consulted and from Wood Hardwick's representatives.  Despite obtaining the additional information, the adjudicator did not inform Chiltern either that he had obtained it or its content.

The additional information that was obtained by the adjudicator was highly material to the key issues he had to determine, and on these issues assisted by the additional information, the adjudicator made findings adverse to Chiltern.

The Scheme applied and in particular paragraph 17 which required the adjudicator to consider any relevant information submitted to him by any of the parties to the dispute and to make available to them any information to be taken into account in reaching his decision.

It was held that the Adjudicator was in clear breach of the statutory requirements.

It was held that there was no rule preventing an adjudicator giving evidence in a witness statement at the request of, and in support of, one party's case against the other in subsequent enforcement proceedings.

The adjudicator should scrupulously ensure that his evidence was confined to a neutral factual account of what transpired in the adjudication.  In this case the adjudicator exceeded the requirement of neutrality.  He showed that he had taken strongly against Chiltern at an early stage in the process.  secondly he sought to argue the case of Woods Hardwick in his witness statement.

Judge Thornton decided he did not need to decide what effect a failure to comply with the basic principles of natural justice would have on the enforcement of an adjudicator's award, in view of the failure to afford Chiltern the opportunity to consider and comment on the additional information obtained by the adjudicator.

It was held that the adjudication was conducted in breach of the provisions of the Scheme.  The adjudicator failed to make available additional information and obtained legal advice without notifying the parties of his intention of taking advice.  He also submitted a witness statement in terms which left Chiltern with the impression, which objectively it could reasonably hold, that he was not impartial.

It was held that no party is entitled to expect an oral hearing, but the adjudicator must not make up his mind to shut out further comments from a party, merely because he believes that any comment he receives on newly acquired and material information from other sources will not affect his view as to that party's position.  The basic statutory requirements of fairness are to be complied with.

It was held that the adjudicator, in order to make a valid and enforceable decision, must act in conformity with the rules of the Scheme.  There will be occasions when an adjudicator's departure from these rules is insignificant and not such as to preclude enforcement.  Where the departures are significant, the decision is one taken outside the framework of the Scheme and is not one which a court will ordinarily enforce.  the application for summary judgment was dismissed.