Adjudication
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KEYWORDS: |
Housing Grants Construction and Regeneration Act 1996, adjudicator's fees, natural person, |
In Faithful and Gould Limited v Arcal Limited (2001) TCC the issue was whether a party to an adjudication under the Housing Grants Construction and Regeneration Act 1996 was liable to pay the Adjudicator's fees to the Adjudicator's employers.
Arcal had commenced an adjudication and Mr Gray had been appointed as the adjudicator. Arcal were in receivership. The decision went against them. Mr Gray was not paid his fees and his employer Faithful and Gould Limited claimed payment of his outstanding fees. Arcal together with the co-defendant receivers applied to have the claim struck out as disclosing no cause of action.
The original dispute had arisen between Arcal and Admiral Construction Limited in which Arcal wished to seek an adjudication claiming the sum of £36,212.13. The Court observed that it was likely that Arcal did not have the funds to pay for the adjudication and hoped to do so from the proceeds of it. There had been two previous attempts at adjudication and in both Mr Kevin Hayes was appointed. In the first he completed his adjudication but was not paid and therefore did not deliver it. On the second Arcal tried to get him to agree to treat his fees as an unsecured claim. He again refused and his appointment was terminated.
Mr Gray sought assurances that his fees would be paid personally by the defendants. They never said they would and they never said they would not. In effect they agreed to be bound by the Adjudicator's decision. Arcal were not awarded anything and Mr Gray ordered Arcal to pay his costs.
Arcal argued that the contract they made was to pay the fees of Mr Gray and not Faithful and Gould Limited. Arcal stated that the rules require an adjudicator to be a natural person acting in his personal capacity (Construction Contracts (Exclusion) Order 1998 Schedule 1, Part 4). The reason for this is that the role of the adjudicator must be carried out by one person, an individual. It was held that there was nothing in the Regulations that requires an adjudicator to sue for his fees in any personal/natural capacity. It was held that the application was both unattractive and untenable.
The application to strike out was dismissed.