William Verry (Glazing Systems) Ltd v Furlong Homes Ltd

BACKGROUND AND RELEVANT DOCUMENTS

By their Part 8 Claim dated 21^st December 2004, the Claimant, William Verry (Glazing Systems) Ltd, whom I shall call Verry, seeks a declaration that the adjudicator’s Decision dated the 26^th October 2004 was valid and binding upon both parties until the matters referred to in that Decision are finally determined by the Court. The Defendant, Furlong Homes Ltd, whom I shall call Furlong, contends that the Decision was invalid because the adjudicator exceeded his jurisdiction in arriving at his conclusions, or alternatively acted unfairly in reaching that Decision. As a result of the detailed nature of the dispute between the parties it is necessary for me to set out a number of important matters by way of background.

By a Contract dated the 6^th March 2003 and signed in June 2003, Verry agreed to carry out certain works for Furlong. Those works were described as “design, supply and erect curtain walling, long span cladding, aluminium soffits, fascias and copings to high levels including all necessary fire stopping and sealing”. The Contract sum was £1,150,024.75. The Contract completion date was late 2003. Clause 3(b) was the contractual mechanism by which that completion date might be extended by Furlong if the delay was caused `by any act, instruction, default or omission’ of Furlong themselves.

The works progressed during 2003 and were not finally completed until the end of July 2004. Therefore, on any view, there were significant delays. Furlong granted Verry two extensions of time to 2^nd February 2004 but Verry maintained that they were entitled to a much longer extension. On the 2^nd July 2004 Verry submitted to Furlong in writing a claim for an extension of time down to the 24^th June 2004, together with their final account claim. Their letter of the 2^nd July concluded as follows:

Furlong responded on the 13^th August 2004. Their final account figure was £1,036,088.13. In response to Verry’s extension of time claim, Furlong were brusque:

Furlong then set out details of their calculation of the Verry final account and, because the sum which they had previously paid was greater than the amount which Furlong now claimed the final account was worth, they sought repayment of a net sum of £143,898.15. The letter concluded:

It should be noted that there was no response in the letter itself to the detail of the Verry claim made on the 2^nd July, a point that the adjudicator was to make in paragraph 65 of his Decision. There were, however, some ‘Notes’ on the extension of time claim produced by Furlong and allegedly sent with this letter, although there was some debate as to whether these were ever received by Verry.

On the 24^th August Verry replied to this letter by recorded delivery, and said that they were disappointed with Furlong’s stance. Amongst other things they said:

Further assertions were made by Verry in this letter about the lack of substantiation for the claims being made by Furlong, and they ended their letter:

Furlong had already written on the 16^th August, extending the deadline in relation to their own payment proposal until Friday 27^th August 2004. It was therefore clear that by that date, on any view, a dispute existed between the parties in relation to the value of the final account.

On the 31^st August 2004, Furlong, through their Agents Henry Cooper Consultants Limited, whom I shall refer to as HCC, sent Verry a Notice of Adjudication. In his submissions to me Mr Bingham submitted that this Notice “was the foundation for the scope of jurisdiction of the adjudicator”. I agree with that: the Notice identified plainly the parameters of the dispute that was being referred to the adjudicator. In those circumstances, it is sensible for me to set out the Notice in full:

It is important to note two things about this Notice of Adjudication. First, it referred to adjudication the entirety of the dispute about the Verry final account figure. This meant that Furlong wanted the adjudicator, during the statutory twenty-eight days, to reach decisions about disputed variations, extensions of time, loss expense and liquidated damages. In other words, all the potential disputes which can arise under a Building Contract were here being referred to adjudication. There was no express limitation or qualification on the range of matters for decision. It was, to use the vernacular, a ‘kitchen sink’ final account adjudication. Whilst such adjudications are not expressly prohibited by the Housing Grants, Construction and Regeneration Act 1997 as it presently stands, there is little doubt that composite and complex disputes such as this cannot easily be accommodated within the summary procedure of adjudication. A referring party should think very carefully before using the adjudication process to try and obtain some sort of perceived tactical advantage in final account negotiations and, in so doing, squeezing a wide-ranging final account dispute into a procedure for which it is fundamentally unsuited.

The second point about the Notice of Adjudication concerns Verry’s claimed entitlement to an extension of time. One dispute which was set out in the Notice was a request that the adjudicator decide whether or not `the extension of time granted by Furlong to the 2^nd February 2004 is correct’ (my emphasis). In other words, there was no attempt to limit the dispute to earlier claims made or information previously provided by Verry and considered by Furlong. The dispute was whether the existing extensionis – present tense – correct. Furthermore, such a broad definition of the extension of time dispute was entirely consistent with the reference to the adjudicator of the dispute about Furlong’s entitlement to liquidated damages. The adjudicator could not decide Furlong’s existing entitlement to liquidated damages without first deciding Verry’s existing entitlement to an extension of time. The two have to be considered together.

Further additional costs have been notified to Furlong since the account statement and Furlong requests that the Adjudicator deals with that within this Adjudication in order to finally conclude the account.

The amounts are included in the summary of the accounts. The Adjudicator has been given jurisdiction to decide on any such other amount confirming requests that these additional costs are taken into account within the Adjudicator’s decision.”

The statutory twenty-eight day period for the adjudication expired on the 5^th October 2004. On the 10^th September the adjudicator sought and obtained an extension of time to the 12^th October 2004. Eventually, by a process of ad hoc extensions that arose inevitably from the morass of material that the adjudicator was obliged to consider, the parties agreed to extend the adjudicator’s time for providing his Decision until the 26^th October 2004. Such ad hoc extensions to the period prescribed in the Act are a common feature of adjudications where the subject matter is the complete review of a lengthy contract: see for instance CIB –v- Birse[2004] EWHC 2365. In their turn Verry sought and obtained an extension of time to respond to the Referral Notice until the 21^st September 2004. Section D of that response was headed: “What is William Verry’s proper entitlement to an extension of time?” and paragraph 62 – 132 set out in detail a claim for an extension of time down to the 27^th July 2004.

It was not until eight days later, on the 29^th September, that HCC wrote to the adjudicator to complain that Section D involved a new extension of time claim. Mr Smith of HCC said:

In a separate letter on the same date Mr Smith sought an extension to 5^th October for Furlong to reply to the Verry response which would then have given Furlong a total period of fourteen days to reply, which was as long as Verry had to respond to the claim itself. Whilst these periods were not unreasonable, given the numerous details within the final account, they (like the extensions sought by the adjudicator himself and referred to in paragraph 15 above) illustrate graphically the difficulties of trying to deal properly with final account disputes of this kind using the adjudication process.

Also on the 29^th September, the adjudicator, in response to Furlong’s letter of complaint, seemed sympathetic:

On 1^st October 2004 DCL, acting on behalf of Verry, dealt at length with these suggestions. Essentially they contended that Nuttallwas only relevant to a party who was making a claim and, in so doing, was seeking to raise for the first time in an adjudication a claim which had never been raised before; they argued that where, as here, the referring party was contending that the responding party was only entitled to a specific extension of time, the responding party was entitled to refute that argument by any proper means and if that meant making points which had not been made before then that was entirely legitimate. In making this submission, DCL relied on the decision of His Honour Judge Toulmin QC in AWG Construction Services Limited –v- Rockingham Motors Speedway Limited, which did not adopt the analysis in Nuttall.

In his letter of the 4^th October 2004, the adjudicator considered the point again and concluded, contrary to his earlier view, that Verry were entitled to rely on the matters set out in Section D of the response. He said, having considered the two authorities to which I have previously referred:

Mr Smith of HCC was quick to respond to that letter making it plain that he did not agree with the adjudicator’s new view. He said that Verry advanced a case for an extension of time to the 24^th June in their letter of 2^nd July and that in the response document Verry were trying to advance a case for an extension time to the 31^st July which was, he said, a different case. He went on to say that:

The adjudicator’s change of view came too late to affect Furlong’s formal reply to Verry’s response. That was served on the 5^th October 2004 under cover of a letter which made clear that the new extension of time claim, as it was called, had been ignored. However, in the light of the adjudicator’s decision on the point on 4^th October (paragraph 20 above) and his further letter of the 6^th October 2004, Furlong decided that they had to put in a response to that new extension of time claim. A lengthy document containing 107 paragraphs was served on the 11^th October 2004, which purported to reply to Section D of the Verry response document. The reply of the 11^th October 2004 did not claim that it had been impossible for Furlong or HCC to respond to the points made in Section D; on the contrary, the reply appeared to deal with each of the points advanced by Verry.

As to the status of the Verry response document, and the allegedly new claim that it contained, it seems to me that Mr Smith of HCC rather muddied the waters in his covering letter of the 11^th October 2004 when he said:

In my judgment, it was always going to be extremely difficult – if not impossible – for the adjudicator to try and follow this suggestion in practice because on any view the dividing lines between what HCC called the ‘old’ claim and the ‘new’ claim were extremely blurred. Take for example, an item of delay which was in both claims: if the only difference between the detail of the two claims was the suggestion in the new claim that the delay actually caused by that event was longer than previously indicated, it simply would not have been practicable for the adjudicator to take the longer period into account for one purpose, but not another.

Verry responded to this document, as well as other matters, on the 13^th October, and Furlong, who were keen to have the last word, replied again on the 18^th October. The adjudicator’s Decision was provided on the 26^th October 2004. Amongst other findings that he made in favour of Verry was his conclusion that Verry were entitled to an extension of time to the 27^th July 2004.

Furlong had commenced the adjudication but, in the event, they had done badly. Accordingly, they indicated that they did not regard themselves as bound by the adjudicator’s Decision. This in turn explains Verry’s claim in this action for a declaration that the adjudicator’s Decision is binding. As I have indicated, Furlong contend that the Decision was not binding and should not be enforced because the adjudicator did not have the jurisdiction to consider what they call Verry’s new claim for an extension of time and/or because Verry’s new claim led to unfairness and a substantial risk of injustice.

The various arguments that now arise in this case have been made clearly and succinctly today by Mr McMullen, who appeared on behalf of Verry, and Mr Bingham, who appeared on behalf of Furlong. I ought to point out that Counsel have been able to complete their arguments in just over half a day despite the fact that there are a large number of documents and authorities which less skilful advocates might have taken days to deal with, I therefore acknowledge with gratitude my debt to them.

JURISDICTION

It seems to me that the central issue of jurisdiction incorporates three possible sub-issues. First, was Section D of Verry’s response a new claim for an extension of time which had not been made before? Secondly, if it was, were Verry entitled to rely on it in the adjudication? Thirdly, if Verry were not entitled to rely on it in principle, were they able to rely on it in fact because, by their conduct, Furlong effectively gave the Adjudicator the necessary jurisdiction.

Mr Bingham submitted that the claim made in Section D was a new claim by Verry for an extension of time which had not been made pursuant to the Contract machinery of Clause 3B and was very different to the claim of the 2^nd July 2004, which he said was the only claim which the adjudicator was entitled to have regard to. On the other hand, Mr McMullan argued that the claim was not a new claim; that the Section D claim was fundamentally the same claim as that made in the letter of the 2^nd July 2004; and the letter of the 2^nd July 2004 was a skeletal depiction of the claim which was expanded in greater detail in Section D of the response document.

In my judgment it would be excessively legalistic to classify Section D of Verry’s response as a new claim. It is simply a fuller explanation for the claim originally made on the 2^nd July 2004. The fact that a new extension date was sought in Section D merely reflected the fact that work continued on site after the 2^nd July 2004 (when the Verry claim was first made) and down to the 27^th July 2004.

In reaching that conclusion I have had particular regard to Appendix A produced by Mr Smith of HCC. That analysis, in my judgment, makes clear that the actual events relied on by Verry in seeking an extension of time down to the 2^nd July 2004 in the letter of the same date were essentially repeated again in Section D of their response. The only real difference was that sometimes different – usually longer - periods of delay were ascribed to those events and, in almost all cases, further supporting information was provided in Section D. Thus, in my view, Section D was not a new claim and could properly be described as a refinement or an enhancement of the claim that had been made at the time that the adjudication started.

I should also refer to the evidence of Mr Gamble of Verry on this topic whose statement at paragraphs 4 and 5 said:

The fact that since the claim for extension time had been submitted on the 2^nd July Verry had completed its work on site on the 31^st July and was therefore in a position to finalise its claim

The fact that Verry expanded its narrative to enable the Adjudicator, who unlike Furlong was not familiar with the project, to understand the factual background to various claims of extension of time

The facts and basis of Verry’s claims for an extension of time did not change between the 2^nd July 2004 and the response document of the 24^th September 2004 and accordingly was not new.”

On the basis of the information with which I have been provided, I agree with and accept that conclusion. It seems to me therefore that, on this basis alone, this case is far removed from the situation described by His Honour Judge Seymour QC inNutall to which I refer in more detail below .Accordingly, I find that Section D of Verry’s response was not a new claim and contained material to which the adjudicator was entitled to have regard in any event. It seems to me therefore that on that ground alone the jurisdiction challenge must fail. However, I go on to consider the second question identified above – namely whether, if it was a new claim, the Adjudicator was entitled to have regard to it – on the assumption that I am wrong on this point and that it is appropriate to classify Section D of Verry’s response as a new claim.

Mr Bingham submitted that the adjudicator could not take into account the claim in Section D because it was a new claim which had not previously been made. He said that the claim should have been submitted to Furlong’s Mr Dove under the Contract for proper consideration and the adjudicator had no jurisdiction to consider a claim which had not been subject to that agreed process. He submitted that all claims for extensions of time had to be put to Mr Dove and Mr Dove had to reject them before they could then be raised by Verry in an adjudication. Mr McMullan submitted that it would be wrong to find that, in the adjudication, Verry should in some way be restricted to the points in their letter of the 2^nd July 2004; he said that there was nothing in the documents, and in particular the Notice of Adjudication and the Referral Notice, that could lead to any such restriction.

As a matter of construction of the relevant documents, and as a matter of commercial common sense, I consider that Mr McMullan is right. The overwhelming reason for this conclusion is the one which I have already identified in paragraphs 12-14 above, namely that neither the Notice of Adjudication nor the Referral Notice can be fairly read as restricting the extension of time claim to be considered by the adjudicator to the one set out in brief terms in the letter from Verry to Furlong of the 2^nd July 2004. The Notice of Adjudication makes no reference to that letter or claim at all and merely asks the adjudicator to decide that the extension of time granted down to the 2^nd February 2004 is correct. That extension of time had of course been granted before the claim of the 2^nd July 2004 had even been made. If Furlong had wanted to restrict the scope of the adjudicator’s investigation they could have defined the dispute as to whether or not, solely on the basis of the letter of the 2^nd July 2004 and the information contained within it, Verry were entitled to an extension of time beyond the 2^nd February 2004. Of course, they failed to do so. Even when, in the Referral Notice, they did describe the the issue as being whether the extension of time was correct “based on the information provided”, Furlong went on in the alternative to ask the adjudicator “to decide the appropriate extension of time”. That was, it seems to me, a completely open-ended and unqualified request which was not limited in any way to the extension of time which had been previously claimed or granted .

It is fair, I think, to note that in relation to the Notice of Adjudication and the Referral Notice, there was, as sometimes happens in these circumstances, a certain amount of rewriting of history going on towards the end of the adjudication. I refer by way of example only to Mr Smith’s letter of the 18^th October 2004. In that letter he said this:

Having reached that firm conclusion on the basis of the relevant documents, the remaining question is whether the many authorities on the question of what is and what is not validly part of ‘a dispute’ in adjudication should lead me to a different conclusion to the one that I have outlined above. On analysis, I consider that the cases only serve to confirm the conclusion which I have reached.

There are, as has been pointed out, a raft of decisions dealing with the definition of ‘a dispute’ for the purposes of adjudication. A number of the more important decisions have been usefully gathered together by Jackson J in AMECCivil Engineering Ltd –v- The Secretary of State for Transport [2004] EWHC 2339 which I hope will be taken as the starting point when cases on this topic are cited in or to the TCC in future. The relevant authorities to which I have had regard and which he summarised there are Monmouthshire County Council –v- Costelloe and Kemple 5 BLR 83; Tradax International –v- Cerrahogullari [1981] 3 All ER 344; Ellerine Brothers –v- Klinger [1982] 1 WLR 175; Cruden Construction v Commissionfor New Towns 2 Lloyd’s Law Reports 37; the important Court of Appeal decision in Halki Shipping Corporation –v- Sopex Oils [1988] 1 WLR 726; FastrackContractors –v- Morrison Construction Ltd [2000] BLR 168; Sindall v- Soland 80 Con LR 152 ; and Beck Peppiatt Ltd –v- Norwest Holst Construction [2003] BLR316.

These authorities having been summarised by Jackson J in AMEC, he then derived from them seven principles to which I was referred by Mr Bingham. It seems to me that these principles are mainly concerned with the issue as to when a failure to respond to a claim or claim document, as opposed to an outright rejection of that claim, can trigger or crystallise a dispute so as to enable the adjudication process to begin. As such these principles themselves are not directly relevant to this case, which is principally concerned with what can and cannot be relied upon by a party when setting out its case in adjudication.

The starting point for any consideration of that specific topic is Edmund Nuttall v R.G Carter to which I have already referred. This decision was expressly considered by the adjudicator. There, Nuttall had made an extension of time claim which had been rejected. When they commenced adjudication they did so by reference to a new expert’s report which put forward the extension of time claim in a way that was entirely different to the previous claim. In particular, wholly new events were relied upon in the report as being the cause of the critical delays. The adjudicator decided that Nuttall were entitled to an extension of time on that new basis but Nuttall were not able to enforce the decision. HH Judge Seymour QC found that there could be no crystallised dispute in relation to the claim set out in the report because such a claim had not been provided, let alone considered and disputed by Carter, prior to the adjudication.

The Judge said, at paragraph 36:

This has been referred to in some of the later authorities as “the restricted view” of the word ‘dispute’. It has been distinguished and/or not followed in a number of the later cases including the decisions of Her Honour Judge Kirkham in Cowlin Construction –v- C. F.W Architects [2003] BLR 241; of His Honour Judge Wilcox in London and Amsterdam –v- Waterman Partnership [2003] 91BLR; and of His Honour Judge Toulmin QC in AWG Construction Services Ltd –v- Rockingham Motor Speedway Ltd [2004] EWHC 888.

In each of these three cases, as well as those referred to in paragraph 38 above, the Courts have stated that the word ‘dispute’ is to be given its ordinary and natural meaning and that it “included any claim which the other party refused to admit or did not pay whether or not there was an answer to the claim in fact in law.”

I note that in Cowlin Her Honour Judge Kirkham said:

The Courts’ present approach to the scope of the dispute in any given adjudication is probably best summarised by His Honour Judge Toulmin QC in AWG. He analysed the various authorities and it is unnecessary for me to set out in all the relevant paragraphs of his judgment. I do, however, set out his conclusions starting at paragraph 141:

In general, the restrictive approach in Nuttall (which was in any event a case with an extreme set of facts) has not been followed; instead the Courts have taken a robust view as to what makes up the real dispute in any given case, having regard to its particular facts. That is the approach I have adopted here. Applying that robust approach to the facts which I have already set out, I find that even if, which I do not accept, Section D could be classified as a new claim for an extension of time, it clearly formed part of the dispute which was referred by Furlong to adjudication. The detailed reasons for this conclusion have, of course, already been set out in paragraphs 35 and 36 above.

Of course, in the present case there is an additional reason for my conclusion, namely the very point that swayed the adjudicator in the first place. Verry were responding to this claim and were not themselves the referring party. They did not start the adjudication. They had to defend themselves as best they could against the allegation that their only entitlement to an extension of time was down to the 2^nd February 2004 and that liquidated damages should be deducted for the period of delay thereafter. In my judgment, they were not to be taken as having agreed that they could only defend themselves in the adjudication with half a shield, able to rely on some matters of fact but being artificially prevented from referring to others. It seems to me that that would be an absurd result. In my judgment, Verry were entitled to take whatever points they liked to defend themselves against the assertion that their extension entitlement was limited in the way advanced by Furlong and the adjudicator was obliged to consider all the points which they raised.

It seems to me, therefore, that this case is a good example of what His Honour Judge Thornton QC was referring to in Fastrack Contractors –v- Morrison when he said:

Both cases are directly in point here. Having made a general and unqualified request to the Adjudicator to decide the question of extension of time, Furlong cannot now complain because, in seeking to defend themselves Verry have raised a variety of matters which (on Furlong’s approach) are new. Furlong sought a resolution of that entitlement to an extension of time and they claimed positively that such an extension of time could not extend beyond the 2^nd February 2004. Verry were entitled to defend themselves against that assertion and if that led them to rely upon matters which were not part of a previous formal claim then there was nothing to stop Verry from doing so.

Accordingly I conclude that even if Section D did somehow constitute a new claim it was material which the adjudicator was entitled to take into account when deciding the wide ranging dispute referred to him by Furlong. The jurisdiction challenge fails. It is therefore unnecessary for me to decide whether or not Furlong voluntarily accepted his jurisdiction. It was always part of the adjudicator’s jurisdiction to consider all the points put forward by Verry in defence of the assertion that their entitlement was limited to an extension of time to the 2^nd February 2004.

PROCEDURAL IRREGULARITIES

The remaining question is whether, even though the adjudicator was entitled to consider Section D, he dealt with it in some way unfairly.

By way of background I should say that in my judgment the adjudicator did all that he could to ensure that both parties had sufficient time to deal with Section D. Section D was served on the 21^st September 2004 and it was not until the 11^th October 2004 that Furlong responded to it, which was a total of 20 days. In the context of an adjudication which should have taken just 28 days from start to finish that was more than adequate time for Furlong to deal with the detail of the new claim. I have already made the point that the response from Furlong did not suggest that there were any matters with which they had been unable to deal.

As to the allegations of procedural irregularity, Mr Bingham has put them with considerable fairness and not a little skill but he recognised that they were not straight forward. The first suggestion was that the Adjudicator did not have enough time to deal with the adjudication because of the introduction of Section D and he should have warned the parties to that effect. In this regard Furlong rely on paragraph 40 of the Decision. I shall set out paragraph 40 in full because it is important to see what the Adjudicator actually said:

It seems to me that the Adjudicator’s comments at paragraph 40 were general and did not relate specifically to Section D. More importantly, it seems to me that no-one could expect an adjudicator, operating on a tight timetable and obliged to reach a decision on every possible dispute that could arise under a building contract that took a year to perform, could deal with each point with the same care and detail as if the point was being decided in litigation or arbitration. This was an adjudication, which is an entirely different form of dispute resolution. It seems to me that that is all the Adjudicator is saying in this paragraph. I regard it as unexceptionable and a simple reflection of the realities of raising final account claims like these by way of adjudication.

Furthermore, in my judgment, it does not lie in the mouth of Furlong to criticise the suitability of the adjudication process for final account claims when they themselves started this adjudication. They clearly thought, for better or for worse, that there was an advantage to be gained in starting an adjudication which encompassed all these individual disputes. They hoped to score an early victory over Verry, despite the fact that the adjudicator would always have been struggling to deal in detail with everything in the limited time he had: they therefore took a risk and in the event it backfired on them. For them now to complain about the result of the process which they put in train in the first place seems to me not only wrong and unfair but misconceived.

In my judgment, paragraph 40 of the adjudicator’s Decision is entirely unexceptionable. The comments he made there are a reflection of the summary nature of adjudication generally and the complexity and difficulty of this type of adjudication in particular.

Mr Bingham next contended that if an adjudicator runs out of time and cannot produce a fair decision within the statutory time limit he should say so, and not go on to reach an unfair Decision. I accept that proposition, and to that extent, therefore, I would agree not only with Mr Bingham but with the analysis of His Honour Judge Toulmin QC in CIB –v- Birse (above). In both that case and this, despite the mass of material, the adjudicator felt that he was able to come to a proper decision on the matters raised before him. I have seen nothing to suggest that Mr Sims’ decision in this case was, or even might have been, unfair. On the contrary, it seems to me that the adjudicator in this case produced a detailed and painstaking decision which properly reflected all the material with which he had been provided. I reject any suggestion that the Decision, or the way it was arrived at, was or even might have been unfair.

Finally, on this question of timing, I am bound to note that the adjudicator expressly warned the parties that he might need longer than the 26^th October to produce his Decision. He did that in his letter of the 19^th October. In the event he did not need that further time and he produced his Decision by the 26^th October. It might be thought that this is the best possible evidence that the adjudicator did not require additional time beyond the 26^th October, so there was nothing to warn the parties about in any event.

Furlong’s final complaint was that the result of the adjudication was unfair because the adjudicator, having effectively encouraged Furlong to seek from Verry a considerable amount of further documentation, then wrote on the 18^th October 2004 to hint that if Verry did not produce the documents, that omission would be reflected in the result of the adjudication. Furlong say that, in consequence, they did not pursue their request. They now say that, because this indication was not in the end reflected in the result of the adjudication (because Verry got a complete extension of time), this was palpably unfair and amounted to a procedural irregularity on the part of the adjudicator.

Mr Bingham relies by analogy on a decision in respect of Arbitration Vee Networks Ltd –v- Econet Wireless International Ltd [2004] EWHC 2909. There, at paragraph 90, Colman J set out what is required in order to establish serious injustice under Section 68 of the Arbitration Act. He makes it plain that:

On the basis of the information which I have, it seems to me that an irregularity

has simply not been made out on the facts. The relevant part of the adjudicator’s letter of the 18^th October 2004 said this:

“I therefore ask Furlong and HCC on their behalf, to consider very carefully whether it is really necessary for the establishment of their case, although accurately the refutation of Verry’s case, for the volume of material which DCL has indicated involved, to be copied and sent to them and to me, process which itself would take some time and not inconsiderable costs, followed by the process of analysis and comment by HCC for Furlong. It is possible that DCL, for Verry, will then argue that they have a right to respond to Furlong’s submissions on this further evidence. They may well argue as DCL have already done in their letter, that delivery tickets etc. are not necessarily conclusive evidence that delays were due to later deliveries, as they may seek to show that deliveries were postponed because of previous delays, making it undesirable for materials to be delivered until they could be used. I understand that this whole process will take at least until the end of this week, and that it will require at least another week for me to finalise my decision.”

As a result of that paragraph, Mr Smith of HCC, chose not to pursue further these outstanding delivery tickets etc, a point that was noted in the adjudicator’s letter of the 19^th October 2004. It appears that, by this time, the adjudicator had reached the conclusion that he had enough information to resolve the matters that were in dispute in the adjudication. For that reason, it does not seem to me that the adjudicator was saying that the failure to provide the extra documents would be reflected in the Decision: he was merely saying that he had sufficient material to reach his Decision without the further material.

62.

Therefore, I do not believe that the point raised in respect of the documents and their non-provision gave rise to, or could have given rise to, any irregularity of the sort referred to in Vee. In any event, it seems to me that it is impossible for me to reach the view that these further delivery tickets and the like would have made any difference to the outcome of the adjudication; the clear indication in the adjudicator’s letter of the 18^th October is that they would not. Accordingly the necessary requirement of demonstrating the real possibility of injustice is also not made out.

63.

I should conclude by referring again to the adjudicator’s letter of the 18^th October. There the adjudicator said:

“My task is certainly to arrive at a decision which, so far as practically possible, is soundly based upon evidence so that the parties may accept it as being a reasonable resolution of the dispute.”

On all the evidence I have seen, I have no hesitation in concluding that that is precisely what the adjudicator did. His decision is therefore binding on the parties until it is the subject of a final decision by the Court. In those circumstances I grant the declaration sought by Verry.

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