Lane End Developments Construction Ltd v Kingstone Civil Engineering Ltd

Introduction

These proceedings relate to an adjudicator’s decision dated 27^th April 2020 (“the 27^th April Decision”) under the Scheme for Construction Contracts (England and Wales) Regulations 1998, as amended (“the Scheme”).

There are two claims before the Court, namely a claim under CPR Part 8 for a “declaration” that the 27^th April Decision “should be set aside and/or not enforced” and a cross claim under CPR Part 7 for the payment of £358,970.39 under the Decision.

Lane End Developments Construction Limited (“Lane End”) is the Claimant in the Part 8 proceedings and the Defendant in the Part 7 proceedings. It was the main contractor on a housing development (“the Development”) at Rilshaw Lane, Winsford, Cheshire (“the Site”). Kingstone Civil Engineering Limited (“Kingstone”) is the Defendant in the Part 8 proceedings and the Claimant in the Part 7 proceedings. It was sub-contracted to carry out enabling works for the Development.

Lane End now seeks the substantive determination of its Part 8 claim and Kingstone seeks summary judgment on its Part 7 claim.

The main issues are whether the adjudicator had jurisdiction to make the 27^th April Decision and, if not, whether, as responding party, Lane End has waived the defect by election or is estopped from relying upon it.

Factual and procedural sequence

On 19^th November 2018, the parties entered into the relevant sub-contract (“the SubContract”). It was denoted as a “Minor Works Sub Contract Agreement” for “the supply of all supervision, labour and materials needed to carry out enabling works including cabin foundations, temporary compound and carpark and connection for cabins at…” the Site. The Sub-Contract sum, fixed for the duration of the main contract, was £54,158.40.

The Sub-Contract did not make express provision for disputes to be referred to adjudication. By virtue of Section 108(5) and Section 114(4) of the Housing, Grants, Construction and Regeneration Act 1996, the Scheme applied and the provisions of the Scheme were incorporated as implied contractual terms.

On 2^nd March 2020, Kingstone issued Interim Payment Application No. 17 in the sum of £356,439.19 for the period ending on 29^th February 2020. Lane End did not serve a Pay Less Notice nor, until 26^th March, did it serve a Payment Notice.

On 20^th March, Kingstone submitted a request (“the Request”) to the RICS for the appointment of an adjudicator. This request was contained in an email, timed at 07:46, from Mr Barker of Qualsurv Consulting Limited, to the RICS Dispute Resolution Service.

Later that day, there was a meeting (“the 20^th March Meeting”) at Lane End’s offices between representatives of Kingstone and Lane End in which Mr Barker gave the representatives of Lane End a document headed “Notice of Referral” recording Lane End’s putative failure to make payment and seeking redress, at Adjudication, in the sum of £356,439.19. This notice was apparently served shortly after 11 am and it is now common ground that, subject to issues of timing, it was apt to amount to a notice of adjudication. I shall thus refer to this notice as “the Notice of Adjudication”. It has recently emerged that Mr Barker covertly recorded the 20^th March Meeting and there is an issue as to whether I should admit, in evidence, his recording together with a witness statement dated 19^th June 2019 from Mr Barker incorporating his own commentary based on the recording.

By letter dated 23^rd March, Mr Paul Jensen advised the parties that the RICS had nominated him to act as Adjudicator and he accepted the nomination. He also made directions providing for Kingstone to send its “Referral” incorporating particulars of the dispute and Lane End to provide its Response.

Pursuant to Mr Jensen’s directions, Kingstone circulated another document dated 23^rd

By email timed at 18:25 on 24^th March, Lane End through its agent Mr John Mason challenged Mr Jensen’s nomination on the grounds that Kingstone had failed to give Lane End notice of adjudication under the Scheme. The email was sent to Mr Jensen himself and copied to Kingstone’s representatives. When referred to the Notice of Adjudication, Mr Mason initially contended that it did not comply with the Scheme but he did so by taking a point of interpretation, suggesting it did not do enough to disclose an intention to refer the dispute to adjudication. Mr Mason did not specifically take a point about the timing of the Notice of Adjudication but, by an email timed at 15:04 on 25^th March, he “reserved the position of our client as to the Adjudicator’s jurisdiction”.

By an email timed at 16:17 on 25^th March, Mr Jensen advised the parties that, contrary to Mr Mason’s comments, “I find that the [Notice of Adjudication] contains a clear intention to refer the dispute described therein to adjudication”.

By an automatically generated email timed at 8:39 on 8^th April, Mr Steven Anders, of

Lane End did not notify Kingstone that Mr Jensen had purported to terminate the adjudication until 15^th April. By an email timed at 17:04 later that day, Mr Barker requested Mr Jensen to “continue with [his] appointment and issue [his] decision accordingly.” In another email to Mr Jensen, timed some three hours later at 20:06, Mr Barker confirmed that Kingstone had “not received any formal notification from the Adjudicator that the Adjudication has been terminated” and submitted that Mr Jensen’s purported notice of termination was thus “null and void”. Meanwhile, Lane End electronically transferred to Mr Jensen the full amount outstanding under his invoice dated 8^th April 2020.

By an email timed at 09:18 on 16^th April, Mr Jensen advised both parties that it was apparent to him that Lane End was “not closed for business; I have not resigned and therefore I will continue”. Some thirty minutes later, at 09:53, Mr Mason asked Mr

By an email timed at 15:44 on 23^rd April, Mr Mason emailed Mr Jensen its Rejoinder again having expressly reserved its position as to his jurisdiction.

By the 27^th April Decision, Mr Jensen concluded that Kingstone was entitled to the full amount in Interim Application No. 17, ie £356,439.19, on the basis it had first become due on 9^th March 2020, 7 days after the claim was first issued, and the final date for payment was 26^th March, 17 days later, in accordance with Paragraphs 7(b) and 9(2) of Part II of the Schedule to the Scheme. Whilst Lane End had apparently issue a Payment Notice, this was not issued until 26^th March 2020 and was thus outside the period allowed by Paragraph 9(2) of the Scheme, namely five days after the payment due date.

The regulatory framework

The 1998 Regulations were amended by the Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment)(England) Regulations 2011. The relevant provisions of the Scheme are contained in the Schedule in its amended form. They are as follows.

The covert recording of the 20^th March Meeting

The hearing before me was fixed simply for the substantive determination of Lane End’s

Lane End was thus prompted to file evidence in response. The parties jointly applied for an order permitting Lane End “to serve an additional witness statement dealing with a single point arising from the witness evidence served by [Kingstone] on 12 and 13 June 2020 by 5pm on 17^th June 2020 and for Kingstone “to serve rebuttal evidence limited to the single point addressed by [Lane End] by 5pm on…19^th June 2020”. “The single point” was not identified but it can reasonably be inferred that it related to Mr Dulson’s alleged comment about the receipt of the nomination request. In due course, the Court made an order in the terms sought (“the June Order”). Meanwhile, Mr Dulson made a witness statement dated 17^th June 2020 in which he confirmed the following.

“[6.3] I…did not see or speak to Mr Haubus or any other Kingstone representative prior to or during the meeting on 20 March 2020. I was not involved in the meeting and remained upstairs in my office until after the meeting had concluded. I then met with Mr Haubus privately to discuss resolving any potential disputes between Lane End and Kingstone.

[6.4] As stated in my first witness statement, I have never been involved in adjudication proceedings before. I was therefore unaware that an application to the RICS would have been made and what role that RICS played in the adjudication. I certainly would not have had the knowledge to allow me to have a discussion with Mr Haubus or any other person about what had or had not been received from the RICS or otherwise”.

In response, Kingstone has filed witness statements dated 19^th June 2020 from Messrs

In his witness statement dated 19^th June 2020, Mr Barker stated that he had “voice recorded” the 20^th March Meeting and he exhibited the recording on an electronic storage device. Based on this, his witness statement included a running commentary of the meeting itself. Mr Barker suggests that it is possible to discern a point in the conversation in which Mr Haubus whispered to him, albeit in terms that are barely audible, and that Mr Barker could himself be heard to whisper that he was surprised the RICS had acted so quickly.

Under CPR 32.1, the Court is entitled to control the evidence. This includes a power under CPR 32.1(2) to exclude evidence that would otherwise be admissible. Under these provisions, Ms Serena Cheng QC, for Lane End, submitted that I should exclude Mr Barker’s witness statement dated 19^th June 2020 and the audio recording itself on the basis it was of limited probative value. She also submitted that the evidence had been adduced at short notice without allowing Lane End a proper opportunity to deal with it and that to admit it would be contrary to Mr Dulson’s right of privacy under ECHR Article 8. The issue was also canvassed as to whether, by covertly recording the meeting, Mr Barker processed “personal data” within the meaning of GDPR Article 4(1) without complying with the regulatory requirements of the GDPR and thus acted unlawfully.

In response, Mr Anthony Philpott submitted that the relevant evidence was probative of the issue “of whether Lane End knew or should have known that they should have specifically reserved jurisdiction on 20 March 2020 or thereabouts…because Kingstone says Mr Dulson and the personnel and representatives of Lane End were informed that Kingstone had commenced Adjudication that morning and that they had commenced the Adjudication by submitting the Adjudication nomination form to the RICS” (Kingstone’s Written Submissions dated 20^th July 2020). He also submitted that “the recording was produced in good time for the hearing on 30 June 2020 and the solicitors for Lane End remained silent in the face of it and raised no objection to it” (Para 39). It is at least implicit in his submissions that Lane End’s representatives at the 20^th March Meeting – Messrs Ian Power, Michael Cunningham and Tom Hogan – could not have had any reasonable expectation of privacy at the meeting. Mr Philpott also sought to emphasise that Mr Barker recorded the meeting simply to assist in the preparation of his own notes and ensure that he had not misheard or misunderstood anything, not with any ulterior motive. Mr Philpott submitted that there could be no issue in relation to the application of the GDPR since Mr Barker had taken the recording as “a natural person in the course of a purely personal or household activity” within the meaning of GDPR Article 2(c) or the data had been gathered or processed for the purpose of exercising or defending legal rights.

In the exercise of my case management powers, I must apply the overriding objective in CPR 1.1, including the requirement that the case is dealt with justly and at proportionate cost, ensuring that the parties are on an equal footing, saving expense and applying the principles of proportionality and fairness. Having read Mr Barker’s witness statement dated 19^th June 2020 and listened to the recording de bene esse, I am satisfied that I should exclude them for the following reasons.

Lane End does not take any issue about Mr Haubus’s witness statement dated 19^th June and, although Mr Haubus himself took the opportunity to give evidence in relation to the meeting itself, his evidence was much more limited than Mr Barker’s evidence. I have thus admitted such evidence and taken it into consideration in reaching my overall conclusions.

Was Mr Jensen validly appointed as adjudicator under the Scheme?

On this question, Lane End’s case is simple and straightforward. It no longer contends that the Notice of Adjudication - served at the 20^th March Meeting - was not apt to amount to a notice of adjudication within the meaning of the Scheme. However, Paragraph 2(1) of Part 1 provides for the referring party to submit its request for the appointment of an adjudicator “following the giving of a notice of adjudication”. In view of the fact that Kingstone submitted the Request prior to the 20^th March Meeting, Lane End contends that the request cannot have been served following the giving of notice of adjudication, as statutorily required. Construed together, the Act and the Scheme comprehensively govern the appointment of adjudicators. Lane End thus submits that Mr Jensen cannot have been validly appointed as adjudicator and, if he was not validly appointed as adjudicator, he did not have jurisdiction to make the 27^th April Decision.

On this issue, Ms Cheng QC relied on the judgment of Christopher Clarke J (as he was) in Vision Homes Ltd v Lancsville Construction Ltd [2009] BLR 525 in which the referring party initially submitted notice of its intention to refer the dispute to adjudication before its request for the appointment of an adjudicator but, critically, elected to revise the notice afterwards. Ultimately the revised notice was served no more than 18 minutes after the request. However, this was adjudged to invalidate the appointment. At Paragraph 56 (p538), the judge stated as follows.

“Not without some misgiving I accept that the adjudicator had no jurisdiction to act, as he did, under the second notice of 14 May because that notice was not followed but preceded by a request to the nominating body under 2(1)(b) of the Scheme. It is not possible, in my judgment, to regard the request as continuing so that it may be regarded as made both before and after the second notice. Clauses 2(1) and 3 of the Scheme refer to a request in writing which accompanies (rather than precedes) the relevant notice of adjudication. Further I am persuaded…that if the provisions which establish the jurisdiction of the adjudicator are not complied with it is irrelevant whether or not the other party has suffered prejudice by that non-compliance”.

In answer to Ms Cheng’s submissions on this issue, Mr Anthony Philpott, for Kingstone, contended that Vision Homes should not be followed since the Scheme has subsequently been amended to provide, in Paragraph 1(1) of Part I, that notice of adjudication can be given at any time. However, in my judgment, Mr Philpott’s submissions on this issue are misconceived. Whilst it is correct that, in 2011, the Scheme was amended in this way, the logical basis for the Vision Homes decision is undisturbed. Christopher Clarke J reached his conclusion on the basis that Paragraph 2(1) of the Scheme required the request to be submitted following the notice of adjudication. His conclusion was not based on the interpretation of Paragraph 1(1) as to the time for delivery of the notice of adjudication.

There is nothing to suggest that the amendment to Paragraph 1(1) might somehow have been intended to alter or modify the sequence in which a party could be expected to serve notice of adjudication and submit its request to the adjudicator or nominating body. Had he intended to alter or modify the relevant sequence, the Secretary of State could have been expected to do so in clear terms. He did not do so. Moreover, it remains the case that the request must itself be accompanied by a copy of the notice of adjudication, under Paragraph 3, which is itself consistent with the proposition that the request should not precede the notice itself. The amendment to Paragraph 1(1) aligns the Scheme with Section 108(2)(a) of the 1996 Act which provides for construction contracts to enable a party to give notice at any time of its intention to refer a dispute to adjudication. It was no doubt intended to eliminate uncertainty and ensure there was no limit on the time for service rather than to alter or modify the sequence for delivery of the notice of adjudication and the request for appointment. Consistently with this, Miss Cheng referred me to the analysis in Paragraphs 2.100 to 2.110 of Coulson on Construction Adjudication (4^th edn) and the uncertainty which might otherwise arise in cases, for example, where there are collateral proceedings, the underlying contract has come to an end or there is delay prior to the commencement of the adjudication. In Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25, Lord Briggs observed, at Para 13, that “…Parliament chose to confer the right to adjudicate ‘at any time’, so that it can be and is used to resolve disputes eg about final accounts between parties after practical completion, rather than merely at the interim stage” implicitly endorsing the commentary of Dyson LJ in Connex South Eastern Ltd v MJ Building Services Group plc [2005] 1 WLR 3323 and his conclusion that “the phrase ‘at any time’ means exactly what it says’”.

Mr Philpott submitted that it would give rise to an “absurd anomaly” for the Scheme to require notice of adjudication to precede any request for appointment if this does not replicate the requirements of a “construction contract” in Section 108(2) of the 1996 Act. However, I can see no good reason for the Scheme to mirror the statutory requirements of a construction contract in this way. No doubt, the Act and the Scheme should be construed together. They should also be construed so as to achieve a consistent outcome. However, it is possible to do so without construing Paragraph 2(1) of the Scheme so as to permit requests for appointment to precede delivery of the notice of adjudication. To do so does not, in my judgment, give rise to any anomaly.

Mr Philpott did not submit that the Request might be validated by drawing an analogy with the common law principle that, in computing periods of time, fractions of a day should be discounted, Halsburys Laws of England (5^th edn) (2010) Para 345 nor, indeed, the principle that, where a period is fixed for a person to act, the day of the event from which the period runs should be excluded, Halsburys Laws Para 336 (See also Lewison “the Interpretation of Contracts” (6^th edition 2015 Paras 15.07 and 15.08). No doubt, the latter principle applies to the five-day period for the nominating body to communicate selection of an adjudicator under Part 1, Para 5(1) of the Scheme or the two-day period for an adjudicator to indicate whether he is willing to act under Para 5(3) of the Scheme. However, it is not suggested that this could affect the time at which the Request should be deemed to have been delivered. Paragraph 2(1) of the Scheme is focussed on the sequence rather than the time for delivery of the notice of adjudication and the request for appointment. It is conceivable that, in cases of uncertainty, there might be room for the presumption of regularity but there is no such uncertainty in the present case.

Since Mr Jensen was not appointed under a request that was duly issued under Paragraph 2(1) of the Scheme, I am satisfied that he was not validly appointed as adjudicator and, subject to Kingstone’s submissions based on waiver and estoppel, he did not have jurisdiction to make the 27^th April Decision.

Alternatively, did Mr Jensen cease to have jurisdiction following the Termination Email?

On behalf of Lane End, Ms Cheng submitted that, by transmitting the Termination Email to Messrs Anders and Mason, Mr Jensen resigned and thus vacated office as adjudicator.

Contrary to the suggestions of Mr Jensen in the Termination Email itself, Mr Anders’s automatically generated email did not somehow terminate the adjudication. The questions that arise are whether, the Termination Email was apt to amount to notice of resignation and, if so, whether it operated to terminate the adjudication.

In the Termination Email, Mr Jensen did not purport to resign in express terms; he simply stated that Mr Anders’s email had “effectively” terminated the adjudication. However, it was accompanied by his observation that “you are of course responsible for my fees”. No doubt it was sent in error. Contrary to the impression Mr Jensen had apparently formed, Lane End had not ceased business and, had it done so, that would not have constituted good reason to terminate the adjudication. Moreover, it was sent only to Messrs Anders and Mason, each of whom represented Lane End. It was not sent to anyone on behalf of Kingstone nor, indeed, was it addressed for the attention of anyone on behalf of Kingstone. However, it is to be objectively construed in accordance with the principles in Mannai v Eagle Star [1997] AC 749 by asking how it would appear to a reasonable recipient in the same factual context. I am satisfied, on balance, that it was intended to as notice of resignation and is to be construed as such.

By virtue of Paragraph 9(1) of the Scheme, Mr Jensen was entitled to resign by giving “notice in writing to the parties to the dispute”. However, the Termination Email did not satisfy this provision because it was addressed to and served on only one of the parties to the dispute. In these circumstances, Ms Cheng did not seek to argue that the

I am not persuaded by this analysis. In my judgment, Paragraph 9(1) of the Scheme can be taken to have provided comprehensively for an adjudicator’s method of resignation. If, in any event, an adjudicator can resign by serving notice on one of the parties only, there can have been no obvious reason to provide specifically for an adjudicator to serve notice on each party in Paragraph 9(1) unless this was to take separate advantage of the provision for the service of fresh notices under Paragraph 9(3). However, it is difficult to discern any logic in drawing such a distinction for this limited purpose. Moreover, it is obviously good practice for adjudicators to serve notice of resignation on each party and it is difficult to see why adjudicators should be entitled to resign by serving notice on one of the parties only.

At no point did Mr Jensen serve or purport to serve notice of resignation on Kingstone prior to his email timed at 09:18 to the parties on 16^th April 2020 in which he stated that he had not resigned and would thus continue with adjudication.

I am satisfied the Termination Email did not operate to terminate the adjudication. If, at that stage, Mr Jensen was in office as adjudicator, he remained in office following the Termination Email.

Waiver by election

If the defect in Mr Jensen’s appointment was only procedural, it was open to Lane End to waive the defect by election, Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850. In considering whether it did so, the following questions arise.

A person waives, by election, its right to assert a substantive right by acting inconsistently with the right when presented with a choice. In Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, the House of Lords were satisfied that this principle is capable of applying to statutory procedural requirements if imposed solely for the protection or benefit of one party (for example, the time limits to be observed by a tenant applying for a new business tenancy). At 883 A-C, Lord Diplock observed that this type of waiver “…arises in a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is consistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be the legal consequence of what he did. He is sometimes said to have ‘waived’ the alternative rights, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition; but this is better categorised as ‘election’ rather than as ‘waiver’”.

To successfully invoke this principle, Kingstone must thus show that the issue in relation to Mr Jensen’s appointment was the function of a defect which furnished Lane End with a relevant choice.

Ms Cheng submitted that, in the present case, there is no room for this principle because the defect arises from Kingstone’s decision to request nomination of an adjudicator before serving notice of adjudication on Lane End and that, since the whole process of adjudication cannot start until notice of adjudication has been served, any step taken before service of the notice is a nullity. In support of this proposition, Ms Cheng relied on the commentary in Para 4.35 of Coulson on Construction Adjudication (4^th edn) Para 4.35 (“Paragraph 2(1) makes plain that the first thing that must happen is the giving of the notice of adjudication. Only after that does the procedure involving the nominating body come into play”), Ecovision Systems Ltd v Vinci Construction UK Ltd [2015] EWHC 587 (HHJ Havelock-Allen QC, at Para 92: “any step taken before issue of the Notice of Adjudication is a step taken before proceedings have been commenced and for that reason is a nullity”), Primus Build Ltd v Pompey Centre Ltd [2009] EWHC 1487 (TCC) (Coulson J, at Para 15, “…because an Adjudicator derives his jurisdiction from the Notice of Adjudication, if it is provided that the Notice had not been validly served, it will generally operate to deprive the Adjudicator of any jurisdiction”) and IDE Contracting Ltd v RG Cambridge Ltd [2004] EWHC 336 (TCC) (HHJ Havery QC) in which it was adjudged the adjudicator lacked jurisdiction because steps had been taken to obtain his nomination before service of the notice of adjudication. There can be no reason to doubt the commentary or authorities upon which Ms Cheng relies and their logic is clear.

In the present case, the Request preceded the Notice of Adjudication. For that reason, any appointment under the Request could not take effect as an appointment in the adjudication. Since Mr Jensen was appointed pursuant only to the Request, his appointment was void. Since it was not made pursuant to a statutory notice of adjudication, the RICS nomination was not capable of conferring on him jurisdiction.

On this basis, I am satisfied Lane End was not presented with a relevant choice. There could be no adjudication until the Notice of Adjudication was served. Until then, no opportunity could have arisen for Lane End to choose between two alternative courses of action. Once the Notice of Adjudication was served, Kingstone regarded Mr Jensen as adjudicator but he was not appointed as such nor, indeed, was there any purported appointment in the adjudication. This is not a case in which he was appointed as adjudicator but there was a defect in the process of appointment and adjudication. He was not appointed to act in the adjudication at all.

It follows that Lane End was not presented with a choice under which it was furnished with the opportunity to cede a right. The relevant defect arises from Paragraphs 1(1) and 2(1) of the Scheme under which a party to a construction contract is afforded the right to serve notice of adjudication and request the appointment of an adjudicator. There is an obvious logic in providing for the referring party to serve notice of adjudication prior to the request for appointment. No doubt, this also provides a measure of protection to the responding party. However, it would be unduly simplistic to characterise these provisions – in the manner identified by the House of Lords in Kammins v Zenith (supra) – as procedural requirements imposed solely for the protection or benefit of the responding party.

I am thus satisfied that the defect in Mr Jensen’s appointment was not procedural only and, in any event, it did not present Lane End with the opportunity to make a relevant election. The relevant defect was not and is not susceptible to waiver by election. Although sub-questions (b) and (c) no longer arise, I shall consider them on a hypothetical basis.

No person can meaningfully make an election if unaware of his opportunity to do so. It requires knowledge of all the facts giving rise to the relevant right and of the right of election itself, Peyman v Lanjani [1985] Ch 457.

In Stevens & Cutting v Anderson [1990] 1 EGLR 95, the Court of Appeal applied these principles to a tenant’s application for a new business tenancy under Part II of the Landlord and Tenant Act 1954, issued less than two months after its requests for a new tenancy contrary to the requirements of the statutory regime which then applied. The landlord knew nothing of this nor, indeed, of his right to rely on it. However, he engaged a solicitor whose knowledge could reasonably have been imputed to him. His solicitor was aware of the relevant dates and thus had knowledge of the facts giving rise to his client’s relevant rights but gave evidence that he did not know, at any relevant time, of his client’s right of election. On this basis, the Court of Appeal concluded that the landlord did not have sufficient knowledge to make an election and had not waived his right to rely on the irregularity.

Had the putative defect been capable of waiver, I am satisfied Lane End did not have sufficient knowledge to make an election at any time prior to the Adjudicator’s decision. It did not know of all the facts giving rise to its right to make an election nor, indeed, did it know of the right itself.

Lane End cannot have elected to waive the defect because it did not have sufficient knowledge to do so. The issue is thus whether it lost its right of election prior to the delivery of the adjudicator’s decision by participating in the adjudication without doing enough to reserve its rights.

It is apparent from the judgments of the Court of Appeal in Peyman v Lanjani (supra) that, regardless of knowledge, a party loses its right of election if it fails to exercise a right and, in consequence, the other party is “adversely affected”, 491C (Stephenson LJ).

In the case of adjudications under the 1996 Act and the Scheme, special considerations come into play. In Bresco Electrical Services Ltd v Lonsdale [2019] EWCA Civ 27, Coulson

On this basis, a party will generally be taken to have waived any jurisdictional objection and thus lose its right of election if it participates in the adjudication without reserving its position in clear and appropriate terms. To do so effectively, it will generally be expected to reserve its rights in terms tailored, no doubt, to the jurisdictional challenge. In the absence of good reason, a general reservation will be ineffective if the nature of the jurisdictional challenge is not identified.

In the present case, Lane End challenged Mr Jensen’s appointment at an early stage. By his email timed at 17:44 on 24^th March 2020, Mr Mason advised Mr Jensen that his firm had been instructed to act on behalf of Lane End and that, they “reserve[d] the position of our client as to your jurisdiction until such time that we have taken further instructions and interrogated the Referral”. At this point he did not specify any ground

This was followed by an email timed at 09:08 on 25^th March 2020 from Mr Mason to Messrs Jensen and Barker “reserv[ing] our clients position as to your jurisdiction”. It was then observed that the Notice of Adjudication was labelled a “Notice of Referral” and did “…not express any intention to refer a dispute to adjudication”. Later in the email, Mr Mason took the point, more generally, that “…any decision would be unenforceable due to the procedural irregularities which undermine the Adjudicator’s threshold jurisdiction”. Mr Jensen resolved in favour of Kingstone Mr Mason’s argument about the “Notice of Referral” on the basis that it amounted to a Notice of Adjudication within the meaning of the Scheme. He did so by email timed at 13:59 on 25^th March 2020.

By an email timed at 15:04 on 25^th March 2020 to Messrs Jensen and Barker, Mr Mason again reserved Lane End’s “position…as to the Adjudicator’s jurisdiction”, stating that the Notice of Adjudication “…does not express any intention to refer a dispute to adjudication as required by the scheme and as such is not a ‘Notice of Adjudication’”. Later in the email, Mr Mason insisted that he was not taking “an interpretation point at all but a procedural fact based failure point”.

Following Mr Jensen’s email timed at 09:18 on 16^th April in which Mr Jensen confirmed that he had not resigned and thus intended to continue the adjudication, Mr Mason emailed him shortly afterwards, at 09:53, to advise Mr Jensen, again, that Lane End “reserves its position as to your jurisdiction”. Later that morning, Mr Jensen emailed revised directions to Mr Mason and, upon receipt, he advised Mr Jensen that the revised directions were agreed. In doing so, Mr Mason did not purport to reserve Lane End’s position. Nevertheless, when, on 23^rd April 2020, he forwarded to Mr Jensen a copy of Lane End’s Rejoinder, he confirmed, again, that Lane End “reserve[d] its position as to the jurisdiction of the Adjudicator”. Moreover, he continued to reserve Lane End’s position on jurisdiction in correspondence with the Adjudicator following the 27^th April Decision.

It can thus be seen that Mr Mason repeatedly sought to reserve Lane End’s rights in his correspondence with the Adjudicator and Kingstone. He did not reserve Lane End’s right to take specific jurisdictional objections; he simply reserved Lane End’s position about the Adjudicator’s jurisdiction. However, it was apparent from the correspondence that he was seeking to preserve its right to challenge Mr Jensen’s “threshold jurisdiction”. In broad terms, this was on the basis that, since he had not been appointed under a valid statutory notice of adjudication, he had not been appointed under the Scheme. However, at this stage, Mr Mason’s argument was that the Notice of Adjudication was not apt, on its true construction, to amount to notice of adjudication within the meaning of the Scheme. Ms Cheng wisely chose not to pursue this argument at the hearing before me.

On the hypothesis that the defect in Mr Jensen’s appointment was susceptible of waiver, I have reached the conclusion, on balance, that Mr Mason successfully reserved Lane End’s right to challenge Mr Jensen’s appointment. The reservations in Mr Mason’s emails of 25^th March were not expressly limited to a specific jurisdictional objection. However, the emails contained jurisdictional objections and it was implicit that the reservations were based on these objections in the sense envisaged by Coulson LJ in Bresco (supra). The conceptual basis for the objections was that Mr Jensen had not been appointed under a valid statutory notice of adjudication. Whilst Lane End has not pursued the main argument it initially advanced in support of the objections, it has successfully deployed in these proceedings an argument based on the sequence of the Request and the Notice of Adjudication. In my judgment, this falls within the scope of the reservation since it furnishes Lane End with a challenge on the ground that Mr Jensen was not appointed under a statutory notice of adjudication.

If it remains necessary to apply the test suggested in Stephenson LJ in Peyman v Lanjain (supra) and ask whether Kingstone has been “adversely affected” by Lane End’s conduct, in particular the steps it has taken participating in the process of adjudication, I am satisfied it hasn’t been. Lane End successfully reserved its rights to participate without conceding the relevant jurisdictional objection. Moreover, there is no convincing evidence that, had Lane End taken a different stance, Kingstone would have changed position.

Estoppel

In his written submissions dated 10^th July 2020, Mr Philpott contended that Lane End was estopped from challenging the adjudicator’s jurisdiction. He relied on four alternative species of estoppel, namely promissory estoppel, estoppel by acquiescence, estoppel by representation and estoppel by convention. Each of these have distinct historical origins and operate according to different principles. Promissory estoppel, estoppel by acquiescence and estoppel by representation share features which are not present in estoppel by convention. In broad terms, they can be invoked where a party acts to its detriment in reliance upon a belief or understanding created or encouraged by the other. By contrast, estoppel by convention is based on a common belief or assumption and is capable of furnishing the parties with an independent cause of action, regardless of whether it relates to an interest in land.

Although this part of Kingstone’s case was presented with ingenuity, in my judgment it is without foundation.

In support of his case based on promissory estoppel, Mr Philpott submitted, in Para 41, that “Mr Mason made a clear and unequivocal representation that Lane End would not challenge the Adjudicator’s jurisdiction other than for the challenges they made in the adjudication…” No doubt this could qualify as a representation in the nature of a promise or assurance. However, contrary to Mr Philpott’s submission, Lane End’s challenge before the Adjudicator was essentially on the basis he had not been properly appointed under the Scheme, a challenge renewed before me. In support of its case before the adjudicator, Mr Mason deployed unpersuasive arguments. However, he did not say or do anything to suggest Lane End would seek to limit itself to these particular arguments in its challenge to the Adjudicator’s jurisdiction nor did anyone, on behalf of Lane End, make promises or assurances to submit to the Adjudicator’s jurisdiction in the future.

Mr Philpott also submitted that Mr Mason acquiesced “…in the conduct of the Adjudication and in not making the challenges that Lane End now makes he is estopped by acquiescence by his silence in respect of these particular specific challenges to jurisdiction that Lane End now makes” (Para 33). Estoppel by acquiescence arises most commonly under the doctrine of proprietary estoppel. However, mere silence is insufficient. To establish such a case, it would be necessary to show that Lane End is culpable for knowingly taking advantage of a mistake on the part of Kingstone, through its officers or employees. Knowledge of Kingstone’s mistaken belief about Lane End’s inconsistent right is essential, Kammins v Zenith (see above) 884-885. Kingstone’s case appears to be founded on the basis it mistakenly believed Lane End would, in future, limit itself to specific arguments rather than upon a mistaken belief about Lane End’s rights. It is doubtful whether this would, in itself, be capable of furnishing Kingstone with a sound case. More significantly, however, there is no substantial evidence that Kingstone was mistaken in this way or, indeed, that Lane End was aware of Kingstone’s mistaken belief. This is fatal to a case based on estoppel by acquiescence.

In relying on estoppel by representation, Mr Philpott submitted that “the actions of Lane End can be objectively characterised as an unequivocal representation that it was waiving the right to challenge the Adjudicator’s jurisdiction on this and all grounds of objection that they now seek to raise retrospectively” (Para 29). In substance, this is more in the nature of a promise than a representation of fact or mixed fact and law. It is also difficult to see how Lane End’s conduct could be said to amount to a clear and unequivocal representation. However, I am not satisfied it is possible to infer from Lane

In Para 24, Mr Philpott submitted that Lane End is “…estopped by convention…from now challenging the Adjudicator’s jurisdiction on new grounds not raised in the adjudication”. He did not identify the parties’ shared assumption of fact or law. It is presumably a shared assumption that Lane End was not entitled to challenge the Adjudicator’s jurisdiction otherwise than by relying on the arguments specifically advanced in correspondence at some point in time in the past. However, in my judgment no evidential basis for such an assumption is disclosed in the evidence.

In the hypothetical event that Kingstone could identify a promise, representation or mistaken belief with which to advance a case based on promissory estoppel or estoppel by representation or acquiescence, it would remain necessary for Kingstone to show that it acted to its detriment in reliance upon it. In my judgment, there is no evidence on which I can reasonably reach such a conclusion. Kingstone has at all times resisted Lane End’s jurisdictional challenge and continued to do so, regardless of the arguments Lane End deployed in support of the challenge. At the hearing before me, it has continued to argue that Mr Jensen acted with statutory jurisdiction regardless of its estoppel arguments. If, indeed, it is Kingstone’s case that, had it not been for the putative promise, representation or mistaken belief, it would have conceded its case and accepted Lane End’s jurisdictional challenge, this is inherently unlikely. It is thus unnecessary for me to consider whether, in substance, Kingstone is relying on these forms of estoppel defensively.

Estoppel by convention operates according to different principles. If Kingstone’s case is based on a shared assumption that Lane End was limited to the arguments specifically advanced in correspondence, no doubt it would need to establish that, had it not been for this assumption, Kingstone would have acted differently. Again, I am not satisfied it would have done so. On this somewhat unrealistic hypothesis, I am not satisfied that Kingstone would have acted differently, in a material way, had it known that Lane End might advance revised or additional arguments in support of its case on jurisdiction.

For these reasons, Kingstone’s case based on estoppel fails.

Different dispute

Lane End presented an alternative case based on the proposition that the Adjudicator ultimately purported to determine a different dispute to the one referred to him in the Notice of Adjudication. At the hearing before me, Mr Philpott submitted that he had been taken by surprise in view of the fact that, although the evidential basis for Lane End’s alternative case could be discerned from the witness statement and exhibits, it formed no part of the case set out in Lane End’s Part 8 Claim Form. Moreover, the issue was not fully canvassed in the parties’ initial written submissions. At the end of the hearing, I thus permitted the parties to file written submissions on this issue in addition to the issue arising from the covert recording of the 20^th March Meeting.

Ultimately, Kingstone delivered additional written submissions dated 10^th, 20^th and 24^th July and Lane End delivered additional written submissions dated 21^st July 2020. By letter dated 27^th July 2020, Lane End’s solicitors contended that, since I had not provided for Kingstone to file the additional written submissions dated 20^th and 24^th July, I should not consider these submissions without first providing Lane End with an opportunity to respond. In view of my above conclusions, the “different dispute” issue is now entirely hypothetical. In these circumstances and, to avoid further un-necessary argument, I shall not consider this issue further. I shall not rule on the hypothetical question of whether, had the Adjudicator been validly appointed, his determination could have been successfully challenged on the basis it was directed to a different dispute from the one referred to him in the Notice of Adjudication. Subject to this, I have taken into consideration each of Mr Philpott’s additional written submissions.

Disposal

I shall thus give judgment for Lane End on its Part 8 Claim and I shall dismiss Kingstone’s application for summary judgment on its Part 7 Claim. I am minded also to give judgment for Lane End on the Part 7 Claim. However, I shall hear further from counsel in relation to the form of the order and all consequential matters, including costs.