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Court Rules on Nursing Home Development Squabble

In resolving a building dispute, the High Court has emphasised that Parliament has laid down a ‘relatively summary process’ for resolving contractual issues in such cases and that, in deciding the ambit of an adjudicator’s jurisdiction, the parties ‘should not have to engage in contorted mental gymnastics’.

Regency buildingAn adjudicator had been appointed to rule on a dispute between the developers of a nursing home and builders who had been engaged on the project. The latter claimed to be owed almost £400,000 on completion of the job but the developers insisted that they were only obliged to pay around £75,000, justifying deductions by reference to alleged defects in the work and culpable delays.

The adjudicator ruled in favour of the builders. However, in a wide-ranging attack on his decision, the developers raised a number of issues concerning his jurisdiction and argued that there had been a breach of natural justice in that the adjudicator’s terms of reference had been too narrowly drafted.

In dismissing those arguments, the Court found that, by their conduct during the adjudication process, the developers had waived any right to mount a jurisdictional challenge. The adjudicator had ‘behaved absolutely properly’ in inviting the parties to make further submissions on one issue on which he felt that he had not been fully addressed and it could not be said that he had ‘gone off on a frolic of his own’.

Submissions that the developers had been unfairly shut out from producing evidence in support of their case were rejected. There had been no material breach of natural justice and there was ‘no good reason’ in the circumstances why the adjudicator’s decision should not be enforced.