Cynthia Jacques and Elise Jacques Grombach (trading as C&E Jacques Partnership) v Ensign Contractors Limited
Case reference:
[2009] EWHC 3383 (TCC)
Tuesday, 22 December 2009
Key terms: Natural justice – Prior adjudication - Inadmissible evidence – Stay of execution - Jurisdiction
Jacques were two sisters who engaged Ensign to renovate a residential apartment block for investment purposes. The adjudication in question involved the value of the works performed by Ensign. Jacques asserted the value was significantly lower than that paid, and accordingly they were owed £187,076.23. There were substantial outstanding defects that had not been rectified by Ensign. Ensign considered it was still owed £98,786.73 and submitted that the adjudicator should take Ensign’s submissions in, and the decision from, a previous adjudication into account.
Without inviting a submission from Ensign, after a request by Jacques, the adjudicator confirmed he would ignore the documents from the previous adjudication. The adjudicator awarded Jacques £96,868.18 plus VAT.
Ensign did not pay the sum and, at the enforcement hearing, submitted that:
1 The adjudicator breached the rules of natural justice by not considering its submissions or the decision from the previous adjudication. By implication, the adjudicator could not have considered all Ensign’s defences, referred to by reference to the earlier submissions; and
2 The poor financial position of Jacques meant that enforcement should be stayed.
The Judge concluded that:
“(a) The Adjudicator must consider defences properly put forward by a defending party in adjudication.
(b) However, it is within an adjudicator's jurisdiction to decide what evidence is admissible and, indeed, what evidence is helpful and unhelpful in the determination of the dispute or disputes referred to that adjudicator. If, within jurisdiction, the adjudicator decides that certain evidence is inadmissible, that will rarely (if ever) amount to a breach of the rules of natural justice. …
(c) Even if the adjudicator's decision (within jurisdiction) to disregard evidence as inadmissible or of little or no weight was wrong in fact or in law, that decision is not in consequence impugnable as a breach of the rules of natural justice.
(d) One will need in most and possibly all "natural justice" cases to distinguish between a failure by an adjudicator in the decision to consider and address a substantive (factual or legal) defence and an actual or apparent failure or omission to address all aspects of the evidence which go to support that defence.”
Here the Judge was satisfied that the adjudicator did not fail to apply the rules of natural justice. For example, although the adjudicator had said he was going to disregard the earlier decision, Ensign still had what was termed as the “fullest opportunity” to submit any further evidence he wished to in light of that ruling. Looking at the adjudication as a whole it was also clear that on every material point in issue in relation to the final account, Ensign not only had the opportunity, but took that opportunity, to submit evidence and argument. Indeed, the adjudicator had reduced Jacques’ claim by some 70%. Accordingly the decision was enforced.
However, a stay of execution of £60,000 of the judgment sum was ordered with the remainder payable by Ensign. Jacques had asserted that they could not afford to pay for the remedial works. They subsequently stated that they could not pay the adjudicator’s fees as they had not received the amount of the award from Ensign. This lead to the conclusion that they would not be able to repay the judgment sum or a significant part of it.