The Laundry Building Limited (“TLB”) engaged Etcetera Construction Services Limited (“Etc”) in December 2011 to carry out building work at an old laundry building in Hackney, London. Subsequent to Etc’s issuing of its final account, a dispute arose between TLB and Etc in relation to payments. TLB maintained that it had cross claims (for, amongst other things, liquidated damages, defects, outstanding works, and contra charges), and considered that substantially less was payable to Etc.

In June 2013, Etc commenced adjudication proceedings against TLB. Etc had valued the Contract Works at £1,223,749.53, but had been paid the net sum of £936,000. Its claim therefore was for the sum of £287,749.53 plus VAT. Mr Gary Kitt of EC Harris LLP was appointed as the adjudicator, and the parties entered into a tripartite agreement under which Etc and TLB agreed to be jointly and severally liable for the adjudicator’s fees and expenses. In the proceedings, Etc sought to reserve certain items contained within its final account from being opened up, on the ground that it did not wish to challenge the values which the Contract Administrator had already agreed for those items.

The adjudicator issued his decision in August 2013, valuing Etc’s final account at £1,014,407 less a number of items (including £11,200 for liquidated damages) and ordering Etc to pay his fees and expenses of £11,800 plus VAT. Etc, however, refused to do.

The adjudicator subsequently commenced court proceedings – against TLB, and not Etc – in order to recover his fees. TLB’s response was to bring a Part 20 claim against Etc, who in turn defended the claim on the ground that the adjudicator had exceeded his jurisdiction and/or breached the rules of natural justice. The adjudicator argued that there was no breach of natural justice or jurisdictional issue, by virtue of the fact that he had, at an early stage in the proceedings, given notice about the approach he was taking with regards valuation of the final account, and that Etc had therefore had “the clearest opportunity to put in any evidence or argument which it wished on any item in the final account”.

Akenhead J ordered TLB to pay the adjudicator's fees, and ordered Etc as the Part 20 Defendant to reimburse TLB for the full amount. The adjudicator had been “absolutely open with both parties” and had not therefore breached the rules of natural justice. When deciding whether the adjudicator had jurisdiction, Akenhead J held that a referring party cannot seek to "circumscribe and delineate the dispute" in a notice of adjudication so as to exclude particular defences, as to do so would be "illogical and untenable, if not ludicrous". Further, and by virtue of the tripartite agreement in place between the parties, the adjudicator had been entitled to sue either TLB or Etc in order to recover his fees.