By way of background, Mr Cleaver and Ms Osmolska (the “Defendants”), contracted with Corebuild Ltd (the “Claimant”) to redesign and refurbish a residential property. The Contract was in the form of JCT Intermediate Form with Contractor’s Design 2016. The Employers, through the Contract Administrator, wrote to the Claimant and advised that they had breached the Contract by failing to proceed regularly and diligently with the works under clause 8.4.2 of the Contract. The Administrator also advised that the contract could be lawfully terminated within 14 days from the date of then notification letter providing the Claimants do not remedy the breach.  The Defendants, relying on the Contract Administrator’s view that the situation had not improved, served a notice purporting to terminate the Contract. 

The Claimant referred the matter to the adjudication in September 2018 and the adjudicator decided that the Defendants, had wrongfully terminated the contract resulting in a repudiatory breach. Subsequently, the Claimant was awarded £80,023.82. 

The Defendants refused to make the payment and the Claimant commenced proceedings and applied for a summary judgment to enforce the decision. The Defendants sought to resist summary judgment on the following grounds:

1. the Adjudicator answered the wrong question in relation to contractual termination, with the result that he failed to address the Defendant's actual case;
2. the Adjudicator then had no regard at all to any of the evidence going to the progress of the works;
3. the Adjudicator rejected the Defendants' submission as to whether wrongful termination was repudiatory on the basis of a point which was unargued and which the Defendants had no opportunity to address;
4. the Adjudicator proceeded to determine an extremely complicated quantum case notwithstanding the huge amount of new material required to be dealt with, so that the Adjudicator was considering a dispute which had not crystallised and/or one which the Defendants did not have a fair opportunity to deal with.

The judge held that this was a clear breach of natural justice, falling within the principles of Cantillon Ltd v Urvasco Ltd.  Giving consideration of the arguments that had been put forward, the Court agreed with the Defendants that there had been a breach of natural justice because the adjudicator had determined the question of repudiation on a completely different basis.  The adjudicator decided the outcome of the adjudication on a basis that had not been argued by the Claimant.  

The judge highlighted that it is well established that an adjudicator can make an error when answering a question put to him and that such mistake will not affect the enforcement of his decision. However, he made a distinction between this well-established principle and the case in which the adjudicator “takes an erroneously restrictive view of his own jurisdiction, with the result that he decides not to consider an important element of the dispute that has been referred to him, this failure may be regarded as a breach of natural justice”. 

This case highlights that to successfully argue that a breach of natural justice has occurred, the breach must be material.  Although rare, it demonstrates that enforcement of an adjudicator’s decision can be resisted upon such grounds.