Klin engaged Barr to design and construct a number of flats. Barr commenced three adjudications against Klin, each with a different adjudicator. In the first adjudication, Barr requested a declaration that Klin had failed to serve either a payment notice or a withholding notice and claimed monies owing under Interim Application 22. Klin argued that it had served both in the form of a combined payment notice and withholding notice within the specified time, and that no money was due. The adjudicator found in Klin’s favour but did not assess Klin’s entitlement to withhold sums.

Barr commenced a second adjudication in relation to Interim Application 22 identifying the dispute as whether or not Klin was entitled to withhold/pursue LADs. The adjudicator agreed with Barr’s argument and that the LADs provision was “unworkable and void and unenforceable”. The adjudicator considered she did not have jurisdiction to consider the amount due in relation to Interim Application 22 as the amount payable had already been decided in the first adjudication.

The third adjudication concerned Interim Application 23. It was submitted after the Employer’s Final Account and Final Statement had been issued. Klin, having written to Barr disputing Barr’s right to submit an application at this stage, nevertheless and without prejudice to that position issued a payment notice for £375,600. Klin then issued a withholding notice in respect of the same amount on the basis that since the second adjudication determined that the LADs provision was not enforceable, Klin was able to claim for the actual loss suffered it suffered as a result of Barr’s late completion of the works.

Barr commenced an adjudication on the basis that £375,600, by Klin’s own admission, was due to Barr and that any actual loss Klin claimed to have suffered, if there were any loss, would be suffered by parties other than Klin who could not sue Barr.

Klin responded stating that the £375,600 had been the subject of the second adjudication which decided Barr was not entitled to recover the money. Klin argued that issuing a new Interim Application in relation to this money did not avoid the problem. The adjudicator rejected this jurisdictional challenge. Klin also argued that it was permissible for it to recover the money for other parties (in this case, a company wholly owned by Klin), even if it had suffered no direct loss itself.

The adjudicator found that: (1) the withholding notice lacked the clarity required to give Barr notice of the reasons why it was withholding payment; (2) no causative link between the breaches and loss suffered had been made apparent to Barr; and (3) the withholding notice did not state the loss was not suffered by Klin but by others; and it did not state how Klin could claim any losses on behalf another. The £375,600 was therefore due to Barr.

Barr sought enforcement of the adjudicator’s decision.

The Judge found:

1. The adjudicator did not lack jurisdiction to deal with any part of the dispute on the basis that this adjudication was the same or substantially the same as the previous adjudication. The third adjudication was the first time in which the issue of a £375,600 payment was referred. The first adjudication was only concerned with whether the payment notice/withholding notice had been served in time. The second adjudication was concerned only with the legal question of the validity of the LADs provision. A favourable outcome to Barr in this adjudication would unlock the opportunity to claim payment in respect of this sum, which was an issue that was not put to, nor decided by the adjudicator.
2. Contrary to Klin’s submission, the adjudicator did have jurisdiction to decide the matter on the basis on which he did. The dispute related to Barr’s claim for the sum that had been withheld under the withholding notice and either side could advance arguments as to whether or not the sum should be withheld. The Judge agreed with the adjudicator that Barr’s submissions regarding the sufficiency or validity of the withholding notice amounted to such arguments, not arguing a new dispute.
3. There was nothing to suggest the adjudicator was biased. Klin argued that the adjudicator’s decision had been reached via a series of assumptions as to Barr’s lack of knowledge about the basis on which the withholding notice was made and/or its state of mind when it received the notice. Klin suggested that in making the assumptions that it did, the adjudicator was not deciding the issue on the arguments put before him; this gave the appearance of assisting Barr with its arguments and was prejudicial towards Klin.
   The Judge stated that the adjudicator was construing the withholding notice according to its terms and against the background of the knowledge that Barr had, and that any fair-minded observer would not be able to conclude that there was a real possibility that he was biased.
4. The adjudicator did not act in breach of natural justice by not putting his proposed findings of fact to the parties before giving his decision. An adjudicator is not obliged to do so and is often not practicable to do so. Provided his factual conclusions are based upon the material put before him he cannot be expected to submit his findings for further comment before issuing his final decision. The adjudicator should only give the parties opportunity to comment in cases where he was taking into account something within his own knowledge, of which the parties are not aware.