Paice appointed Harding for the construction and fit out of two houses. A dispute arose and the contract was terminated. The first two adjudications were in respect of Harding’s interim application. The awards for both adjudications were in Harding’s favour and Paice was ordered to pay Harding in respect of interim payments. Neither of the sums in adjudication 1 and 2 was paid in accordance with those decisions and enforcement proceedings were required.

Paice, on a number of occasions, telephoned the office of the adjudicator who had dealt with the first two adjudications and spoke to the office manager for over an hour. The second conversation led to Paice’s appointment of a particular claims consultant. The office manager informed the adjudicator about the call. It was the claims consultant who rejected Harding’s final account claim in its entirety. Following rejection of his final account claim, Harding started adjudication 3 and it was decided that Paice had to pay the full amount of the final account because they had failed to serve a pay less notice on time.

Two months later Paice started adjudication 4, seeking a decision as to the true value of the contract works and seeking repayment from Harding. The adjudicator confirmed to Harding that he had no contact with Paice save in respect of the first two adjudications and made no mention of the telephone conversations. Harding sought an injunction to restrain adjudication 4 but was unsuccessful. Adjudication 4 proceeded and it was decided that Harding was liable to pay Paice the sum of £325,484 plus the adjudicator’s fees of £15,487.50.

In subsequent enforcement proceedings issued by Paice, in finding that the telephone call gave rise to a possibility of bias, the court held that the adjudicator should have disclosed the telephone call, but had chosen not to. That choice not to disclose made the possibility of bias on the part of the adjudicator more likely, and a fair-minded observer would conclude that there was bias. Coulson J further held that it was the content, not the timing, of the telephone call that was relevant, and that despite knowing of the telephone call when the fourth adjudication took place, the MJ Harding had not waived its right to argue bias, as it did not know the details which gave rise to natural justice.