John Roberts Architects Limited -v- Parkcare Homes (No. 2) Limited
Case reference:
[2006] EWCA Civ 64
Thursday, 9 February 2006
Key terms: Adjudication - Costs - Jurisdiction - Conditions of Engagement for appointment of an architect
This was an appeal from Part 8 proceedings in the TCC Court where HHJ Richard Harvey QC, had found for the Referring Party and refused to enforce the award of the Adjudicator.
A dispute arose as to whether or not a contract for adjudication between the Claimants, John Rogers Architects Ltd, and their developers, Parkcare Homes (No.2) Ltd, enabled the Adjudicator to direct Parkcare to pay the legal costs of John Roberts where Parkcare had withdrawn from the adjudication before a decision was reached, but not before both parties had filed their pleadings.
The parties entered into a construction contract that incorporated the Construction Industry Council’s Model Adjudication Procedure, Third Edition, with an amendment in relation to Clause 29 of the Model Procedure. The parties had also incorporated the Royal Institute of British Architects’ Conditions of Engagement for the appointment of an architect. Clause 9.2 of the RIBA Conditions replaced Clause 29 of the Model procedure. This clause provided “The Adjudicator may in his discretion direct the payment of legal costs and expenses of one party by another as part of his decision”.
Parkcare withdrew from the adjudication prior to the Adjudicator providing his substantive decision. Parkcare paid the Adjudicator’s costs but it did not think it was liable to pay the costs of John Roberts as it believed the Adjudicator had no power to make such a direction.
Parkcare said the Adjudicator could only direct payment of legal costs as part of his decision and did not allow the Adjudicator to direct for legal costs outside of his substantive decision. As there was no substantive decision in this case there could be no costs awarded.
The Court held that the Adjudicator could direct the payment of legal costs at his discretion and that as part of his decision meant no more than as part of what he may decide. It did not make commercial sense that a party could abandon its claim at the eleventh hour with no cost consequences. There was no sensible reason for the parties to have agreed such a provision.
A dispute arose as to whether or not a contract for adjudication between the Claimants, John Rogers Architects Ltd, and their developers, Parkcare Homes (No.2) Ltd, enabled the Adjudicator to direct Parkcare to pay the legal costs of John Roberts where Parkcare had withdrawn from the adjudication before a decision was reached, but not before both parties had filed their pleadings.
The parties entered into a construction contract that incorporated the Construction Industry Council’s Model Adjudication Procedure, Third Edition, with an amendment in relation to Clause 29 of the Model Procedure. The parties had also incorporated the Royal Institute of British Architects’ Conditions of Engagement for the appointment of an architect. Clause 9.2 of the RIBA Conditions replaced Clause 29 of the Model procedure. This clause provided “The Adjudicator may in his discretion direct the payment of legal costs and expenses of one party by another as part of his decision”.
Parkcare withdrew from the adjudication prior to the Adjudicator providing his substantive decision. Parkcare paid the Adjudicator’s costs but it did not think it was liable to pay the costs of John Roberts as it believed the Adjudicator had no power to make such a direction.
Parkcare said the Adjudicator could only direct payment of legal costs as part of his decision and did not allow the Adjudicator to direct for legal costs outside of his substantive decision. As there was no substantive decision in this case there could be no costs awarded.
The Court held that the Adjudicator could direct the payment of legal costs at his discretion and that as part of his decision meant no more than as part of what he may decide. It did not make commercial sense that a party could abandon its claim at the eleventh hour with no cost consequences. There was no sensible reason for the parties to have agreed such a provision.