Specialist Ceiling Services Northern Limited v ZVI Construction UK Limited
Friday, 27 February 2004
Key terms: Enforcement - summary judgment - without prejudice immaterial - natural justice - bias
Specialist Ceiling Services Northern Limited obtained an adjudicator’s decision against ZVI Construction UK Limited. In this application Specialist sought enforcement of a summary judgment of that decision against the Defendant ZVI.
ZVI’s challenge to the enforcement was on the basis that without prejudice material had been submitted to the adjudicator during the course of the adjudication and so the Adjudicator should have resigned. As he did not resign the adjudication was unfair and should not be enforced.
The referral included a without prejudice offer to settle from ZVI that had been rejected by Specialist. ZVI had also allowed a without prejudice extension of time in respect of part of the delay. Any adjudicator’s decision recognised that it was well established that the parties in dispute often discussed matters on a without prejudice basis. He did not believe that the knowledge of the without prejudice offer affected his impartiality and went on to make a decision in Specialist’s favour.
HHJ Grenfell considered the recent Court of Appeal decision in Re Medicaments and related classes of goods (No 2) [2001] 1 WLR 700, together with the well known authority of R v Gough [1993] AC 646. He concluded that the test was that the court must first ascertain all the circumstances which might have a bearing on the suggestion that the judge or adjudicator was biased. The Court must then ask whether in those circumstances a fair minded and informed observer would conclude that there was a real possibility of a real danger that the judge or adjudicator was biased. It was accepted in Disclaim Project Services Limited v Opec Prime Developments Limited [2001] BLR 285 that the rules of natural justice applied within the limitations imposed by parliament to adjudication. HHJ Grenfell concluded that the Adjudicator’s approach indicated no apparent bias and he had properly brushed aside the without prejudice material and ignored it when reaching his decision. He concluded that the defence had no real prospect of success and therefore enforced the decision.
ZVI’s challenge to the enforcement was on the basis that without prejudice material had been submitted to the adjudicator during the course of the adjudication and so the Adjudicator should have resigned. As he did not resign the adjudication was unfair and should not be enforced.
The referral included a without prejudice offer to settle from ZVI that had been rejected by Specialist. ZVI had also allowed a without prejudice extension of time in respect of part of the delay. Any adjudicator’s decision recognised that it was well established that the parties in dispute often discussed matters on a without prejudice basis. He did not believe that the knowledge of the without prejudice offer affected his impartiality and went on to make a decision in Specialist’s favour.
HHJ Grenfell considered the recent Court of Appeal decision in Re Medicaments and related classes of goods (No 2) [2001] 1 WLR 700, together with the well known authority of R v Gough [1993] AC 646. He concluded that the test was that the court must first ascertain all the circumstances which might have a bearing on the suggestion that the judge or adjudicator was biased. The Court must then ask whether in those circumstances a fair minded and informed observer would conclude that there was a real possibility of a real danger that the judge or adjudicator was biased. It was accepted in Disclaim Project Services Limited v Opec Prime Developments Limited [2001] BLR 285 that the rules of natural justice applied within the limitations imposed by parliament to adjudication. HHJ Grenfell concluded that the Adjudicator’s approach indicated no apparent bias and he had properly brushed aside the without prejudice material and ignored it when reaching his decision. He concluded that the defence had no real prospect of success and therefore enforced the decision.