COVID-19 and Adjudication - MillChris Developments Ltd v Waters (2020)

COVID-19 and Adjudication - MillChris Developments Ltd v Waters (2020)

Changes in the Rules on Witness Evidence - Watch This Space

“The maxim of the British people is ‘business as usual’” Winston Churchill

The first case concerning the effect of the COVID-19 emergency has come before the Technology and Construction Court (TCC). The outcome indicates that the TCC will continue its robust attitude to adjudication and the enforcement of adjudicator’s decisions, and it is very much business as usual.

The proceedings were conducted remotely, in line with the new, temporary operating procedures in the courts. 

The details of the case are currently scant, but it concerned a residential building project, which began in 2017. The contractor, MillChris Developments Ltd, apparently ceased trading in November 2019, although Companies House still shows it as an active company.  The homeowner, Ms Waters, was not happy with the works and she commenced an adjudication on 23 March 2020 alleging that she had been overcharged by £45,000 and that there were defects in the works.

It is worth noting that 23 March 2020 was the day the government imposed the strict lockdown under which we are currently operating. Before that, less strict social distancing was being recommended.  The timing of the adjudication does not appear to have been a deliberate attempt to take advantage of the lockdown: the lockdown announcement took many by surprise and the adjudication would have been prepared before this date.

The adjudicator issued a timetable which required submissions to be completed by 3 April 2020 and a site visit on 14 April 2020. Nothing out of the ordinary, apart from the site visit, in respect of which I hope that the adjudicator would have orderd appropriate procedures to take account of government recommendations for social distancing.

MillChris then asked the adjudicator to postpone the adjudication until after the COVID- 19 crisis has passed.  The adjudicator declined to postpone, but did award an extension to the timetable of 2 weeks.

MillChris applied to the TCC for an injunction prohibiting the homeowner from proceeding with the adjudication, arguing that the adjudication would be in breach of the rules of natural justice. It had 4 arguments

  1. It did not have time to prepare for the adjudication as a result of the COVID- 19 crisis.
  2. It did not have time to prepare for the adjudication because it was no longer trading.
  3. Its solicitor was self-isolating at home which made obtaining evidence difficult.
  4. It would be unfair to have a site visit when none of its representatives were available to attend and there was not enough time to instruct a surveyor to attend the inspection on its behalf.

The homeowner did not attend the hearing and was not represented.

Mrs Justice Jefford declined to grant the injunction. 

She noted that while the TCC has the power to grant injunctions, this power will be exercised only rarely and in clear cut situations.  MillChris had not met the threshold set out in American Cyanamid case, where the test for granting an interlocutory injunction was established.

The court’s view was that short timescales are part of the adjudication process and that COVID- 19 had not exacerbated the situation.  There was no reason why papers could not be scanned and sent to the solicitor at home, or delivered there. The real reason why MillChris was unable to obtain evidence was nothing to do with COVID- 19, but was because it had been unable to contact its former Managing Director, and it had made no attempt to contact its project manager.

In the circumstances, the 2 week extension offered by the adjudicator would have allowed MillChris sufficient time to contact witnesses, obtain evidence and prepare its submissions.

As to the site visit, parties have no right to be present at a site visit and arrangements could have been made to ensure that the homeowner, who had to be there, did not influence the adjudicator or take the opportunity to present additional evidence.

The decision is a welcome first demonstration that the TCC’s commitment to the principles behind adjudication remains unaltered and that its no nonsense attitude continues.

There is no doubt that further cases will arise where parties experience genuine difficulties complying with the adjudication timetable because of coronavirus and because of issues outside their control. Perhaps a critical witness will fall ill, or might be trapped abroad.  The court did not regard MillChris’s grounds for applying for the injunction as entirely meritorious and it remains to be seen what its attitude might be if a party is experiencing genuine and intractable difficulties and the other party or the adjudicator is being intransigent or obstructive.

Given the current uncertain situation in the country, it is however reassuring to know that the TCC will be consistent in its approach to adjudication enforcement.

 

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