Finance & Legislation - Stakeholder - Gateley Vinden


Hide and Seek and Adjudicators

Parties can be quite ingenious when it comes to trying to avoid the will of an Adjudicator. They can even resort to playing the game of hide and seek...

Parties can be quite ingenious when it comes to trying to avoid the will of an Adjudicator. They can even resort to playing the game of hide and seek in order to argue “it’s not me governor” and avoid the adjudication but getting away with this line of argument is not always that easy.

The case of M G Scaffolding (Oxford) Ltd v Palmloch Ltd [2019] EWHC 1787 (TCC) serves as an interesting case in point and shows that the court will have little patience with Parties who attempt to deceive, confuse or hoodwink a tribunal.

The adjudication concerned a dispute over unpaid MG Scaffolding (Oxford) Ltd (“MGS”) invoices. MGS named MCR Property Group (“MCR”) in its Notice of Adjudication as the Responding Party and, following the appointment of an Adjudicator by the RICS on 10 December 2018, MGS issued its Referral Notice to MCR on 14 December 2018. All good so far, or so you would think, until 17 December 2018 when MGS received a letter with “MCR” as a header and “MCR Property Group as the trading name of MCR Management Ltd” as a footer. The letter, issued by a Mr Brown to both MGS and the Adjudicator, said as follows:

“MCR Property Group does not recognise any claim or issue requiring resolution from an adjudicator. MCR Property Group is no more than a brand name and holds no assets of its own. MCR Property Group has no debt outstanding with the referring party. Any claim, if any, requiring adjudication or dispute resolution should be directed towards the company whom the referring party has a dispute” 

The Adjudicator interpreted Mr Brown’s letter to be a jurisdictional challenge and he invited submissions from the Parties. On 7 January 2019, the Adjudicator issued his non-binding decision finding that Palmloch was the true contracting party and that MCR was a trading name of Palmloch.

Palmloch participated in the adjudication but continued to reserve its position arguing “that this adjudication has been commenced against the incorrect party and that your jurisdiction in this matter is invalid”.

Ultimately, the Adjudicator issued his decision which required Palmloch to make payment to MGS. Palmloch ignored the Adjudicator’s decision.

The judgement in the subsequent enforcement proceedings provides useful guidance in circumstances where the true identity of a Responding Party is unclear. The starting point is that the Parties to the adjudication must be the same Parties named in the underlying contract and in any subsequent legal proceedings dealing with enforcement.

In deciding whether the Notice of Adjudication identified the correct Responding Party, the court had to “objectively assess the notice as a whole against its contractual setting, and consider how it would have informed a reasonable recipient, concentrating on substance rather than form”.

The court went on to conclude that “In the present case, there could not possibly have been any lack of clarity to the reasonable recipient as to the identity of the legal entity intended to be the responding party on a proper construction of the Notice of Adjudication” and that “A reasonable recipient construing the Notice in context would have understood the use of the trading name as an unambiguous reference to Palmloch; and that is, indeed, how the Notice was in fact construed by the recipient”.

Not surprisingly, the court concluded that The Notice of Adjudication was effective in commencing the adjudication and that Palmloch’s assertion, that by using its trading name the Notice was invalid, failed.

A Party that is considering launching an adjudication would do very well to stop, take a deep breath and ask itself a key question. Does the Notice of Adjudication accurately identify and define who the Responding Party is? Clearly, if you can avoid arguments as to the identity of the Responding Party, this will avoid jurisdiction arguments both during the life of the adjudication and later, at enforcement stage, if necessary and save a lot of money in the process.

Peter Vinden is a practising Arbitrator, Adjudicator, Mediator and Expert. He is Chief Executive of The Vinden Partnership and can be contacted by email at pvinden@vinden.co.uk.  For similar articles please visit www.vinden.co.uk

Contact Us

Gateley Vinden

Regent House

Folds Point

Folds Road

Bolton

Lancashire

BL1 2RZ

Bolton – Telephone: 01204 362888

Nottingham - Telephone: 0115 947 5334

London – Telephone: 0845 504 9733

www.gateleyvinden.com

 twitterfacebooklinkedin
  • UK Construction Online’s Stakeholder page offers you the chance to find and learn about the leading companies in the UK Construction Industry.

    Featuring the very best suppliers and operators in the sector our stakeholder’s pages offer detailed information about the company, their latest case studies and press releases, plus products and services and testimonials.

    We work with our stakeholders to constantly update and maintain this database to ensure that the information is relevant and helpful for those looking to source premium quality companies in the UK construction market.

    You can ‘View all Stakeholders’ or use the drop down menus to find specific stakeholders via their company name or by sector.

    Join the Fastest Growing Community for Construction

    UK Construction Online's Stakeholder package quickly connects your company to our vast audience of over 250,000 visitors a month.

    View our latest Alexa ranking:

    What is a Stakeholder?

    A stakeholder is a Mircosite that has the power to highlight a product or service, launch a promotion, or promote brand awareness to the construction industry in a way that full websites or more traditional marketing cannot.

    All stakeholders have the ability to have their latest press releases and case studies promoted across the UK Construction Online platform. UK Construction Online is updated daily, with the latest news across all sectors within the construction industry and all stakeholders are promoted on both social media and to a mailing list of over 122,000 subscribers.

    UK Construction Media
    0800 6127680
    enquiries@promarkmedia.co.uk