University of Brighton v Dovehouse Interiors Ltd | Fenwick Elliott

Dovehouse Interiors Ltd (“Dovehouse”) was engaged by the University of Brighton (the “University”) under an amended JCT Intermediate Building Contract with Contractor’s Design to carry out the fit out of the University centre (the “Contract”). The Contract provided for disputes or differences to be referred to adjudication under the Scheme. Practical completion was certified three months late and the parties fell into dispute concerning issues relating to time, money and incomplete works and defects. Six weeks later the final certificate was issued. Clause 1.9.1 of the Contract provided that the final certificate “shall be conclusive evidence” of the matters stated in it although clause 1.9.2 further provided that it would not be conclusive if adjudication, arbitration or other proceedings were commenced no later than 28 days after it has been issued. Recognising that this would be insufficient time to negotiate a settlement, the parties agreed to extend this period to 66 days. No settlement was reached.

On day 65, Dovehouse served a notice of adjudication on the University, referring to the final account dispute, but identifying the wrong adjudicator nominating body (the “ANB”) and giving an address different from the one specified in the Contract. It was, however, received by the University that day. The adjudicator resigned a week after his appointment as he accepted that he lacked jurisdiction. A second notice of adjudication was then served three days later correcting the error regarding the ANB.

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The University brought CPR Part 8 proceedings seeking a declaration that the first notice of adjudication was ineffective to commence proceedings because: (i) an adjudication under the Scheme did not commence until the referral was served on a properly appointed adjudicator; (ii) it did not identify and was not served at the contractually correct address; (iii) no adjudication was commenced as Dovehouse applied to the wrong ANB and the first adjudicator resigned; and (iv) the defects in the notice and resignation of the adjudicator could not be cured. The University further argued that as proceedings had not commenced prior to the expiry of the relevant period, the ‘saving provision’ in clause 1.9.2 had not been triggered meaning that the final certificate would be conclusive.

The judge decided that:

(i) adjudication proceedings were commenced when the notice of adjudication was given under paragraph 1 of the Scheme (as Dovehouse argued) and not when referral was given under paragraph 7 (as the University argued). The court applied a “purposive commercial construction” to the Contract, identifying that clause 1.9.2 enabled the parties to determine for themselves the extent to which a final certificate would be evidentially conclusive and that a notice of adjudication given under the Scheme was a critical document as it defined the scope of the adjudication.

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(ii) the first notice of adjudication was not invalid even though the wrong address was given and it was served at the wrong address. As not every breach renders a notice of adjudication invalid and, as the purpose of the notice is to inform the other party (and the ANB) of what the dispute is about and to define the dispute, a technical failure to identify the correct address was not considered a fundamental non-compliance. Further the Contract entitled the parties to serve a notice by “any effective means” and it was not disputed that the University had received the notice on the same day. The notice’s substantive purpose of commencing proceedings was achieved.

(iii) the wrong ANB did not invalidate the first notice. As the court had already held that proceedings were “commenced” by service of the first notice and because Dovehouse was not obliged to identify the ANB in the notice, the “wrong ANB” argument fell away.

(iv) the parties intended the saving provision in clause 1.9.2 to remain engaged – once triggered it could not be reversed – and this was consistent with what a reasonable person would envisage.

Source: https://antiquewolrd.com
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