- 17 Jan 2025
- •
- 3 min read
Adjudicator jurisdiction to determine Defective Premises Act 1972 claims
The Technology and Construction Court (TCC) has recently entered judgment against Ardmore Construction Limited, ordering payment of £14,539,243.45 plus interest and costs. This followed Ardmore’s failed attempt to resist enforcement of an adjudicator’s award.
Background
BDW, as the assignee of the original employer, claimed damages for fire safety defects at the Crown Heights development in, Basingstoke, Hampshire, where Ardmore was the main contractor. Practical completion of the project occurred between November 2003 and June 2004.
Initially, the claim under the Defective Premises Act 1972 (DPA 1972) was time barred due to a six-year limitation period. However, section 135 of the Building Safety Act 2022 extended this period retrospectively to 30 years, allowing BDW to revive its claim.
BDW also pursued for a contractual breach claim, arguing that Ardmore had deliberately concealed its breaches, thereby avoiding the usual limitation period.
The adjudication
BDW commenced adjudication proceedings against Ardmore, alleging liability for the fire safety defects due to:
- Breach of its contractual duties.
- Liability under the DPA 1972.
The adjudicator found in BDW’s favour, but Ardmore failed to pay the sums awarded. As a result, BDW commenced enforcement proceedings in the TCC.
Ardmore’s objections
Ardmore contested enforcement of the adjudication award on four grounds:
- The dispute referred to adjudication had not crystallised.
- The adjudicator had no jurisdiction to determine a tortious claim under the DPA 1972, as the contractual adjudication clause referred only to disputes “arising under the contract”.
- The adjudication was unfair due to inequality of arms, given the significant passage of time since practical completion and the documents available.
- The adjudicator had failed to consider a material defence.
Court decision
All objections raised by Ardmore were rejected by Joanna Smith J, who upheld the adjudicator’s decision and awarded BWD the full sum of £14,539,243.45, with interest and costs.
Key takeaways
This case establishes a valuable precedent regarding adjudicator jurisdiction to determine claims under DPA 1972 pursuant to a contractual adjudication clause.
- Adjudication Clauses Covering Tortious Claims: This extends the principle established in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, [2007] 4 All ER 951 (in that case in relation to arbitration clauses). Parties can now be confident that adjudication clauses permitting referral for disputes “arising under the contract” will incorporate associated tortious claims arising out of the DPA 1972. Such claims will likely be increasingly referred to adjudication in light of the retrospectively extended limitation period brought in by section 135 of the Building Safety Act 2022.
- Impact of Extended Limitation Periods: An unusual factor of this case was the length of time which had passed since Practical Completion – over 20 years. Whilst no breach of natural justice was found in this instance, it will inevitably be a matter determined on a case-by-case basis. The persuasive points in the Ardmore case included the fact Ardmore’s own record keeping had seemingly been poor throughout the project, and substantive disclosure had been provided by BDW in the course of adjudication (and no attempts made by Ardmore to identify any specific further disclosure required).
- Challenges in Adjudications After Long Delays: Nonetheless, parties who intend to embark on adjudication after lengthy intervals (including those making use of the retrospectively extended limitation period) must be cautious and consider whether sufficient documents are available to allow the matter to be dispensed with fairly.
Joanna Smith J noted:
“Ardmore also accepts that the mere passage of time is not in itself enough to create unfairness and it is clear from the authorities to which I have referred that adjudication provisions may be relied upon “at any time”. Nevertheless, in principle it must be the case that the longer the period since the works in respect of which complaint is made, the more careful the court will need to be in scrutinising any complaint of unfairness.”
Practical advice
Claimants relying on the extended limitation period should ensure sufficient documentation is available to support fair adjudication. Potential claimants (including employers, assignees, and those pursuing contribution claims) should seek specialist legal advice promptly.
Trethowans construction dispute resolution team are experienced in successfully pursuing adjudication claims. Parties with potential claims are encouraged to get in touch and seek specialist legal advice as soon as possible.
BDW Trading v Ardmore Construction [2024] EWHC 3235 (TC
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.