HT-2024-000316 - [2024] EWHC 3235 (TCC)

Given my findings on Grounds 1-3 together with Ardmore’s acknowledgement that it cannot escape enforcement with a win on Ground 4 alone (which would undermine the Adjudicator’s decision only on breach of the Building Contract and not on liability under the DPA 1972), there is now no real need for me to address this Ground in any detail. However, as it has been argued, I shall deal with it briefly.

In short, Ardmore contends that the Adjudicator deliberately ignored a material defence in the context of the claim of deliberate concealment. Specifically (as identified in Ms Whiting’s statement) the defence that BPCL or its agent “would have known the position on cavity barriers and that BDW is fixed with that knowledge as assignee”. Ardmore’s case is that the Adjudicator “clearly decided not to consider that point when resolving the question of what BDW would have known” about the presence of fire barriers.

BDW submits that there is no proper basis for a natural justice challenge on this ground because (i) Ardmore’s submissions amount in reality to no more than “a critique of the adjudicator’s reasoning”; (ii) the material defence on which Ardmore now seeks to rely was not in fact expressly raised by Ardmore in the adjudication; (iii) the Adjudicator did in fact deal with the issue which Ardmore claims was not considered; and (iv) that Ardmore has failed to satisfy its burden of establishing materiality. Analysis

Once again, I consider there to be nothing in this complaint and I need focus only on one or two of the points raised by BDW.

Having considered the various documents submitted to the Adjudicator by Ardmore, I agree with BDW that this “material defence” was not in fact squarely raised by Ardmore in the Adjudication. There are references in its documents to BSC and BEL, but its Response (Footnote: ⁸) focuses on what BDW itself knew, as does its Rejoinder to Reply⁹. BPCL is not even mentioned in the relevant sections of either the Response or the Rejoinder to Reply.

BDW’s Reply at 15-17 shows that BDW understood Ardmore to be advancing a case based on BDW’s actual knowledge (as opposed to any knowledge that might be imputed to it by reason of the knowledge of BPCL or its agents).

Whilst frankly acknowledging that Ardmore did not plead out the ‘material defence’ on which it now seeks to rely, Mr Pliener nevertheless contends that its submissions could only have been understood on that basis. I disagree. Nowhere is there an express submission by Ardmore that BDW is to be fixed with the knowledge of BPCL, or of BPCL’s agents, as assignee, and I can see no reason to suppose that the Adjudicator would therefore have understood the case to be advanced on that basis.

Tellingly in my judgment, Ardmore proposed a series of issues for resolution by the Adjudicator. BDW accepted these issues in a letter of 16 August 2024 and the Adjudicator duly dealt with each of Ardmore’s identified issues in the Decision. These issues did not include the “material defence” now identified by Ardmore. On page 107 of the Decision, the Adjudicator sets out the issues and sub-issues arising in respect of the claim of deliberate concealment. As Mr Pliener accepts, there is no issue concerned with the knowledge of BPCL or its agents. The only issue concerned with knowledge is sub-sub issue 5: “[w]hat is the earliest date on which BDW with reasonable diligence could have discovered the omission of fire barriers”.

In the circumstances, I am bound to say that I agree with Mr Choat that the failure to identify what is now said to be a material defence as one of the issues for determination by the Adjudicator, together with the failure to raise that defence in any of its submissions to the Adjudicator, is a fatal impediment to this natural justice challenge. I also agree that, accordingly, this challenge is no more than an attempt to contend that the Adjudicator made an error of law and/or of fact or that his reasoning was flawed.

Ground 4 fails. There is no real prospect of Ardmore establishing a breach of natural justice on this ground.