HG Construction Ltd .v Ashwell Homes (East Anglia) Ltd is a story of a number of Adjudications, the Adjudicators being the great and the good.  Basically HG Construction is the builder for the Developer Ashwell Homes for a new housing development in Cambridgeshire.  

On or around the 7th July 2004 a contract came into being, it was the JCT Standard Form with Contractors Design 1998 and lo and behold a provision for Sectional Completion!  There was delay and there were various disputes including an aspect regarding liquidated and ascertained damages as to whether or not it was a penalty.  The first dispute was referred and a Decision made, the dispute or difference which was referred related to the validity or enforceability of the provisions within the contract for the deduction of liquidated and ascertained damages.

Hg challenged the applicability of the LAD’s on various grounds and included an argument that the partial possession that had been taken by Ashwell of the various sections and the delineation difficulty did not help the valuing of the sections this went to the root of the contractual provision for LADs and was ineffective.  The argument intensified as the Adjudicator made his decision.  He decided that it was possible to decide which works were within which section of the works and  that it was possible to decide practical completion aspects and therefore he viewed that LAD’s were valid and enforceable.

There was a second, third and forth Adjudication to a different Adjudicator who made decisions within the remit that he was given.  Interestingly HG challenged the valuation of sectional works in Adjudication number two and that they weren’t adequately calculated.  The decision was made in favour of HG Construction in a compromise prior to TCC proceedings and there followed in quick succession two further Adjudications some having adjustments and the other being that the forth one would be enforced by agreement of the parties.  Ashwell resisted enforcement of the decision Award No3, their argument was that there is no basis upon which the liquidated and ascertained damages operate, therefore it shows that there should not be a refund and that this was an issue that had already been dealt with in Award No1 by the decision of the Adjudicator which indicated that the provisions within the contract for deduction of Liquidated and Ascertained Damages were valid and enforceable.

The Judge examined this matter in the Queens Bench Division under Technology and Construction Court (TTC).  He held that;

1)    Clause 39A.7.1 of the JCT contract provided that the decision of an Adjudicator shall be binding until the dispute or difference is resolved in Arbitration, litigation or by agreement.  That in essence prevented the parties conducting successive or serial Adjudication on the same dispute.

2)    Prevention operated not only in the second Adjudication but also that any dispute that was the same and that had already been decided.

3)    Properly examined or analysed, the dispute referred to the Adjudicator in Adjudication No3 was substantially the same as that which had been already decided by a different Adjudicator in No1.  He went on to say that this was not a situation where new factual position had arisen giving rise to a new argument.

4)    Stemming from this and as a result of the above decision the Adjudicators decision in decision 3 regarding Liquidated and Ascertained Damages would not bind the party.

Now I thought this was rather basic and simple stuff.  I go on further to say that the Adjudicators involved hold themselves out to be leading edge, I don’t doubt that.  I have been involved in one recently where it was clear on the face of it that the contract in itself was not sufficiently