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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Balfour Beatty Engineering Services (HY) Ltd v Shepherd Construction Ltd [2009] EWHC 2218 (TCC) (01 September 2009) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2009/2218.html Cite as: 127 Con LR 110, [2009] EWHC 2218 (TCC)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		1 September 2009

 


Mr Justice Akenhead:

Introduction

1. Balfour Beatty Engineering Services (HY) Ltd, formerly known as Haden Young Ltd ("HYL"), was employed as a subcontractor by Shepherd Construction Ltd ("SCL") to carry out mechanical and electrical work on a construction project at Castle Hill Hospital, Hull. In this Claim, HYL seeks to enforce the decision of an adjudicator, Mr Anthony Bingham, issued on 2 July 2009. In that decision, the adjudicator decided that SCL should pay HYL sums totalling £1,435,617.20.
2. SCL resists the enforcement proceedings not only on jurisdictional grounds but also on the basis that the adjudicator was biased and otherwise acted in breach of the rules of natural justice. The jurisdictional grounds raise an interesting albeit factually complex issue as to the extent to which an adjudicator may or may not within jurisdiction deal with an expanded scope of the dispute as referred to adjudication.

The Sub-Contract

3. SCL was the main contractor engaged by Health Care Solutions (Hull) Ltd to design and construct Oncology and Haematology facilities. The Sub-Contract was dated 23 April 2007. The original completion date under the Sub-Contract was 18 February 2008.
4. It is unnecessary to set out many of the sub contract terms. HYL by Article 1 undertook to design and construct, test, commission and complete the Sub-Contract Works. By Clause 5.2 (h), HYL undertook to procure that the Sub-Contract Works were performed "in a regular and diligent manner in accordance with the Programme for the Subcontract Works contained in Schedule 9". Clause 14.1 was headed "Access during Construction":

"… until the date of completion of the Subcontract Works under this Agreement… the Contractor grants a licence to the Subcontractor…to:

(b) enter upon the Sub contract Works Site…

solely for the purposes of implementing the Subcontract Works and carrying out the Subcontractor's Pre-Completion Commissioning."

5. By Clause 19.1, HYL undertook to complete the Contract Works by 18 February 2008, subject to any entitlement to extension of time. Clauses 19.2 to 19.4 addressed the Programme. Clause 9.3 make clear that the initial Programme was set out at Schedule 9. Provision was made for further programmes to be produced, in particular if delays were not attributable to any acts, omissions or the defaults of HYL; the corollary was that if delays were attributable to other factors, HYL could be asked to produce a revised programme showing steps to be taken to eliminate or reduce delay. Clause 22B provided for liquidated damages to be payable by HYL for culpable delays.
6. Clause 41 addressed delays and extensions of time. Clauses 41.1 and 41.4 required HYL to give notices and provide various details when delays or Delay Events arose. The Delay Events included "any breach by [SCL] of any of the Contractor's express obligations under this Agreement to the extent in each case that any such breach is not caused, or contributed to, by the Subcontractor..." Subject to Clause 41 SCL was to fix a revised Contract Completion Date. Clause 41.1 states as follows:

"If, at any time, the Subcontractor becomes aware that there will be (or is likely to be) a delay in completion of the Subcontract Works, the Subcontractor shall forthwith give notice to the Contractor's Representative to that effect specifying the relevant delay or impediment. In relation to any such delay or impediment, if the Contractor's Representative is satisfied…that such delay or impediment has arisen as a result of the occurrence of a Delay Event, then…the Contractor shall allow the Subcontractor an extension of time equal to the delay or impediment caused by such Delay Event (taking into account reasonably foreseeable consequences of the Delay Events) and shall fix a new Contract Completion Date which shall replace the existing Subcontract Completion Date."

It was primarily this clause that gave rise to some debate during the adjudications and in this claim as to the extent to which HYL was entitled to a prospective extension of time, that is, one which estimated in advance what delay was likely to be caused by the relevant Delay Events, as opposed to a retrospective extension of time, that is, one which determined how much delay, retrospectively, had been caused by the Delay Events.

7. Clause 56 provided for the dispute resolution procedures to be followed which were set out in Schedule 26. This Schedule provided for various stages of dispute resolution, reference to a "Liaison Committee", followed by mediation, then adjudication and finally arbitration. So far as adjudication was concerned, the adjudicator was to be appointed either from a panel of experts or, if experts could not be agreed for the panel, the President of the Chartered Institute of Arbitrators was to appoint. The adjudication was to result in a decision within 28 days of the adjudicator's appointment, unless extended. The adjudicator was to state any reasons for his decision which was to be "final and binding on both parties who shall forthwith give effect to the decision." It should be pointed out that the HGCRA 1996 statutory Scheme also requires reasons.
8. Schedule 9 comprised the programme referred to in the body of the Sub-Contract. It identifies seven zones and a number of different Blocks and mechanical and electrical commissioning occurring in the seven Zones. There were three Levels in the buildings and a number of Blocks split through the seven Zones. Zones 3 and 4 were on Level 01. So far as is material Zone 3 comprised Blocks W, which included the Pharmacy area, and X and Zone 4 comprised five blocks which included Block Z which was the Main Entrance. Some of these blocks (albeit not Block Z) extended to other Levels and Zones as well.
9. The Sub Contract Works were completed on 10 June 2008, some 16 weeks later than the agreed date of completion. Liquidated damages were deducted by SCL from sums otherwise due to HYL. Issues arose between the parties as to whether extensions of time were due to HYL. Consequently, on 19 September 2008, HYL served its Notice of Adjudication on SCL. The adjudicator in the First Adjudication was Mr Stephen Bickford Smith, a barrister well known in construction law circles (the "First Adjudicator"). Paragraphs 3.11 and 3.12 of the Notice clearly limited the dispute which was to be referred as follows:

"A dispute has therefore arisen in relation to SCL's right to deduct the sums for LADs and alleged Prolongation Costs…and HYL's entitlement to an extension of time to the Subcontract Completion Date owing to SCL's failure to provide access for HYL to commence its works in Block Z in accordance with the Subcontract Programme.

3.12 For the avoidance of doubt, although HYL contends that there are a number of grounds on which it is entitled to an extension to the Subcontract Completion Date; this Adjudication concerns only its entitlement to an extension of time owing to SCL's failure to provide access to Block Z in accordance with the Subcontract Programme."

HYL's Referral Notice served on 26 September 2008 reflects this limited claim. Thus, the substantive relief claimed was for declaration that there should be an extension of time to "22 September 2008…as a result of SCL's failure to provide access to Block Z".

10. The First Adjudicator issued his decision on the dispute referred to him in the First Adjudication on 4 November 2008. Essentially, he dismissed HYL's case that it was entitled to an extension of time by reason of delayed access to Block Z. He set out at Paragraph 59 the explanation given by HYL as the basis on which extension of time was claimed, which was that it was claimed on a prospective basis judged as at October 2007 when the extent of the alleged failure to provide access to Block Z became known. The claim was not pursued on a retrospective basis, that is looking at the events which had happened to see how much actual delay had been caused by the Delay Event relied upon.
11. In dealing with individual issues, which made up the dispute he considered the status of the Schedule 9 Programme and subsequent programmes issued by HYL in April and August 2007. He found at Paragraph 82 that the Schedule 9 Programme, while certainly a contractual document, did not have the effect contended for by HYL, which was that it determined HYL's right to be given access to particular areas of the site for specific periods. He found in Paragraph 87 that the purpose of the Programme was to enable the SCL Representative to monitor progress of the Sub Contract Works. He found in Paragraph 89 as follows:

"In my finding, SCL is obliged to make areas of the works available in sufficient time to enable HYL… to achieve the Programme dates. It is a question of fact in each case whether this obligation has been complied with or not."

12. He found that the later programmes were revised programmes under the Sub-Contract (Paragraph 98). He then moved on to address the question as to whether HYL was entitled to claim an extension on the basis of the situation as at October 2007 or as to whether it was necessary to have regard to subsequent events. Because he also found that there were no valid delay notices under Clause 41 prior to October 2007, he found at Paragraph 112 that SCL's obligation to grant an extension under Clause 41.7 never arose, at least at that stage. He addressed, in effect hypothetically, the issue as to whether HYL would have been entitled to an extension of time if notice had been given prior to October 2007 and found in Paragraph 121 that there was insufficient evidence that the Sub Contract Completion Date could not have been met and therefore no extension of time would then properly have been due to HYL.
13. Following this decision, HYL produced on 23 December 2008 what it called "a retrospective analysis of the delays encountered…whilst carrying out the Contract Works". It sought to demonstrate that HYL was entitled to an extension of time at the very least to 10 June 2008. As this document features as a major lynchpin of SCL's argument in this case, it is necessary to refer to some of the contents:

(a) In the Introduction, it referred to the fact that the Adjudicator in the First Adjudication considered that an extension of time had to be demonstrated by virtue of a retrospective analysis and that, upon the basis of such an analysis, full extension was due. The Zones and Blocks were set out in a table at Paragraph 1.1.18 and stated at Paragraph 1.1.19 that the "Delay Events and their effects are identified in detail in Sections 6.0 to 10.0." It refers to the fact that it programmed and reprogrammed its works to overcome the early delays but that, even if these "target programmes" were theoretically achievable, various intervening factors prevented HYL from achieving them.

(b) In Paragraph 2.0, entitled "Executive Summary", HYL summarised that there were five areas described as "SCL failures": Site Wide Delays, Block Z-Access Delays, Air Balancing Delays, Cause and Effect Testing Delays and Pharmacy Delays. These failures, it asserted, caused critical delay which prevented HYL from completing until 10 June 2008.

(c) The Site Wide Delays were said to be "caused by SCL's failures resulting in late access to each of the zones, late release of internal partition walls for HYL to carry out the services installations within the partition walls, and late completion of the external envelope of the building to provide a watertight building that were concurrent with the above delays" (Paragraph 2.1.3). The next paragraph went on:

"Furthermore SCL failed to complete and hand over the Works because of water ingress and dampness in the building which resulted in major mould and mosquito problems within the building which not only delayed the progress of the works but was a major health-related issue and one of the major causes of delay that prevented SCL achieving Completion until 10 June 2008."

There then followed these words in an unnumbered paragraph:

"More particularly these delays impacted in Block Z and in the Pharmacy as set out below."

(d) The Block Z-Access Delays related to SCL's alleged failure to provide access to HYL to carry out its installation in Block Z until 8 October 2007. Air Balancing Delays were said to relate to SCL's failure to provide access to allow completion of air balancing in all zones by 11 January 2008 or until 25 April 2008. The Cause and Effect Testing Delays related to alleged failures by SCL to complete its preceding builders work to enable this testing, particularly for the Security and Fire Alarm systems.

(e) The Pharmacy Delays were said to involve five Delay Events (numbered 1 to 5) which were said to involve "late and delayed detailed design… which delayed the commencement of pre-commissioning" which in turn delayed the commissioning work to be delayed.

(f) Paragraph 5 addressed the "As Built Programme" which was attached. The text claims that there were two critical paths running through until completion, the first being Zone 3 Builders work (including the Pharmacy), Pharmacy air balancing and Completion, and the second being late access to Zone 4, Block Z M&E installation, testing and commissioning of the Fire Alarm system/interfaces with doors/locks and Cause and Effect test and witnessing and Completion. It was said that these critical paths were substantially delayed "as a result of SCL failures that prevented HYL from completing its works any earlier than 10 June 2008".

(g) Section 6 purports to deal with "the Site Wide Delays". It unequivocally complains that SCL failed to provide HYL with watertight access to commence its installation works and that SCL failed to provide or release internal partition walls on time. It was said that the Block Z "access delay… was the critical delaying event". There is however detailed analysis, both in the prose of Section 6 as well as in appendices, of each zone and each block within each zone. An example is Paragraph 6.5.11:

"However, the overriding delaying events to zone 3 during the initial stages on the works was to the Pharmacy areas of Block W caused by a number of SCL's failures which included the significant delay in providing access and achieving a watertight shell. The delays to the Pharmacy caused critical delay to HYL Contract Works, and these are described in detail in the Pharmacy section of this submission."

It was made clear in relation to Zone 4 that "the critical overriding delaying event…during the initial stages of the works was caused by SCL's failure in releasing Block Z to HYL until 8 October 2007…set out in detail in the section on Block Z later on…"

(h) Section 7 addressed Block Z and related to "the failure of SCL to provide access to HYL to commence its Sub-Contract Works in Block Z in accordance with the planned programme and so as to allow the completion of HYL's works by the Sub-Contract Completion Date". Having reviewed in some detail what happened, HYL concluded in Paragraph 7.7.9:

"This event results from the breach by SCL of its obligation under clause 14.1 to grant access to Block Z on 14 December 2006. Access was not actually given by SCL until 8 October 2007 except for a three week period from about 9 July 2007. As a consequence of this event the completion of the Sub-Contract Works was extended from 18 February 2008 to 10 June 2008. The Event is therefore a Delay Event under clause 41.3 (h) of the Sub-Contract Conditions."

(i) Section 8 deals with Air Balancing. Again, each Zone is considered with the complaint in relation to each zone being in effect that the Air Balancing Commissioning was delayed by SCL's late running building works and late cleaning together with SCL's ongoing builders work and cleaning operations. In the "Final Conclusion", it was stated:

"8.7.4 The access, watertight and partitioning delays to Zones 1 to 7 for which SCL was responsible and the SCL building and cleaning delays (detailed earlier), resulted in the Air Balance Commissioning not starting until the start of February 2008…

8.7.5 Even when any meaningful Air Balance commissioning was started, further delays and disruption was suffered to HYL due to SCL's continuing building and cleaning works…

8.7.6 The late handover by SCL of Zone 6…and Zone 7…on 11 April 2008 due to SCL late building works…resulted in the Air Balance commissioning not been complete until the 25 April 2008.

8.7.7 Once all the Air Balancing was complete…the 2 weeks of Control Commissioning and Fire Testing Cause and Effect could be progressed…"

(j) The Cause and Effect Testing complaints were set out in Section 9. It dealt with "the ongoing delays by SCL which prevented HYL from completing the commissioning of its Security and Fire Alarm system which in turn prevented HYL from achieving a successful Cause and Effect test up until 9 June 2008". The main area of complaint was said to be "SCL's failure to complete its preceding builders work, and in particular its failures to complete the installation of the doors and Maglocks and its poor workmanship to many of the installed doors and associated equipment, which continued through to circa 5 June 2008, and its failure to provide HYL free and unhindered access…" This "Delay Event therefore caused a critical 16 weeks two days delay to HYL's Sub-Contract Completion Date" (Paras 9.5.5 and 9.5.6).

(k) The Pharmacy is considered in substantial detail in Section 10 over some 56 pages of prose. There were five delays "which impacted on the Sub-Contract Completion Date" and which was said in Paragraph 10.2.7 to have "caused the Sub-Contract Date to be extended to 10 June 2008." Delay Event 01 (Delay to the Detail Design of the Pharmacy), covered the period from 3 April to 15 December 2006 but it was said at Paragraph 10.4.62 that this activity was not critical for 22.5 weeks; however as HYL was delayed by 33 weeks and four days, and in the light of other information, HYL was critically delayed by two weeks and two days. Delay Event 02 (Delayed Response to HYL's Detail Design Submission and Late Isolator Information) was said to have caused an additional eight weeks and one day delay. Delay Event 03 (Delayed Access to the Pharmacy) was said to be a "concurrent non-critical" event (Paragraph 10.6.1). Delay Event 04 (Delay to the Completion of the Pharmacy Pre-Commissioning Works) was said in Paragraph 10.8.2 to arise "from SCL's late building works preventing HYL from completing it's pre-commissioning to the Pharmacy". A further critical delay of seven weeks and one day is attributed to this event. Delay Event 05 (Delay to Completion of the Pharmacy Commissioning) related to "SCL preventing HYL from completing its commissioning of the Pharmacy" (Paragraph 10.9.2); this is said to have caused a further eight weeks and four days critical delay.

14. Simply considering HYL's submission of 22 December 2008, HYL was seeking to claim an extension of time until 10 June 2008, namely for 16 weeks and two days. HYL attributed that delay to a number of factors. Confusingly, at different parts of the submission, it attributes delays to five different events or sets of events whilst also asserting two critical paths one through Zone 3 and the other through Zone 4. It is reasonably clear however that it is a retrospective analysis of delay as to what is said to have happened in terms of delay in the light of actual events.
15. Thereafter, correspondence was exchanged between the parties with SCL reserving its position in the light of Mr Bickford Smith's decision. Various issues arose between the parties in this correspondence which it is unnecessary to consider.
16. On 9 April 2009, HYL served its second Notice of Adjudication on SCL. Paragraphs 3.1, 3.2 and 3.10 materially state:

"3.1 A dispute has crystallised between the parties, as set out in this paragraph 3, as to:

(a) HYL's entitlement to an extension of time as set out in HYL's submission to SCL dated 23 December 2008…

(b) SCL's right to withhold amounts for Liquidated and Ascertained Damages ("LADs") and alleged Prolongation Costs.

3.2 The Subcontract Completion Date was 18 February 2008. However, the Subcontract Works were not certified as complete until 10 June 2008. HYL contends that the delay from 18 February 2008 to 10 June 2008 was caused by (or due to matters which were the responsibility of) SCL. These events are set out in detail, along with the background to how such events came to be critical to completion of the Subcontract Works, in the 23 December Submission.

3.10 A dispute has therefore arisen between the parties as to HYL's entitlement to an extension of time to the Subcontract Completion Date relating to the events set out in the 23 December Submission and SCL's entitlement to withhold LADs and alleged Prolongation costs"

A declaration, amongst others, was claimed "that the Subcontract Completion Date be extended to 10 June 2008". The adjudicator was asked to provide reasons for his decision.

17. Mr Bingham having been appointed adjudicator (the "Second Adjudicator"), the Referral Notice from HYL followed on 15 April 2009. It was accompanied by substantial documentation including two witness statements, the Contract and the 23 December 2008 Submission. Chapter 2 dealt with "Background":

"2.5 The scene was set early in the Project with the late completion of SCL's structure and envelope works. The impact of the late completion of these works was compounded by SCL requiring its subcontractors (i.e. partitioning subcontractor) to commence works prior to the building being watertight…

2.6 The early days reverberated through the entire Project. However, HYL took a pro active and supportive approach to these delays by:

(a) re-sequencing and re-programming its works…

(b) deploying additional resources; and

(c) working extended hours.

2.7 However, SCL has since used this against HYL… Whilst it is admitted that HYL considered it possible to still meet the Subcontract Completion Date until December 2007, this needs to be placed in its proper context… If these targets was [sic] not achievable (which it proved not to be) this does not this disentitle HYL to an extension of time.

2.8 In any event, HYL's works suffered further delays due to events caused by (or which were the responsibility of) SCL in the period post December 2007 which meant that HYL was not able to achieve completion prior to 10 June 2008."

18. HYL went on to complain that its commissioning activities were delayed and disrupted by various matters, such as late completion of building works, late installation of the doors, the installation of faulty door devices and cross hatches, dust-causing building works, hindrances to access and late implementation of changes. Paragraph 2.14 indicated that a retrospective analysis was done referring to the fact that "the impact of these delays on HYL's works were [sic] set out in detail within" the 23 December Submission. The Referral, materially, states as follows:

"4.1 As set out in the Notice of Adjudication, there is a dispute arising under the Subcontract between the parties as to HYL's entitlement to an extension of time as set out in its submission dated 23 December 2008…

4.3 HYL contends that the delay from 18 February 2008 to 10 June 2008 was caused by (or are due to matters which were the responsibility of) SCL. These events are set out in detail, along with the background to how such events came to be critical to completion of the Contract Works, in the 23 December Submission…

4.13 The dispute which has therefore arisen relates to HYL's entitlement to an extension of time to the Subcontract Completion Date owing to the events set out in the 23 December Submission and SCL's entitlement to withhold both LADs and alleged Prolongation costs…

4.19 HYL contends that completion of its work was delayed by SCL (or its other subcontractors) and that these delays were detailed in HYL's 23 December Submission. For the purposes of this Referral, HYL summarises those sections of the 23 December Submission which demonstrate its entitlement to an extension of time (see sections 8, 9 and 10 below). Other sections of the December Submission detail the background to the delays to the project such as the late completion by SCL of the structure and envelope works. At section 6 below, HYL sets out a summary of the methodology employed in the 23 December Submission.

7.1 HYL has carried out a detailed retrospective delay analysis in producing the 23 December Submission…

7.5 HYL has then established which of its works were completed late and prevented its works from completing until 10 June 2008 and carried out a factual analysis to establish the causes of those delays (sections 7, 8, 9 and 10 of the 23 December Submission). The delays, which form the basis of HYL's claim to an extension of time in this adjudication, can be summarised as follows:

(a) Delays to Air Balancing…

(b) Cause and Effect Testing…

(c) The Pharmacy…

7.6 The 23 December Submission also includes analysis and documentation relating to earlier delays caused by SCL and which includes sections relating to delayed access and weathertight delays caused by the late completion of SCL preceding works. Whilst these delays were very significant and caused and/or had the potential to cause very substantial delay and disruption to HYL's Works, the delays did not ultimately (generally) cause critical delay to the completion. This was due to the fact that, where possible, HYL consistently reprogrammed and re-sequenced its works…Whilst this part of the submission is fairly lengthy (35 pages) it is suggested that the adjudicator reads at least the introduction to the section and one of the 7 sub-sections to gain an appreciation of the impact of these early delays on HYL's works (see section 6 to the 23 December Submission).

8. DELAY: BLOCK Z AND PREVIOUS ADJUDICATION

8.2 Late access to Block Z was the subject of a previous adjudication between the parties. At the time of the first adjudication, HYL had not prepared any retrospective analysis in relation to this Delay Event and was claiming an extension of time based on what it considered to be its entitlement assessed prospectively at the time the delay occurred, which HYL contended entitled it to an extension of time to 22 September 2008. This claim was ultimately unsuccessful in the first adjudication and is therefore not claimed in this adjudication as the Adjudicator found that SCL was at liberty to adopt a wait and see approach (something HYL does not accept but is now overtaken by its retrospective delay analysis).

11. DELAY EVENTS: PHARMACY

11.8…It should be noted that Delay Events Ref 01, 02 and 03 did not cause critical delay due to HYL's reprogramming and resequencing of the Subcontract Works…"

A Summary Delay Programme was attached which pictorially presented the delays as being caused by Air Balancing and Cause and Effect testing delays concurrently with Delay Events 4B, 5A and 5B, affecting the Pharmacy. No delays as such attach on this Programme to other causes of delay.

The Course of the Adjudication

19. It would be fair to say that issue was joined on almost everything. A timetable was set, ultimately extending over a period of 2½ months. SCL on 29 April 2009 served an 88 page Response with four volumes containing two expert reports of Dr Champion, and 15 other volumes of material which included four witness statements and various legal submissions and authorities. I will return later to those expert reports but from the Response supported by the reports SCL unequivocally both challenged the factual and legal basis of HYL's claims and positively asserted that the real causes of delay were of HYL's own making. At pages 11 and 12, SCL asserted as follows:

"Finally, HY's suggestion that by early 2008 it somehow recovered all of the delays incurred throughout 2007, for which it was solely responsible, and which forms the cornerstone of many of its claims, is completely unproven and, as is demonstrated by SCL, is completely false.

HY makes no mention of the real causes of delay, those being matters for which only it was culpable. These include such issues as lack of resources, the significant delays it incurred throughout 2007 (including significant delays in the procurement and installation of its ductwork and the provision of permanent power throughout the building ("Power On") thereby delaying any testing/commissioning works) and the serious problems it experienced during the testing/commissioning stages. All of these are matters which HY, and only HY, were/are culpable. All of these issues are dealt with in detail in this Response.

Finally, and as SCL will demonstrate, there can be no doubt that HY's delays drove the Main Contract delays. Put simply, had HY completed its Subcontract Works on time, there is no reason why the Main Contract Works would not have been completed on time. It was the M&E issues that prevented the Main Contract Works achieving Practical Completion. Indeed, only when HY's Subcontract Works achieved Practical Completion on 10 June 2008, were the Main Contract Works also certified as having achieved Practical Completion."

20. The Response was addressed in the Reply of HYL on 11 May 2009. HYL attacked the independence of Dr Champion saying that it ill behoved "SCL… to put forward an expert report in such terms and whose true status is so vague and who is so clearly not approaching the matter as an expert properly working within the confines of CPR 35.3 would have to do." HYL went on:

"7.9 Dr Champion's instructions are not disclosed (as they would be in Court). The report reads like a man on a mission determined not to concede that even an hour of delay was caused to HYL's works by SCL. HYL set out in detail below why it would appear that Dr Champion has not carried out a truly independent exercise as required by CPR 35.3.

7.10 Unfortunately, HYL does not have access to the records which Dr Champion has clearly seen. Dr Champion will no doubt have seen all the other subcontractor claims made against SCL, and has clearly seen all the correspondence between the Trust and SCL. Very little if any is disclosed. With no disclosure in adjudication, and given the confidentiality of the process, Dr Champion can make accusations and statements with impunity as HYL will not always have the material and records to disprove his theories. But in this day and age of independent expert analysis and mindful of the provisions of CPR 35.3 it is rather extraordinary that, given the detail of HYL's claims, the records provided and the comments below, Dr Champion can confidently blame the entire delay of this Project on a single subcontractor whose works had to be repeatedly re-programmed by the main contractor from the outset because of their own preceding building delays. It is just not credible and the Adjudicator is asked to treat the report with a healthy degree of scepticism."

21. At Paragraph 13 of the Reply, HYL accepted that the decision in the First Adjudication was binding between the parties and that "the late access to Block Z was necessarily included in HYL's full retrospective analysis of the delays to the Subcontract Works [but] this has not been referred to the Adjudicator as part of this dispute". It was made clear in Paragraph 15.2 "that the delays experienced by HYL in the early parts of carrying out the Subcontract Works form the background to why the subsequent SCL delays… did cause the Subcontract Works to be delayed beyond the Subcontract Completion Date".
22. In response to the assertions based on Dr Champion's reports on the delays were attributable to matters which HYL was responsible, HYL argued and asserted in Paragraph 26 that it was not to blame and that SCL was. For instance:

"Air Balancing

26.2(c) Even if SCL was correct that the lack of 'lights on' prevented SCL from carrying out its cleaning (which is denied) then HYL has explained, at great length, the preceding delays which it had encountered in obtaining access to the various blocks to the Hospital (sections 3 to 9 of the 23 December Submission) and the further delays in undertaking its works, including delays caused by the mould in the partitions (section 6.10 of the 23 December Submission).

Cause and Effect

26.12 In any event, if there was any delay to the power on dates, as alleged, then HYL has explained, at great length, the preceding delays which it had encountered in obtaining access to the various blocks to the Hospital (sections 3 to 9 of the 23 December Submission) and the further delays in undertaking its works due to the mould in the partitions (section 6.10 of the 23 December Submission) both of which impacted on its ability to carry out its installations prior to commissioning commencing.

Recovery of Earlier Delays

26.17 …Dr Champion includes a table setting out the approximate period of delays he says has been incurred to HYL works on a zone by zone bases as at 10 January 2008 as measured against HYL's April 2007 suite of programmes. The delays he sets out are on average circa 24 weeks late.

26.18 …Dr Champion states that there is no evidence that HYL ever managed to recover these significant delays that it had incurred through no fault of its own. Dr Champion goes on to state that no significant delay had been incurred as a fault of SCL to HYL works since the issue of the April 2007 suite of programmes.

26.19 Such assertions are flawed for the following reasons……

Alleged Site Wide Delays

26.20 At paragraph 6.125 [of the Response] SCL has listed a number of issues which it says, without any analysis, caused significant delays to HYL's Works and the Main Contract Works - all of which were the responsibility of HYL.

26.21 These assertions (for they are little more than this), are rejected by HYL as follows:

…

(d) At section 7.5 to his report, Dr Champion sets out what he refers to as HY's lack of resources that he says prevented HYL from commencing its works within the planned dates. However, Dr Champion has carried out no detailed analysis to establish that any delay (be it critical or otherwise) was caused to HYL's works as a consequence of the alleged lack of resources. SCL continually failed to hand over blocks to HYL to commence its works until weeks and months after the agreed dates and even once handed over then spent many more months making the areas watertight and causing further delay to HYL's works and it is these delays which resulted in HYL's works across the project being continually pushed further and further back and resulting in greater numbers of resources being required to recover SCL's own delays/failures."

23. SCL served a Rejoinder to the Reply on 18 May 2009. This ran to 37 pages included a brief addendum to Dr Champion's reports. SCL took issue with the challenges about the independence and professionalism of Dr Champion. At Paragraph 20, SCL asserted that HYL's position was inconsistent:

"In its Response, SCL confirmed the following:

HY's position is completely inconsistent. Indeed, and as SCL has demonstrated in its Response, the claim advanced by HY in the current adjudication is merely the latest, in a long line of inconsistent and unproven attempts, to try and justify an extension of time.

It is a fact that in October 2008 HY said that the critical delay to its Subcontract Works was caused by delayed Access to Block Z. That claim failed. HY went back to the drawing board and in December 2008 HY submitted its December Submission, alleging that numerous events were critical to the delayed completion of its Subcontract Works. However, the analysis in the December Submission states that the critical paths (which were not demonstrated in any event - indeed HY now concedes that no critical path analysis has actually been undertaken) ran through various activities which in the referral HY now confirms as no longer being critical. HY's position is completely confused.

Furthermore, HY cannot claim in the Referral that delayed access/weather tight delays (none being proven in any event) were not causative of critical delayed completion (see paragraph 7.5 in which the adjudicator was simply asked to read the introduction for 'background information') and yet now, in its Reply, continually refer to said alleged delays. Its position is untenable. Notwithstanding that there are no grounds for such a claim, as was made clear in the Response, HY cannot now seek to develop its case by way of Reply, something that it is clearly trying to do."

24. At about this time, there started to be some heated discussion between the parties about disclosure of the other documents. This also involved the adjudicator. So far as material, correspondence was as follows:

(a) The adjudicator e-mailed to the parties on 19 May 2009 as follows:

"HY makes the point (eg Reply to Response…) that it has not had the benefit of scrutinising the main contract files. Are you willing to invite HY to visit and inspect?"

On the same day, SCL's solicitors responded that there was no objection to HYL inspecting files.

(b) On 20 May 2009, HYL's solicitors wrote by email with what might be described as a "wish list" of documents which HYL wished to see. Clearly, many thousands of documents were sought.

(c) On 21 May 2009, SCL solicitors wrote back as follows:

"…This is HY's claim for an EOT. It is not for HY, at such a late stage in the proceedings (HY has never requested any of these documents previously) to seek to go on some form of 'fishing expedition' to try and locate documents which it has never previously requested and where it has not demonstrated the relevance of the documents to the claim advanced. It is important that HY understands that by embarking upon this course of action at this late stage may be seen to be a breach of natural justice…

…SCL would suggest that HY needs to take stock and issue a far more proportionate, selective and the relevant request for inspection, limited to those documents referred to in paragraph 7.10 of its Reply and setting out why it considers the documents requested are relevant to its claim on the precise period it is requesting site of documents for."

(d) On the same day, the adjudicator e-mailed the parties:

"SCL asks for the adjudicator's thoughts. This adjudication is a two-way street. One way is HY calling of the EOT. The other way is SCL calling for significant damages from one enterprise. It looks good when you make all and everything available…bad when you don't."

(e) SCL's solicitors replied on 22 May 2009 in a long letter, the material parts of which are:

"We are very concerned at the recent turn of events. We bear in mind that this is an adjudication; intended to be a swift, summary and inexpensive procedure. Disclosure is not a normal incident of adjudication although… an adjudicator may request the party to supply him with such documents as he may reasonably require.

You will have read the e-mail [from HYL's solicitors] dated 20th May in which she sets out the categories of documents her clients would wish to inspect. It is, on any view, a wide-ranging request, extending well beyond the category of documents which initiated this correspondence, namely the records and other material seen by Dr Champion. Indeed were our clients required to provide disclosure on the scale requested not only would this take considerable time but it would be disproportionately expensive and oppressive; this against the background that HY has not provided any explanation as to why the categories of documents referred to are relevant to any issue in the adjudication.

Indeed…whilst some of the information can be made available relatively quickly, it will take months to collate all correspondence (including e-mails, minutes of meetings, programmes, progress updates, final accounts)… Much is stored electronically, and various PC's and servers will have to be interrogated…

…HY is now asking for a copy of virtually every document ever produced on the project, without even explaining the relevance of these documents (never mind taking account of matters such as proportionality)…

However, your response to that e-mail, dated 21st of May stated [as above]

We would respectfully suggest that this is unreasonable and therefore now write to ask you to make clear directions on this matter.

In order to assist the process we would suggest the following: that SCL makes available for inspection all of the information that has been provided to Dr Champion in relation to this matter…

…We would therefore also seek a direction that HY makes the following documents available for inspection by SCL…"

(f) The adjudicator replied by e-mail the same day:

"…

1. At HY Reply to Response para 7.10 of 11 May HY seeks to persuade the adjudicator the non-access to SCL records undermines SCL case. So,

2. Following the Rejoinder of 18th May, the adjudicator asked SCL 19^th "Are you willing to invite HY to visit and inspect (the main contract) files?" Then,

3. On Wed 20^th the adjudicator asked for SCL contemporaneous notes of Main Contract delays and potential delays.

4. Exchanges eventually indicate (by today) that SCL regards all this as unreasonable/disproportionate.

5. Hitherto the adjudicator has proceeded on this (inspection/request the materials topic) by way of merely inviting SCL to assist.

6. Of the request for a direction: The adjudicator does not give a Direction.

7. The intention is to proceed with the materials to hand and the meeting and with the Award."

(g) SCL's solicitors responded by e-mail on 26 May 2009 reiterating SCL's position and on the same day the adjudicator repeated Paragraph 7 of his e-mail above.

25. A meeting was fixed for 29 May 2009. Beforehand there was some e-mail traffic about the agenda:

(a) On 26 May 2009, the adjudicator wrote:

"As to the agenda for Friday:

Please ask Dr Champion:

1. to list all delay events occurring to the HY works

2. say when the event was known about (date) whether prospective or actual/current or past.

3. say of prospective events which events would merely likely delay the completion date

4. say ditto of actual/current

5. say ditto of (and notwithstanding) past events

6. say what events actually delayed the HY competition dates

7. say of items 3/4/5/6 the category of event…EOT? Act of prevention? HY culpable?

HY please do same.

Please ask those who can bear witness to the fact of delay to attend. And show TB [adjudicator] the Delays Notebook.

Please relate the facts of delay to the EOT machinery. Be able to say whether a delay event should/should not =EOT"

He added in an e-mail a few minutes later that "the intention is to proceed with the materials to hand and with the meeting and with the Award."

(b) SCL's solicitors responded on 27 May 2009. They referred to the fact that HYL's claim was for delay caused by Air Balancing, Cause and Effect Testing and Pharmacy problems but were concerned that the adjudicator was looking for information about all delay events. They sought clarification because, as they articulated it:

"Please excuse me if I have misunderstood/misinterpreted what is being asked, but you appear to be asking SCL (the Responding Party) and its Expert to go away and undertake an exercise that i) attempts to make out a claim for HY and/or ii) runs contrary to the case advanced by HY in this adjudication? As you will be well aware that it is not for SCL or the Adjudicator to make out a Referring Party's case for it or to try and make good any deficiencies in a Referring Party's claim…"

(c) HYL's solicitors replied by e-mail the same day to the adjudicator making the point that the Referral said at Paragraph 7 that the earlier delays involving late access and the like explained "why the later delays to HYL's works did in fact to delay completion of HYL's works beyond the Subcontract Completion date."

26. It is necessary only to summarise what happened at the two meetings which took place. The whole day was set aside for the meeting which took place on 29 May 2009. Mr Silberstein of SCL's solicitors said that he and the SCL representatives left it feeling "rather shell shocked"; he says in his witness statement that the adjudicator launched "a rather scathing attack on Dr Champion as to his role in the nature of his reports"; there was a discussion about "prospective delays"; the adjudicator said that he wanted to investigate any or all possible reasons for an extension of time; time was spent reviewing photographs and he said that there were also "some incredibly hostile exchanges" between the adjudicator and some key SCL representatives as to what the photographs were showing. He says that he told the adjudicator that the findings in the First Adjudication were binding on him. Much time was spent on considering the initial delayed access complaints. Mr Austin of HYL in his statement gives his account which is different in tone rather than in the content of the day's events. His understanding was that the adjudicator wanted to focus on the facts and gain a detailed understanding of the delays which occurred to HYL's works; his impression was to that the adjudicator felt that SCL was attempting to conceal the true reasons as to why the job had run late. He felt that the adjudicator "was extremely even-handed and very deferential and courteous to both sides".
27. The second meeting took place on 11 June 2009 at a hotel in York and it was to be regarded as providing an opportunity for SCL to put forward its position on delayed access and any other issues which it considered important. Mr Austin says that the SCL attendees were much better prepared than in the first meeting and gave a well rehearsed and polished presentation. The meeting lasted all day.
28. On 16 June 2009, SCL solicitors expressly reserved their position so far as jurisdiction and natural justice were concerned in relation to whether the alleged late or delayed access was an issue which fell within the adjudicator's jurisdiction. On 18 June 2009, the adjudicator responded by e-mail:

"I am clear that the adjudicator's task is to decide whether the denied zone access inter alia entitles HY to EOT. (entitlement).

Referral 7.6 says the SCL preceding works were late and takes the reader to 23^rd December Submission. Those early circumstances are in detail. That Referral and Submission explains "these delays were very significant and caused and/or had the potential to cause very substantial delay and disruption" (pause to consider entitlement) Then it explains that the re-programming did not ultimately cause critical delay to the completion See 41.2 time clause…additional resources (entitlement is not extinguished). The Referral 7.6 pleads that these early "very substantial delays" impacted on HY in each of the 7 zones… and why later delays "did in fact delay completion of HY works beyond the subcontract completion date". The tail piece invites the adjudicator to obtain an appreciation of the impact of these early delays on HY's work. That is what the adjudicator is doing. (entitlement).

At meeting 1 it was said by DS [Mr Silberstein] and Ronan [Champion] in his report that zone access/site wide delays were no longer pursued in this application. [HYL's solicitor] rejected that. I formed the view that Shepherd had taken a wrong turn. It had distracted itself from addressing the implications of denied access to the 7 zones (see expert report no 1). The reason for the second day meeting two weeks later was to give Shepherd an opportunity to assist the adjudicator not only with denied access and whatever else it saw fit.

A 16 page report was served on the morning of the hearing. As for denied access it explains (for all 7 zones) "this delay can only be described as "theoretical" or "artificial" as it takes no account of the subsequent programmes produced by HY"…and "In any event had no impact on the completion of HY's Subcontract Works"…It says this 7 times. All that has to be taken on board by the adjudicator as well as the oral and helpful assistance given by both parties staff at the York meeting…"

The Adjudicator's Decision

29. The adjudicator issued his decision on 2 July 2009. It would not be unfair to describe its format and wording as idiosyncratic, in part in shorthand and to a marked extent ungrammatical; I do not say that critically but it is necessary to see through the idiosyncrasy and poor grammar to determine what has been decided and why. After describing the parties and their representatives, the decision sets out verbatim the Notice of Adjudication, presumably cut and pasted. In Paragraph 5 he set out the background to the dispute and then goes on to deal with the argument that "SCL says that no extension of time claim can get out of the starting blocks because HYL failed to comply with the rule book for extension of time". He decided against SCL on that issue. He decided that the requirement in Clause 41.1 on the Subcontractor to give notice was not a condition precedent (Paragraph 6.7). There is no challenge to this part of the decision.
30. It is in Chapter 7 of his decision that he addresses the issue as to whether "HYL is entitled to an extension of time and if so what". He set out what he identified as HYL's position and Paragraphs 1.1.5 to 1.18 of the 23 December 2008 Submission. At Paragraph 7.2, he expressly referred to the First Adjudication and sets out some of the First Adjudicator's decision and then says:

"This Adjudication No. 2: This time in No. 2 HYL has brought an analysis of the circumstances throughout all Blocks in all (7) seven zones (the "23rd December Submission"). The chart above shows the scope of enquiry here as compared to (merely) Block Z."

31. Over Paragraph 7.3 and 7.4, he sets out SCL's position as set out in its Response and Rejoinder with various paragraphs being cut and pasted in. Paragraph 7.5 stated:

"ADJUDICATOR: Decided to call a meeting. Meanwhile the Adjudicator requested both parties provide a complete list of delays…Did SCL/HYL make contemporaneous notes of each delay? SCL said it was slightly confused by the question. It answered: "SCL has made clear in its submissions that HYL did not notify any Delay Events or request EOT during the course of its Subcontract Works. Indeed it continually reassured SCL that it would complete its Subcontract Works on time, and when it failed to do so, HYL did not give any indication that it was for any reason(s) other than for matters for which it was culpable. As such, there was nothing to SCL to make a contemporaneous note of in terms of a HYL Delay Event". The Adjudicator took the answer to be NO: SCL has no contemporaneous notes of delays. Helpful though is to note that SCL's emphasis is want of Notices (clauses 41.1/41.4) and the emphasis on the reassurances by HYL that it would hit to [sic] 10 February 2008 end date. The actual substantive issue is whether events have arisen at any time between 2 October 2006 and 10 February 2008 that entitles HYL to extension of time."

He then set out SCL's solicitors' e-mail of 21 May 2009 stating:

"The focus for SCL is the events December 2007 onwards. But HYL was arguing that events had long since occurred that provides extension of time (and events December 2007 onwards did too). The Adjudicator wanted to know the full story"

32. In Paragraph 7.6, he described the 29 May 2009 meeting. He said that he had given Dr Champion an opportunity to answer the criticisms by HYL as to his independence; Dr Champion did so. The adjudicator said that he approached the story chronologically. He recorded an engineer for HYL making a "prescient remark" that the critical activity was "to gain progressive water tightness to allow internal trades particularly M&E Works to commence". He concluded the site was far from being watertight and far from ready for HYL. It appeared "to be a plain case of denied possession and a real candidate for extension of time". He stated:

"[SCL] believed that zone access (sometimes called 'site-wide' delays) were no longer pursued in this application for extension of time and therefore this Adjudication. The Adjudicator there and then discussed the second point with the solicitors for the parties. Daniel Silberstein (for SCL) said that late/delayed/denied access was a completely new case being advanced mid adjudication and fatal to HYL. Monica Chaplin (for HYL) rejected that (and the Adjudicator agrees with her): the scope of 'Notice of Adjudication' and its reference to the HYL "23rd December Extension of Time claim referred to late/denied access…"

33. In Paragraphs 7.7 and 7.8, the adjudicator addressed the meeting of 11 June 2009 and the zone access issues. He summarised the arguments and evidence put forward by SCL and at Page 29 of 47 stated (with my emphasis added):

"As to the 16-page "Summary of Information" handed to the Adjudicator (11 June 2009), it describes SCL view from several aspects. As to delayed start, it explains, "there was a delay to the start of HYL's M&E work on site". It says this for all seven (7) Zones. It does not admit the reason why. However, the photographs for all seven (7) Zones are a very clearly [sic] indication that (for whatever reason) SCL was a long way behind… throughout all Zones. Dr Champion must have been instructed to ignore all these earlier events because his reports says [sic] this claim is no longer pursued (paragraph 1.1.10 [page 6] No 1 Report: "Alleged site wide Delays: However, and unsurprisingly given the programmes issued by HYL during the course of its Subcontract Works and its continual & assurances [sic] regarding completing its Subcontract Works on time, this claim is no longer pursued on this Adjudication"). The 16-page Report [served 11 June 2009] is not said to be Dr Champion's endeavour. The delayed access problem is tackled by SCL this way for all seven (7) Zones…"

34. At page 31 of 47, he addresses the Pharmacy:

"Adjudicator's observation: The SCL chart shows the Pharmacy in Zone 3 with all other Zone 3 work. The as planned 'green bar' runs 15 January 2007 to completion 07 September 2007 i.e. 32-weeks. So, all Zone 3 and all the Pharmacy ought to have been in possession from 15 January 2007. The SCL chart shows denied access to Pharmacy until 01 August 2007. Far from the work nearing completion due 07 September 2007, it had only been in possession for one (1) month!

Adjudicator's observation: The SCL theme that "no complaint was made in April 2007 when HYL produced its construction programme and it showed completion well before the completion date" does not extinguish extension of time entitlement…Instead it shows a mitigation endeavour [clause 41]. The same goes for the August 2007 programme (these observations are Decisions of the Adjudicator). The same goes for March, October, November and December 2007 up-dates. If it is that late/denied possession entitles extension of time it cannot be in some way then denied because re-programming aims to get the original contract completion date. See Referral [2.7], which is agreed by the Adjudicator.

As to saying that none of Zones 1-7, or pharmacy are critical, examination of the chart of green as-planned and red as-built paints the opposite picture. The delayed possession time and time again across all Zones is a collection of impediments [clause 41], which must fix a new completion date for the delayed access across Zones 1-7 without any thought yet being given to the consequential effect on attempting to do this £12.5m Subcontract at a different part of the calendar 2007 and 2008. Depriving the Subcontractor of possession in these proportions must yield up an extension of time for that reason alone, never mind its later effects. However there is certainly an obvious later effect in fact on HYL Works. The case put by HYL in its "23rd December Submission" and at the two meetings in this Adjudication is convincing in regard to site access delays in entitling extension of time (DECISION)."

35. The adjudicator then considered the question formulated as "What extension of time applies in consequence of all this denied possession?":

"DECISIONS

(2) Zones 1-7: HYL ought not to have been prevented from completing all Zones by 15 October 2007 latest [see 7.8 above] save for SCL requiring a different performance in exchange for extension of time.

(3) The worst late/denied start was 29-weeks in the Pharmacy and Zone 3. Other denied starts: Zone 6=20-weeks; Zone 7=21-weeks; Zone 5=13-weeks and Zone 4=10-weeks.

The case put by HYL convinces the Adjudicator that it cannot be denied such widespread access at the front of this Subcontract and then be blamed for being late at the end. And, since there is no reason [under clause 41.2], nor any other part, to deprive HYL of extension of time, the extension of time entitlement must be well beyond the 16-weeks beyond the contract date [DECISION]. Extension of time because of denied access alone is in retrospect 16-weeks. Go further, it is the case that had SCL properly operated clause 41, for the prospective extension of time, when all this denied access was visiting the Works, the extension of time would be upwards of 29 weeks. The arguments advanced by SCL in its 16-page Report and two meetings and having read and heard expert evidence for SCL:

The Adjudicator decides:

(i) HYL case cannot be said to be 'theoretical' or 'artificial'. The case presented in this adjudication was a detailed explanation of what happened in all Zones to deny access. HYL put up a very convincing case on the facts. Beyond peradventure all those events were well known to SCL and there ought to have been an Award of extension of time. All that is plain to the Adjudicator.

(ii) That SCL expert, Dr Champion ignored all this is taken to be that he was acting on instructions. He is held in high regard.

(iii) SCL has distracted itself from awarding extension of time to HYL for the serious non-possession. The wrong turn is to say that, "no complaint was made" by HYL, when it reprogrammed, even if it is so. The non-possession raises an immediate prima facie entitlement to extension of time. Irrespective of no complaining and the same applies if it is that HYL did not "apply" for extension of time. The same applies if it is that HYL had concurrent problems of its own. Extension of time still runs.

(iv) HYL presents a very convincing case about these early delays via its "23^rd December Report" and its 16 lever arch files.

(v) There is nothing in the contractual machinery or rules for extension of time that deprives HYL of the force of its case."

He then goes on to address the issue as to whether the late/denied access case is one that can be advanced and concludes that "there is no reason for disallowing the HYL arguments to be run".

36. At Paragraph 7.10, the adjudicator addresses the delay events said to have occurred during the works after possession was given. He summarises HYL's position from its 23 December Submission and lists the heads of delay relied upon. He cut and pasted, over four pages, Paragraphs 1.1.10 to 1.1.14 of one of Dr Champion's reports summarising SCL's position. He then wrote:

"ADJUDICATOR'S OBSERVATION: Dr Champion, is taken to have been instructed, to ignore the late/denied access facts. His expert report is immediately in difficulty.

As to the argument of want of charts and analysis (Dr Champion) none of this is needed here to show delay. It actually existed and caused critical delay to the Subcontract Works. Moreover, those Zone-by-Zone delays cannot fail to cause obvious delays to the following HYL Works then the Completion Date. The first domino in all and every Zone was hit by a sledge-hammer.

If it is that Dr Champion could find no evidence that HYL overcame the delays to Pharmacy in early 2007, the most probable cause is late/denied access. And, if it is that Dr Champion has found HYL repeatedly failed to commence duct work in every Zone/Block the most probable root cause is late/denied access. And, if it is that it is found that HYL had significant and continual lack of M&E resources, such that areas were left dormant, it is that Dr Champion has been obliged to dismiss the probable cause of late/denied access.

As to "Delays to air balancing", HYL explains, and it is accepted by the Adjudicator "It was imperative that the building Works had to be completed and the building clean and dust free for the Air Balancing Commissioning to start and continue uninterrupted". Then, HYL says the start was delayed by Access/Watertight/ Horbury (Partitions) delays. Dr Champion says that the true cause of the 15-weeks delay to Air Balancing is want of completing light fittings then cleaning them throughout. And adds: 'that was the underlying critical cause of delay to air balancing.' 'That was a matter of which HYL was entirely responsible' and 'accordingly no time whatsoever is due to HYL on this basis'. The Adjudicator observes that Dr Champion is deprived of considering the late/denied access as the cause. The Adjudicator decided, as a matter of common sense the cause of the delays to Air Balancing is the late/denied access across all Zones 1-7. The fact that the lights were late installed, late cleaned, late switched on is a consequence of the earlier delays. The causative potency of those initial delays is accepted as explained by HYL.

As to "Cause & Effect" testing: For the reasons as above the delay here is caused by late/delayed access. And if there is any doubt about commissioning as a whole the true cause of delay is the same. As to the Horbury partition Works, it is accepted that HYL explanation as to those delays were further difficulties within the HY Works which inevitably added to the difficulties with progress and entitle HYL to extension of time.

CONCLUSION: OF the Question in Issue: "Whether HYL is entitled to an extension on time and if so what?"

ADJUDICATOR ANSWERS: yes, to 10 June 2008."

37. The adjudicator went on to consider whether SCL was entitled to deduct Liquidated damages or Prolongation costs, answering "No" with some reasons. In substance, he decided and declared that SCL was not entitled to deduct such sums. He decided that £1,158,645.34 excluding VAT plus interest of £61,254.94 was due from SCL to HYL. He also ordered SCL pay all the adjudicator's fees and expenses.

The Issues on this Enforcement

38. There are essentially six issues raised:

(a) Was the adjudicator's decision responsive to the dispute referred to him? This relates to his findings that it was late/denied access which delayed HYL and entitled it to extension of time until completion.

(b) Did the adjudicator materially decide something in his decision which had effectively been addressed and resolved by the First Adjudicator, namely the Block Z access delay?

(c) Did the adjudicator materially decide other matters in his decision contrary to what had been decided in the First Adjudication?

(d) Did the adjudicator act contrary to the rules of natural justice in making an adverse inference in relation to the non-production of documents by SCL? There is a sub-issue as to whether he did make such an inference.

(e) In relation to his findings about Dr Champion, did the adjudicator act in a biased way?

(f) Given that this was to be a reasoned decision, was it a, or a sufficiently, reasoned decision? If it was not, what then happens?

The Law

28. Jurisdictional challenges on adjudication decision enforcement proceedings can be many and various. The Court of Appeal has expressed some concern that judges should be astute to discern inappropriate challenges. For instance in Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2006] BLR 15, the Court of Appeal stated the following in relation to both jurisdictional and natural justice challenges:

"85. The objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the Adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator. The courts should give no encouragement to the approach adopted by DML in the present case; which (contrary to DML's outline submissions…) may, indeed aptly be described as "simply scrabbling around to find some argument, however tenuous, to resist payment".

86. It is only too easy in a complex case for a party who is dissatisfied with the decision of an Adjudicator to comb through the Adjudicator's reasons and identify points upon which to present a challenge under the label of 'excess of jurisdiction' or 'breach of natural justice'. It must be kept in mind that the majority of Adjudicators are not chosen for their expertise as lawyers. Their skills are as likely (if not more likely) to lie in other disciplines. The task of the Adjudicator is not to act as arbitrator or judge. The time constraints within which he is expected to operate are proof of that. The task of the Adjudicator is to find an interim solution which meets the needs of the case. Parliament may be taken to recognise that, in the absence of an interim solution, the contractor (or sub-contractor) or his sub-contractors will be driven into insolvency through a wrongful withholding of payments properly due. The statutory scheme provides a means of meeting the legitimate cash-flow requirements of contractors and their sub-contractors. The need to have the 'right' answer has been subordinated to the need to have an answer quickly. The Scheme was not enacted in order to provide definitive answers to complex questions. Indeed, it may be open to doubt whether Parliament contemplated the dispute in evolving difficult questions of law would be referred to adjudication under the statutory scheme; or whether such disputes are suitable for adjudication under the Scheme. We have every sympathy for an adjudicator faced with the need to reach a decision in the case like the present.

87. In short, in the overwhelming majority of cases, the proper course to the party who is unsuccessful in an adjudication under the Scheme must be to pay the amount that he has been ordered to pay by the Adjudicator. If he does not accept the adjudicator's decision is correct (whether on the facts or in law), he can take legal or arbitration proceedings in order to establish the true position. To seek to challenge the Adjudicator's decision on the ground that he has exceeded his jurisdiction or breached the rules of natural justice (save in the plainest cases) is likely to lead to a substantial waste of time and expense – as, we suspect, the costs incurred in the present case will demonstrate only too clearly."

39. In C&B Scene Concept Design Ltd v Isobars Ltd [2002] EWCA Civ 46, Sir Murray Stuart Smith stated:

"26. Errors of procedure, fact or law are not sufficient to prevent enforcement of an adjudicator's decision by summary judgment. The case of Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd http://www.bailii.org/cgi-bin/redirect.cgi?path=/ew/cases/EWCA/Civ/2000/507.html[2000] BLR 522 is a striking example of this. The Adjudicator had made an obvious and fundamental error, accepted by both sides to be such, which resulted in a balance being owed to the contractor, whereas in truth it had been overpaid. The Court of Appeal held that the Adjudicator had not exceeded his jurisdiction, he had merely given a wrong answer to the question which was referred to him. And, were it not for the special circumstances that the claimant in that case was in liquidation, so that there could be no fair assessment on the final determination between the parties, summary judgment without a stay of execution would have been ordered.

29. But the Adjudicator's jurisdiction is determined by and derives from the dispute that is referred to him. If he determines matters over and beyond the dispute, he has no jurisdiction. But the scope of the dispute was agreed, namely as to the Employer's obligation to make payment and the Contractor's entitlement to receive payment following receipt by the Employer of the Contractor's Applications for interim payment Nos 4, 5 and 6 (see paragraph 12 above). In order to determine this dispute the Adjudicator had to resolve as a matter of law whether Clauses 30.3.3-6 applied or not, and if they did, what was the effect of failure to serve a timeous notice by the Employer. Even if he was wrong on both these points that did not affect his jurisdiction.

30. It is important that the enforcement of an adjudicator's decision by summary judgment should not be prevented by arguments that the adjudicator has made errors of law in reaching his decision, unless the adjudicator has purported to decide matters that are not referred to him. He must decide as a matter of construction of the referral, and therefore as a matter of law, what the dispute is that he has to decide. If he erroneously decides that the dispute referred to him is wider than it is, then, in so far as he has exceeded his jurisdiction, his decision cannot be enforced. But in the present case there was entire agreement as to the scope of the dispute, and the Adjudicator's decision, albeit he may have made errors of law as to the relevant contractual provisions, is still binding and enforceable until the matter is corrected in the final determination."

40. Since the major jurisdictional dispute in this case is whether the adjudicator had jurisdiction to decide that the late access delays were part of what he was required to decide, the judgement in Cantillon Ltd v Urvasco Ltd [2008] BLR 250 is apposite:

"There has been substantial authority, both in arbitration and adjudication, about what the meaning of the expression "dispute" is and what disputes or differences may arise on the facts of any given case. Cases such as Amec Civil Engineering Ltd -v- Secretary of State for Transport [2005] BLR 227 and Collins (Contractors) Ltd -v- Baltic Quay Management (1994) Ltd [2004] EWCA (Civ) 1757 address how and when a dispute can arise. I draw from such cases as those the following propositions:

(a) Courts (and indeed adjudicators and arbitrators) should not adopt an over-legalistic analysis of what the dispute between the parties is.

(b) One does need to determine in broad terms what the disputed claim or assertion (being referred to adjudication or arbitration as the case may be) is.

(c) One cannot say that the disputed claim or assertion is necessarily defined or limited by the evidence or arguments submitted by either party to each other before the referral to adjudication or arbitration.

(d) The ambit of the reference to arbitration or adjudication may unavoidably be widened by the nature of the defence or defences put forward by the defending party in adjudication or arbitration.

It will follow from the above that I do not follow the judgment of HHJ Seymour, QC, in Edmund Nuttall Ltd -v- RG Carter Ltd [2002] BLR 312 where the learned judge said at paragraph 36:

"However, where a party has an opportunity to consider the position of the opposite party and to formulate arguments in relation to that position, what constitutes a "dispute" between the parties is not only a "claim" which has been rejected, if that is what the dispute is about, but the whole package of arguments advanced and facts relied upon by each side".

In my view, one should look at the essential claim which has been made and the fact that it has been challenged as opposed to the precise grounds upon which that it has been rejected or not accepted. Thus, it is open to any defendant to raise any defence to the claim when it is referred to adjudication or arbitration. Similarly, the claiming party is not limited to the arguments, contentions and evidence put forward by it before the dispute crystallised. The adjudicator or arbitrator must then resolve the referred dispute, which is essentially the challenged claim or assertion but can consider any argument, evidence or other material for or against the disputed claim or assertion in resolving that dispute."

41. It is obvious that disputes can be broad or narrow. For there to be a dispute, one needs a claim or assertion which is expressly or impliedly rejected or at least not accepted. Thus a sub-contractor can assert an entitlement to extension of time on one specific basis which is disputed; that specific dispute can be referred to adjudication; similarly, the sub-contractor can "throw the kitchen sink" at the contractor complaining that everything which did or did not happen on a given project caused delay entitling the sub-contractor to extension of time; that disputed claim will also be referable to adjudication. It must be right that, on these examples, the sub-contractor, if it has referred the narrower dispute to adjudication, is not barred from referring the broader dispute to adjudication, subject to one caveat: once an adjudicator has decided the first dispute, that dispute cannot be referred to adjudication again because it has already been resolved. The second adjudicator must be astute to see that he or she decides nothing to override or undermine the first adjudicator's decision; jurisdictionally, a later adjudicator's decision cannot override an earlier valid adjudicator's decision. The later adjudication decision may be wholly or partly unenforceable if materially it purports to decide something which has already been effectively and validly adjudicated upon.
42. So far as breaches of natural justice are concerned, again the law is well established. In Cantillon Ltd v Urvasco Ltd, the following was said:

"56. So far as failures to comply with the rules of natural justice are concerned, there have been a number of cases in which the TCC (particularly) has considered the conduct of Adjudicators. These include Discain Project Services Ltd -v- Opecprime Development Company Ltd [2001] BLR 285 and Balfour Beatty Construction Company Ltd -v- The London Borough of Lambeth [2002] BLR 288. In the latter case, HHJ Lloyd, QC, had to deal with the case where a contractor considered it was entitled to extensions of time and claimed in respect of 31 different Relevant Events. Liquidated damages had been deducted. The contractor commenced an adjudication seeking the return of the liquidated damages. Each side put in expert programming evidence. The adjudicator had done his own expert analysis of where the critical delay path lay, awarded the Contractor the bulk of the extension of time claimed and ordered the repayment of most of the liquidated damages. Materially the judge said:

"27. It is now well established that the purpose of adjudication is not to be thwarted by an overly sensitive concern for procedural niceties. In Macob Civil Engineering Limited v Morrison Construction Limited [1999] BLR 93 Dyson J made it clear that a mere procedural error should not invalidate an Adjudicator's decision. Adjudication under the HGCRA is necessarily crude in its resolution of disputes. Errors of fact and law do not vitiate the decision which has to be complied with, unless of course it was not authorised and thus made without jurisdiction. On the other hand adjudication under the JCT conditions (which are typical of other forms) envisage that some basic procedural principles have to be applied in order that each party is treated fairly...

28. Is the Adjudicator obliged to inform the parties of the information that he obtains from his own knowledge and experience or from other sources and of the conclusions which he might reach, taking those sources into account? In my judgment it is now clear that, in principle, the answer may be: Yes. Whether the answer is in the affirmative will depend on the circumstances. The reason lies, at least in part, in the requirement that the Adjudicator should act impartially…

29. Nevertheless, in my judgment, that which is applicable in arbitration is basically applicable to adjudication but, in determining whether a party has been treated fairly or in determining whether an Adjudicator has acted impartially, it is very necessary to bear in mind that the point or issue which is to be brought to the attention of the parties must be one… which is either decisive or of considerable potential importance to the outcome and not peripheral or irrelevant…"

Because in the Balfour Beatty case the adjudicator did not inform the parties of his methodology and seek their observations on its suitability and because if the losing party had had the opportunity to comment it might well have made a difference, he refused to enforce the decision.

57. From this and other cases, I conclude as follows in relation to breaches of natural justice in adjudication cases:

(a) It must first be established that the Adjudicator failed to apply the rules of natural justice;

(b) Any breach of the rules must be more than peripheral; they must be material breaches;

(c) Breaches of the rules will be material in cases where the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant.

(d) Whether the issue is decisive or of considerable potential importance or is peripheral or irrelevant obviously involves a question of degree which must be assessed by any judge in a case such as this.

(e) It is only if the adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment or, where relevant put in further evidence, that the type of breach of the rules of natural justice with which the case of Balfour Beatty Construction Company Ltd -v- The London Borough of Lambeth was concerned comes into play. It follows that, if either party has argued a particular point and the other party does not come back on the point, there is no breach of the rules of natural justice in relation thereto."

43. In relation to bias, there are two types: actual and apparent bias. For the latter, the test is whether the "circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility or a real danger, the two being the same, that the tribunal was biased" (see HHJ Humphrey Lloyd QC in Glencot Development and Design Ltd v Ben Barrett and Son (Contractors) Ltd [2001] EWHC TCC 15 at Paragraph 21). Actual bias was considered in Director General of Fair Trading v Proprietary Association of Great Britain [2000] All ER (D) 2425,

"34. The decided cases draw a distinction between 'actual bias' and 'apparent bias'. The phrase 'actual bias' has not been used with great precision and has been applied to the situation

(1) where a Judge has been influenced by partiality or prejudice in reaching his decision and

(2) where it has been demonstrated that a Judge is actually prejudiced in favour of or against a party."

44. So far as reasoning in the decision is concerned, there has been some authority over the years as to what is required. Mr Justice Ramsey said in Multiplex Contruction (UK) Ltd v West India Quay development Company [2006] EWHC 1569:

"34. As developed at the hearing these complaints also amounted to a criticism that the adjudicator failed to give reasons. I do not, however, consider that a criticism of a failure to give reasons or adequate reasons is a breach of the rules of natural justice in the context of an adjudication.

35. In Amec v. Whitefriars [2005] BLR 1 at p. 6, Dyson LJ said this:

"The common law rules of natural justice or procedural fairness are two-fold. First, the person affected has the right to prior notice and an effective opportunity to make representations before a decision is made. Secondly, the person affected has the right to an unbiased tribunal. These two requirements are conceptually distinct."

36.Dyson LJ does not there identify a failure to give reasons as being a breach of natural justice in the context of adjudication. In relation to the statutory provisions, paragraph 22 of the Scheme for Construction Contracts provides that, if requested by one of the parties to the dispute, the adjudicator shall provide reasons for his decision. This demonstrates, in my judgment, that in the absence of any other provision or a request the adjudicator does not have a duty to give reasons.

37. In Gillies Ramsay Diamond v. PJW Enterprises [2004] BLR 131 at 139, where the intelligibility of reasons was considered there was a request under paragraph 22 of the Scheme. In Carillion Construction Ltd. v. Devonport Royal Dockyard Ltd. (2005) BLR 310, Jackson J. considered the position at p. 325, paragraph 81-4 where he said this:

"During argument my attention has been drawn to certain decisions on the duty to give reasons in a planning context."

He refers to those cases and continued:

"In my view the principles stated in these cases are only of limited relevance to adjudicators' decisions. I reach this conclusion for three reasons:

(a) Adjudicators' decisions do not finally determine the rights of the parties (unless all parties so wish).

(b) If reasons are given and they prove to be erroneous, then that does not generally enable the adjudicator's decision to be challenged.

(c) Adjudicators often are not required to give reasons at all.

5. If an adjudicator is requested to give reasons pursuant to paragraph 22 of the Scheme, in my view a brief statement of those reasons will suffice. The reasons should be sufficient to show that the adjudicator has dealt with the issues remitted to him and what his conclusions are on those issues. It will only be in extreme circumstances such as those described by Lord Justice Clerk in Gillies Ramsay, that the court will decline to enforce an otherwise valid adjudicator's decision because of inadequacy of the reasons given. The complainant would need to show that the reasons were absent or intelligible and that, as a result, he had suffered substantial prejudice."

39. This passage was cited without comment by the Court of Appeal in [2006] BLR 15 at 29, but this aspect does not appear to have been relevant to the appeal. However, in this case it is not alleged that there is a breach of paragraph 22 of the Scheme. I therefore reject any criticism on the basis of a failure to give reasons and turn to the other matters relied on by WIQ to challenge the decision."

45. In Gillies Ramsay Diamond v PJW Enterprises [2004] BLR 131, the Inner House considered the question of reasons. It was said at Paragraph 31:

"In my opinion, a challenge to the intelligibility of stated reasons can succeed only if the reasons are so incoherent that it is impossible for the reasonable reader to make sense of them. In such a case, the decision is not supported by any reasons at all and on that account is invalid…In my view, that cannot be said in this case. The adjudicator has understood what questions he had to answer. He has reached certain conclusions in law on those questions which, however erroneous, are at least comprehensible. Even if the question is one of the adequacy of the reasons, I am of the opinion that the reasons are sufficient to show that the adjudicator has dealt with the issues remitted to him and to show what his conclusions are on each…"

46. In Balfour Beatty Construction Northern Ltd v Modus Corovest (Blackpool) Ltd [2008] EWHC 3029, Coulson J had to deal with a contention that the adjudicator omitted to address a key argument:

"I consider that there is also an analogy to be drawn with those arbitration cases where a defeated party seeks to set aside the award under section 68 of the Arbitration Act 1996 on the ground that the arbitral tribunal failed to deal with a particular argument advanced before it. It has been repeatedly said that an arbitrator does not have to decide each and every point argued, but only those that are genuinely 'en route' to deciding the underlying dispute between the parties: see Checkpoint Ltd v Strathclyde Pension Fund [2003] EWCA (Civ) 84; World Trade Corporation Ltd v C Czarnikow Sugar Ltd [2004] 2 AER (Comm)".

47. In Thermal Energy Construction Ltd v AE & E Lentjes UK Ltd [2009] EWHC 408, HHJ Stephen Davies in the TCC in Manchester considered the need for reasons:

"19. So far as the first question is concerned, both parties agree that the starting point is to be found in the decision at first instance of Mr. Justice Jackson, as he then was, in the case of Carillion Construction Limited -v- Devonport Royal Dockyard Limited [2005] EWHC 778 (TCC), where in paragraph 81 he stated five propositions which he derived from the authorities, the fifth of which is relevant to this case and which reads as follows: [set out above]

20. I should record that it is clear in my judgment from paragraph 84 of the decision of the Court of Appeal in that case that the Court of Appeal expressed itself as being in broad agreement with the five propositions which the Judge set out at Paragraph 81 of his Judgment. It is also right to record that subsequently those propositions have been followed by first instance decisions of the Technology and Construction Court, including most recently a decision of Mr. Justice Coulson in the case of Balfour Beatty Construction (Northern) Limited -v- Modus Corovest (Blackpool) Limited [2008] EWHC 3029 (TCC). I have been taken by Mr. Furst to certain passages in that Judgment which refer, with evident approval, to the passage from the decision of Mr. Justice Jackson in Carillion which I have just cited and also to the Gillies Ramsey case.

21. Mr. Furst in his written submissions submits that there is an analogy with Section 68 of the Arbitration Act 1996 in the context of the Arbitrator's duty to deal with the matters referred to him and to give reasons. Nonetheless he accepts, in my judgment rightly, that the analogy is not complete, because in the case of an adjudication there is of course an expedited procedure where the Adjudicator will often have to deal with a great number of matters within a short time-frame but where his decision has only a temporary finality, whereas of course the decision of an Arbitrator under the 1996 Arbitration Act is usually not subject to the same exacting time pressure and has is final, subject to restricted grounds for challenge. However nonetheless it seems to me the fact remains that an Adjudicator is obliged to give reasons so as to make it clear that he has decided all of the essential issues which he must decide as being issues properly put before him by the parties, and so that the parties can understand, in the context of the adjudication procedure, what it is that the Adjudicator has decided and why.

22. So, for example, in this case it would be important for any reader of the decision to know whether or not firstly the Adjudicator had purported to decide the set-off and counter-claim, and secondly, if so, on what grounds. By way of practical illustration, there is clearly a significant difference between a decision to the effect that the Adjudicator did not have jurisdiction to decide the set-off and counter-claim, which in principle would be subject to consideration by the Courts in the event of an adjudication enforcement application such as the present, and a decision within his jurisdiction that having considered the defence, he rejected it on the merits. In the latter case, in accordance with established principles, a party seeking to resist enforcement would not be entitled to challenge the correctness of that decision if made within his jurisdiction.

23. It seems to me therefore that it is right that a recipient of a decision such as this should be entitled to know what it is the Adjudicator has decided and why.".

48. Bringing all these strains of judicial observations together, I conclude as follows:

(a) The decision needs to be intelligible so that the parties, objectively, can know what the adjudicator has decided and why.

(b) A decision which is wholly unreasoned but which is required to be reasoned is not a decision for the purposes of the Scheme or under contractual machinery which requires a reasoned decision. It would therefore not be enforceable as such.

(c) Because the Courts have said time and again that the decision cannot be challenged on the grounds that the adjudicator answered the questions, which he or she was required to address wrongly, the fact that the reasons given are, demonstrably or otherwise, wrong in fact or in law or even in terms of emphasis will not give rise to any effective challenge.

(d) The fact that the adjudicator does not deal with every single argument of fact or law will not mean that the decision is necessarily unreasoned. He or she should deal with those arguments which are sufficient to establish the route by which the decision is reached.

(e) The failure to give reasons is not a breach of natural justice.

(f) The reasons can be expressed simply. If the reasons are so incoherent that it is impossible for the reasonable reader to make sense of them, it will not be a reasoned decision.

(g) Adjudicators are not to be judged too strictly, for instance by the standards of judges or arbitrators, in terms of the reasoning. This reflects the fact that decisions often have to be reached in a short period of time and adjudicators are often not legally qualified. It certainly reflects the fact that there has not been a full judicial or arbitral type process.

(h) The fact that reasoning in a decision is repetitive, diffuse or even ambiguous does not mean that the decision is unreasoned.

Was the adjudicator's decision responsive to the dispute referred to him?

49. In essence, this jurisdictional challenge by SCL relates to whether or not the dispute referred to the adjudicator in the light of the defences deployed by SCL permitted him to decide as he did in relation to the factors which, as he found, entitled HYL to extension of time.
50. It is first necessary to determine from the adjudicator's decision itself what he actually found:

(a) He found the case put by HYL in its 23 December 2008 Submission and at the two meetings with the parties was convincing in regard to site access delays entitling extension of time (Page 32 of 47).

(b) He held that that the extension of time by reason of denied access alone was in retrospect 16 weeks (Page 33 of 47).

(c) There was entitlement to extension of time even if HYL had not applied for it (Page 34 of 47).

(d) The most probable causes of delays to the Pharmacy, the failure to commence ductwork in every Zone and Block and any lack of M&E resources were the late or denied access (Page 42 of 47).

(e) The cause of delays to Air Balancing was late and denied access across all Zones and the late installation, late cleaning and late switching on of the lights (which had been said by SCL to have been the fault of HYL) were attributable to late and denied access (Page 42 of 47).

(f) The Cause and Effect testing delays were caused by late and delayed access. The true cause of the delay to the commissioning was the same (page 43 of 47).

(g) HYL was entitled to an extension of time until 10 June 2008 (Page 43 of 47).

51. One then needs to analyse what claims and assertions were being made by HYL's 23 December 2008 Submission since it is not in issue that it was that Submission which was disputed by SCL. One must bear in mind that this document was not a contract or a statute; it was a commercial document by which extension of time or relief from liquidated damages was being claimed. It should not be construed as if it was a legal document.
52. Paragraphs 2.1.2 and 2.1.3 in the Executive Summary expressly asserted that HYL was critically delayed and prevented from completing until 10 June 2008 by, among other causes, the so-called "Site Wide Delays", that is, is the late and denied access, release of internal partition walls and late completion of the external envelope. Another cause was water ingress and dampness in the building resulting in mould and mosquito problems (Paragraph 2.1.4). It is then asserted that "these" delays impacted in Block Z and in the Pharmacy as set out in Paragraphs 2.1.5 and 2.1.8. It was therefore expressly being claimed that these earlier causes of delay not only did cause delay but also impacted on later events.
53. HYL asserted that there were two critical paths, one running through Zone 3 and the Pharmacy and the other through Zone 4 including Block Z. 34 pages of the December Submission deal with the Site Wide Delays and set out in detail the complaints about late access, late release of internal partition walls and late completion of the external envelope, together with the water ingress and dampness. In Paragraph 6.5.11, it was stated that "the overriding delaying events to Zone 3 during the initial stages on the works was [sic] to the Pharmacy areas of Block W caused by a number of SCL's failures which included the significant delay in providing access and achieving a watertight shell. The delays to the Pharmacy caused critical delay to HYL Subcontract Works…described in detail in the Pharmacy section of this submission." Similar wording was used in Paragraph 6.6.10 in relation to SCL's (alleged) failure in releasing Block Z to HYL until 8 October 2007. The delay in the Pharmacy was said to have been caused by late access, amongst other things and the Pharmacy delays were on one of the alleged critical paths
54. It is clear from the Executive Summary that it was being asserted that the Air Balancing, Cause and Effect Testing and Pharmacy Delays entitled HYL to extension of time until 10 June 2008. As for the Air Balancing, Paragraph 8.7.4 asserts that the access, watertight and partitioning delays resulted in a delay to the start to the Air Balance Commissioning. Paragraph 9.5.6 asserts that the Cause and Effect testing failures caused a critical delay of 16 weeks and 2 days. It was Delay Events 4 and 5 affecting the Pharmacy which were said also to have caused critical delay overall.
55. There is a danger of over-analysis of documents such as the 23 December 2008 Submission. Broadly, and in the round, HYL was putting forward a claim for extension and relating that extension of time to all the delays and causes of delay which it put forward, namely the Site Wide Delays, the Block Z Access Delays, the Air Balancing Delays, the Cause and Effect Testing Delays and Pharmacy Delays. The critical path analyses relied upon showed delays through Zones 3 and 4 and there were said to be overlapping delays in respect of the last four broad heads of delay. It was specifically asserted that the Site Wide Delays and the water ingress and dampness problems "impacted" on the Block Z (Zone 3) and the Pharmacy (Zone 4) problems.
56. One then needs to analyse whether the whole of the disputed 23 December Submission was referred to adjudication because the adjudicator could only determine the dispute that was referred to him. The Notice of Adjudication is relatively neutral on this subject other than the contentions in Paragraph 3.2 that the delays until completion (16 weeks and 2 days) were attributable to the events and the background set out in the December 2008 Submission and that HYL was entitled to a full extension of time.
57. The Referral Notice dated 15 April 2009 is rather more restrictive in relation to the December 2008 submission. It stated (in Paragraph 2.6) that the Site Wide Delays and the water ingress and dampness problems "reverberated through the entire Project". At Paragraph 2.7, HYL asserted that the targets set in the re-sequencing and re-programming to overcome these earlier delays were ultimately not achievable and that does not disentitle HYL from securing an extension of time. At Paragraph 4.13, HYL claims that the dispute relates to HYL's entitlement to an extension of time "owing to the events set out in the 23 December Submission". The earlier delays are identified as being "background" (see for instance Paragraphs 4.3 and 4.19).
58. This is then picked up in Paragraph 7.5 and 7.6 in which it is made clear that the delays which form the basis of HYL's claim to an extension in this adjudication are the Air Balancing, Cause and Effect Testing and the Pharmacy but that, whilst the earlier delayed access and weathertight delays did not ultimately generally caused critical delay, they did impact upon HYL's works to each of the seven zones and they did explain why the later delays did in fact delay completion. The Block Z late access claim was not claimed for (Paragraph 8.2).
59. One then needs to consider the pleadings in the adjudication. In particular the Response asserted in effect that all the delays were attributable to the defaults of HYL, the fact that it had not recovered from its earlier delays, its lack of resources, the significant delays it incurred throughout 2007, significant delays in the procurement and installation of its ductwork and the provision of "power on" (which delayed testing/commissioning works) and other serious problems it experienced during the testing/commissioning stages. This was challenged by HYL which asserted that any such delaying factors were caused by amongst other things the earlier delayed access and weathertight delays.
60. In my judgement, the dispute referred to adjudication, insofar as it related to extension of time, was a disputed claim for extension related to Air Balancing, Cause and Effect Testing and Pharmacy delays which were explained at least in part and impacted upon by the earlier delayed access and delayed weather tightness complaints; the Pharmacy delays were materially caused at least in part by the late or denied access. In effect, the dispute encompassed or, through the Response and the Reply and the evidence deployed by both parties during the adjudication became, one in which HYL's alternative case was that, if the Air Balancing, Cause and Effect Testing and Pharmacy delays were in some way attributable to HYL, they were only attributable to HYL by reason of the earlier delayed access and weather tightness which in any event, as HYL argued, entitled it to extension of time. It is difficult to see that this alternative case is not presaged in the 23 December Submission which expressly in the Executive Summary said that the delays were caused by these earlier factors, amongst others.
61. It follows that there can be no complaint that the Adjudicator exceeded his jurisdiction by deciding that extension of time was due by reason of these earlier factors.
62. As to the complaint that the Second Adjudicator exceeded his jurisdiction by deciding the case for extension on a prospective basis, Mr Furst QC described the adjudicator's decision as "telegraphic". That observation is not wholly unfair but one must interpret the decision in the round. At Page 32 of 47, he decides that "the case put by HYL in its "23rd December Submission" and at the two meetings in this Adjudication is convincing in regard to site access delays"; the 23rd December Submission was based on a retrospective analysis. At Page 33 of 47, he purported to decide that the extension of time entitlement "must be well beyond the 16-weeks beyond the contract date" and then said that "the extension of time because of denied access alone is in retrospect 16-weeks". He purported to go further and said that, if SCL had properly operated Clause 41, the prospective extension of time "would be upwards of 29 weeks". However, in fact he only allowed an extension of time of 16 weeks (and two days) up to 10 June 2008 (Page 43 of 47) and, ultimately, allowed an extension of time by way of declaration to 10 June 2008. I do not consider either that it can be demonstrated that he decided the dispute upon the basis of a prospective analysis or that he did do so. He decided the case on a retrospective basis but (in judicial terms) indicated in "obiter" terms what the greater prospective extension would have been due. That does not undermine his jurisdiction or justify any jurisdictional challenge.

Did the adjudicator materially decide something in his decision which had effectively been addressed and resolved by the First Adjudicator, namely the Block Z access delay?

63. It is argued in effect that, because the adjudicator did not obviously or expressly say that he had excluded the late Block Z access grounds for extension from his findings, he must, materially, have decided the case upon the basis that those grounds formed at least a significant part of his decision that extension of time was due. If he did that, so it is argued, he will have decided something which was expressly not referred to him and which had been decided by the First Adjudicator.
64. I do not consider that this challenge has effectively been made out. At Paragraph 7.2, he expressly refers to the First Adjudication decision and that it related to a claim for extension of time "on account of circumstances regarding Block Z in Zone 4". He clearly had the decision of the First Adjudicator in mind and he expressly adverts in Paragraph 7.2 to the fact that the Second Adjudication relates to circumstances "throughout all Blocks in all (7) seven zones (the "23^rd December Submission"). The chart above shows the scope of enquiry here as compared to (merely) Block Z." The italicised emphasis is the adjudicator's. Having expressly addressed this, it is difficult to be satisfied that he then ignored the ramifications of the First Adjudication. Even if, however, his finding that extension of time was due for all the late access including that relating to Block Z, because the adjudicator did decide this case on a retrospective basis and because the dispute resolved by the First Adjudicator related to a claim for extension of time based on a prospective entitlement in October 2007 by reason of delayed access to Block Z, it was within the adjudicator's jurisdiction to include upon a retrospective basis the late access to Block Z as one of the factors justifying extension of time.
65. There is an additional challenge made by SCL in relation to Delay Event 03 in relation to the Pharmacy which was in relation to "delayed access". In the December 2008 Submission, this was said to be a "non-critical Delay Event" (Paragraph 10.6.1) and in the Referral it is said that "Delay Events 01, 02 and 03 did not cause critical delay due to HYL's re-programming and re-sequencing of the Subcontract Works". It is argued that since the Second Adjudicator at Page 33 of 47 of his decision said that the worst late or denied start was in the Pharmacy and Zone 3 and then went on to say that the extension of time due because of denied access alone was in retrospect 16 weeks he must have decided the case which expressly not been put forward as part of the dispute. I do not consider that this is a valid challenge. Because late access as a whole was put forward as material background which impacted upon the delay as a whole and because issue was joined through the pleadings, arguments and evidence during the adjudication as to whether all the delays both in 2008 and before were the fault of HYL, it was open to the adjudicator to decide that late or denied access was on analysis the true cause of delay. I repeat Paragraphs 55 to 60 above.

Did the adjudicator materially decide other matters in his decision contrary to what had been decided in the First Adjudication?

66. Other than the Block Z access delays, it is not wholly clear whether SCL maintain a jurisdictional objection. There is little in Mr Furst QC's written submission about this other than Paragraphs 113 to 117. It is put on the basis that HYL should not be permitted to enforce the decision because it has been procured by HYL's breach of contract in failing to knowledge that the First Adjudication decision was binding on it and to give effect it. There can be no objection to the proposition that contractually parties to a contractual or Scheme adjudication are required expressly or by implication to give effect to that decision pending final resolution by arbitration or court proceedings as the case may be.
67. I do not consider that it is a breach of contract simply to argue in a later adjudication something which is inconsistent with a decision from an earlier adjudication; even if there is a breach of contract, it is immaterial and non-causative of anything if the later adjudicator does not as such decide the later adjudication in a way which is inconsistent with the earlier decision. If the later adjudicator does decide the later dispute in a way which is materially inconsistent with a binding earlier decision, to that extent or wholly the later decision may be unenforceable. Giving effect to a binding earlier adjudicator's decision does not necessarily mean that one cannot argue that the earlier decision is not applicable or that it is distinguishable.
68. There are three matters said to have been decided by the First Adjudicator which it is said HYL failed to acknowledge in effect in its arguments and evidence before the later adjudicator:

(a) That the Schedule 9 programme was a management tool and that a failure to give possession in accordance with that programme was not a breach of contract.

(b) A retrospective claim must demonstrate that in fact the Delay Event relied upon causes delay, which requires detailed and substantial proof.

(c) The later programmes produced by HYL were revised programmes under the subcontract and not produced in an effort to make good SCL's defaults.

69. The First Adjudicator did decide that the Schedule 9 programme was a management tool (Paragraph 89) and that the dates in that programme were not contractual ones (Paragraphs 82 to 86). However, he did expressly find (at Paragraph 89) that, presumably by way of contractual construction, SCL was "obliged to make areas of the works available in sufficient time to enable HYL…to achieve the Programme dates"; this was subject to the proviso that HYL complied with the Subcontract. I do not see that the adjudicator in the Second Adjudication has decided the case in a way which is contrary to the contractual obligation adumbrated by the First Adjudicator. He has found that there was an extension of time in entitlement by reason of denied access (Page 33 of 47).
70. The second area of complaint is simply not made out or certainly has not been demonstrated to have been made out. HYL put forward a case which was supported by a substantial amount of evidence, both witness and documentary. It is not for this Court to analyse whether that evidence was is good or reliable but it was sufficient for the Second Adjudicator to form the view that as a matter of fact there had been delay up to 10 June 2008 by reason of late access.
71. As to the First Adjudicator's finding (Paragraph 98 of First Decision) that the later programmes were not produced in an effort to make good HYL's own defaults this was a very limited finding. It simply goes to HYL's motivation in producing the later programmes. It cannot be and is not suggested that the First Adjudicator actually found that there were no defaults on the part of HYL. It was still open therefore to HYL in the Second Adjudication to argue the Second Adjudicator was entitled to consider why the later delays were attributable to or impacted by the earlier access and weather tightness delay.

Did the adjudicator act contrary to the rules of natural justice in making an adverse inference in relation to the non-production of documents by SCL? There is a sub-issue as to whether he did make such an inference.

72. I am wholly satisfied that this complaint by SCL is simply unjustified. My reasons are as follows:

(a) Adjudicators are not bound by the rules of evidence applicable in courts in this country. Thus, the question as to whether it is acceptable to draw an adverse inference against a party as a result of its non-production of documents is not one which necessarily or at all impacts upon an adjudicator. Put another way, an adjudicator could draw such an inference and not then be subject to criticism for doing so.

(b) It may well be appropriate in many adjudications for an adjudicator to give advance notice at least the possibility of drawing such an adverse inference. That is what the adjudicator actually did in this case and he can not be subject to criticism if he then did draw such an inference. In that respect, he acted fairly.

(c) The decision of the Second Adjudicator does not, demonstrably or at all, depend upon the drawing of any such adverse inference. At Paragraph 8(3) of that decision, the most that he says in relation to the issue as to whether SCL was entitled to deduct Liquidated Damages or Prolongation Costs is:

"The Expert Report 2^nd title "The impact of HYL late completion on the Main Contract Works" is not made out in any event. The report does not investigate all delays that have occurred on the main contract. There is insufficient information to confidently blame the main contract overrun on this Subcontractor. Insufficient too to blame the prolongation claims of other Subcontractor on this Subcontractor"

(d) SCL's entitlement to these damages and costs was primarily rejected because the adjudicator had found that HYL was entitled to a full extension of time and, positively, that no delay had been caused to SCL. The adjudicator was simply saying, as a third ground for rejecting this cross-claim that it had not proved its case. There is no suggestion that he drew an adverse inference as opposed simply saying that SCL had not proved something in respect of which it had the burden of proof.

In relation to his findings about Dr Champion, did the adjudicator act in a biased way?

73. The complaint is in reality that the adjudicator took against Dr Champion and that displayed actual or ostensible bias. It is said that, because he found that Dr Champion was or must be taken to have been instructed to ignore the earlier access delays, this was harmful to SCL.
74. This does not demonstrate bias of either sort. It is clear that Dr Champion had not actually considered the earlier access delays. This must have happened with the concurrence of him and his clients. It is not an unreasonable inference for a tribunal to draw that between them they decided that it was unnecessary or inappropriate to consider those delays. Even if Dr Champion said that he had not been so instructed, it was open to the adjudicator to reject that statement and infer and find as he did. A finding in an adjudicator's decision which is adverse and is even a criticism of one party's or one of its witness's behaviour does not give rise to a valid charge of bias of either sort.

Given that this was to be a reasoned decision, was it a, or a sufficiently, reasoned decision? If it was not, what then happens?

75. Given the observations about the need for, extent of and quality of reasoning required which I have set out earlier in this judgement, the Court must not arrogate to itself the role of imposing verbal propriety. The fact that this adjudication decision does not reach the standard of an average court judgement (as judged by judicial peers) does not mean that it is not reasoned. A decision is not unreasoned just because the reasoning is wrong in fact or in law or because judges would give more reasons.
76. This decision is no work of art. The grammar is poor, the sentence structure is unconventional to say the least and it is in places confusing and repetitive. However, it is necessary to see through all that and determine if on the key issues there was some intelligible reasoning.
77. I consider that on the key issue as to whether there was an entitlement to extension of time he has given sufficient by way of reasoning. It is not necessary for a Court to agree with the reasoning. In this case, one can consider the "observations" as well as the "decisions" of the adjudicator to ascertain the reasoning. Essentially, his reasoning is in Chapter 7 and is as follows:

(a) By the date of the photographs showed to the adjudicator which appeared to have been in the autumn of 2007, the site was "far from ready for the M&E Subcontractor" (page 26 of 47); the photographs showed "areas far from being watertight via superstructure openings" and in all seven Zones SCL was a long way behind (Page 29 of 47).

(b) The enquiry conducted in the adjudication "as to late/denied access and all of the surrounding circumstances [did] raise a prima facie entitlement to extension of time" (Page 29 of 47).

(c) The theme (of late access) was similar for all Zones (Pages 30 of 47).

(d) The delay in possession time and time again across all zones is a collection of impediments which must fix a new completion date from the late access across Zones 1-7. Depriving the Subcontractor of possession in these proportions must yield up an extension of time for that reason alone, never mind its later effect (Page 32 of 47).

(e) "If it is that late/denied possession entitles extension of time it cannot be in some way then denied because reprogramming aims to hit the original contract completion date" (Page 32 of 47). In effect, what the adjudicator is saying is that just because a subcontractor re-programmes to overcome delay caused by factors which entitle it to extensions of time (in this case late or denied possession), it is not disentitled from an extension of time if the reprogramming does not work.

(f) The case presented by HYL in its 23 December 2008 Submission and at the two meetings was convincing with regard to site access delays giving rise to an entitlement to extension of time (Pages 32 and 33 of 47).

(g) Based on what actually happened, that is in retrospect, HYL was delayed by late or denied access and was entitled to an extension of time on that ground alone to 16 weeks. HYL's case was not theoretical or artificial but based on a convincing case on the facts (Page 33 of 47).

(h) Charts and analysis were not needed in this case to show delay because it actually existed and caused critical delay. The Zone-by-Zone delays must have caused delay (Pages 42 and 43 of 47).

(i) As a matter of fact, the reason for delay to the Pharmacy in early 2008 (the First Adjudicator refers to 2007 but this is an obvious mistake on the facts) was probably late/denied access. Even if there was a lack of M&E resources, this was probably caused by the same factor (Page 42 of 47).

(j) The cause of the delay to Air Balancing was as a matter of commonsense the late/denied access in all Zones (Page 42 of 47). The same applies in relation to Cause and Effect Testing (Page 43 of 47).

78. SCL argues through its Counsel that there is a critical gap in the adjudicator's reasoning which is the identification of a Delay Event within the meaning of Clause 41.3 of the Sub-Contract. This, it is argued, is a central issue because without a Delay Event there is no entitlement to an extension of time and if the adjudicator relied upon the failure to provide access in accordance with the Schedule 9 programme, which it is said is the most likely failure, that would have been something decided (against HYL) by the First Adjudicator. However, it is clear that the adjudicator was of the view that delayed access (if an act of prevention by SCL on HYL) provided an entitlement to extension of time; that is not, necessarily or at all, inconsistent with the First Adjudicator's decision (in Paragraph 89) that SCL was obliged to make areas of the works available in sufficient time to enable HYL (if complying with the contract) to achieve the Programme dates.
79. I remain unconvinced in terms of the policy of the HGCRA that challenges on this type of basis are appropriate. Whilst it is always legitimate to challenge an adjudicator's decision on the grounds of the absence of reasoning, I am sure that the legislators would not have had in mind a challenge on the basis that some arguably logical link in the chain of reasoning was missing from the decision. Provided that the broad thrust of the reasoning is provided, the Court should enforce. Otherwise, many adjudicators' decisions would be open to an effective challenge. For the reasons indicated in the preceding paragraph however, I do not have to decide this challenge on this policy basis.
80. The Second Adjudicator effectively decided this case on the basis that extension of time was due to HYL by reason of the late/denied access which in fact caused the whole delay. One would like to think that all judges at whatever level would not be immensely satisfied if they had produced a judgement in the form which the Second Adjudicator did on these issues after a full trial. However that is not the standard by which one judges adjudication decisions.

Decision

81. There will be judgement for HYL. This decision is enforceable and is to be enforced. The draft of this judgement will be circulated for any suggested corrections and any issues of interest, costs and permission to appeal should be addressed in writing by the parties at the same time. Such submissions have been provided.

Interest

82. HYL claim interest on to alternative bases are, the first being a sum due under the Sub-Contract at 2% over LIBOR or alternatively simple interest under Section 35A of the Supreme Court Act 1981. I have received no objection to the award of interest at from SCL or its Counsel. In my view the appropriate interest is that calculated on the latter basis. Clause 35.3 (e) of the Sub-Contract in this ages the Default Interest Rate (2% over LIBOR) where payment is not made "by the final date of payment", which clearly relates to be failure to make interim payments on time. It does not obviously related to the late payment of a sum awarded due under an adjudicator's decision. Accordingly the appropriate amount of interest, based on 1% above the Bank of England base rate, for the period up until the date of this judgement from the date when the awarded sums should have been paid, is £3126.89.

Costs

83. HYL claim the total sum of £78,034.96 exclusive of VAT in relation to their costs of and occasioned by these proceedings. Although VAT is claimed, it is unlikely that HYL is not registered for and in those circumstances of the VAT claimed should not be recoverable as part of costs. In detailed submissions from SCL's Counsel, objections are made to significant elements of these costs. It is not challenged that I can and should make a summary assessment. I have received no submissions from HYL in response or otherwise justifying the size or elements of its costs bill.
84. I have formed the view that HYL's costs are disproportionate to what in essence were proceedings which took little more than a month to pursue. In particular, the hours booked for attendances on clients (27.4), attendances on others (20.5), "other" unspecified work (18.9) and work done on documents (95.2) seem exceptionally and unnecessarily high, particularly in circumstances where there has been clearly very detailed involvement by Counsel. There was a large amount of unnecessary documentation put before the court; an example is a whole file's worth of coloured up programmes which were simply never referred to in argument.
85. Doing the best that I can, a figure of £45,000 is the summary assessment which I make in relation to HYL's costs. This sum should be paid within 14 days.

Permission to appeal

86. For reasons which will be communicated separately on the appropriate form, and permission to appeal is refused.