BDW Trading Ltd v Ardmore Construction Ltd

Factual and Procedural Background

This opinion concerns a summary judgment application by the Plaintiff ("BDW") to enforce an adjudication decision made by an adjudicator on 17 September 2024 (corrected on 18 September 2024). The adjudicator found that the Defendant ("Ardmore") breached its duties under a construction contract and was liable under the Defective Premises Act 1972 ("DPA 1972"), requiring Ardmore to pay damages and adjudicator costs. The dispute arose from alleged fire safety defects at a residential development project in The City, governed by a building contract entered into in 2002 between BPCL (the original employer) and Ardmore (the contractor), subsequently assigned to BDW.

BDW initiated adjudication in March 2024 after correspondence dating back to 2022 concerning fire safety defects and alleged breaches by Ardmore. Ardmore raised objections to enforcement on four grounds, including lack of crystallisation of the dispute, lack of adjudicator jurisdiction over tort claims under the DPA 1972, inherent unfairness due to documentation imbalance, and alleged failure by the adjudicator to consider a material defence.

Following the adjudicator's decision, BDW issued a claim form for enforcement, and the court granted permission for summary judgment prior to service of a defence by Ardmore. Both parties submitted witness statements and legal arguments, leading to this judgment.

Legal Issues Presented

1. Whether the dispute referred to adjudication had crystallised at the time of referral.
2. Whether the adjudicator had jurisdiction to determine a tortious claim under the Defective Premises Act 1972 within the adjudication provision of the building contract.
3. Whether the adjudication process was inherently unfair due to an imbalance in documentation and evidence available to the parties (natural justice challenge).
4. Whether the adjudicator deliberately failed to consider a material defence relevant to the allegation of deliberate concealment.

Arguments of the Parties

Defendant's Arguments

• Ground 1: The dispute had not crystallised because the claim evolved over time, no clear denial of liability was made, and the short period between detailed claim particulars and adjudication was insufficient for crystallisation.
• Ground 2: The adjudicator lacked jurisdiction over the tortious DPA 1972 claim as the adjudication clause limited disputes to those "under the contract," which should be interpreted narrowly and exclude tort claims.
• Ground 3: The adjudication was unfair due to a significant imbalance in documentary evidence; Ardmore had almost no relevant contemporaneous documents, relying on documents disclosed by BDW, and the adjudication process lacks mechanisms to compel disclosure.
• Ground 4: The adjudicator intentionally ignored a material defence that the original employer or its agent had knowledge of the alleged defects, which should have been imputed to BDW as assignee.

Plaintiff's Arguments

• Ground 1: The dispute had crystallised through detailed correspondence and disclosure over time, including expert reports and offers to inspect the site, and the 8 March 2024 letter did not fundamentally change the claim.
• Ground 2: The Fiona Trust principle applies to adjudication clauses, meaning a broad interpretation of "under the contract" applies, encompassing the DPA 1972 claim. The difference in wording between adjudication and arbitration clauses does not indicate a narrower scope for adjudication.
• Ground 3: BDW provided reasonable and proportionate disclosure before and during adjudication, complied with directions for further disclosure, and Ardmore did not adequately demonstrate material prejudice or request further documents during the adjudication.
• Ground 4: The alleged material defence was not clearly raised in adjudication submissions, and the adjudicator addressed all issues properly. The challenge amounts to a critique of reasoning rather than a breach of natural justice.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first examined whether the dispute had crystallised before adjudication. It found that BDW's correspondence, expert reports, and offers to inspect the site demonstrated a sufficiently defined and opposed claim, rejecting the Defendant's argument that the dispute was too nebulous or that the short time between detailed particulars and adjudication was insufficient. The court inferred that Ardmore's failure to respond substantively amounted to non-admission, crystallising the dispute.

On jurisdiction, the court analysed the meaning of "under the contract" in the adjudication clause, considering the House of Lords' decision in Fiona Trust and subsequent cases. It concluded that the Fiona Trust principle applies equally to adjudication clauses despite statutory underpinning, favoring a broad interpretation that includes tort claims like those under the DPA 1972. The difference in wording between adjudication and arbitration clauses was not found to indicate a narrower scope for adjudication. The court also found reinforcement in specific contract clauses deeming the contractor liable under the DPA 1972.

Regarding natural justice and fairness, the court acknowledged the challenges of a 20-year-old dispute but found no material breach of natural justice. It held that Ardmore's lack of documentation resulted from poor record-keeping and failure to investigate or inspect the site timely, rather than inherent unfairness in the adjudication process. BDW's disclosure was found reasonable and proportionate, with the adjudicator exercising powers to require further information. Ardmore failed to demonstrate that any alleged lack of disclosure was material to the outcome.

Finally, on the allegation that the adjudicator deliberately ignored a material defence, the court found this defence was not properly raised during adjudication and amounted merely to a critique of reasoning. The adjudicator addressed all issues presented, and no material breach of natural justice was established.

Overall, the court found no real prospect of success for the Defendant on any ground and no compelling reason for a trial.

Holding and Implications

The court's final decision is to GRANT SUMMARY JUDGMENT in favor of the Plaintiff ("BDW"), enforcing the adjudicator's decision requiring the Defendant ("Ardmore") to pay damages in the sum of £14,539,243.45, together with interest and costs.

This decision directly enforces the adjudicator's award and confirms that adjudication provisions should be interpreted broadly in line with the Fiona Trust principle, including claims under the Defective Premises Act 1972. The ruling clarifies that natural justice challenges in adjudication enforcement require a high threshold of material breach, especially where the adjudicator has exercised powers to ensure fairness. No new precedent is established beyond applying existing principles to the facts of this case.