Court of Appeal overturns Amec v Whitefriars case

Amec has won its appeal against Whitefriars City Estates, and has been awarded nearly £600,000 for unpaid work.

In October 2000, Amec Capital Projects was engaged by Whitefriars to provide pre-construction works as part of a two-stage tender in connection with a building development in Tudor Street, London EC4.

Amec carried out the works and in May 2001 was given possession of the site. It submitted its second stage tender the following month, but was unable to agree a price with Whitefriars. In July, the client terminated the contract.

Amec’s last two invoices totalling £508,401 went unpaid. In April 2003, Amec’s solicitors gave notice of adjudication, claiming the unpaid amount plus VAT and interest.

Michael Biscoe, of Biscoe Associates, was appointed adjudicator. He found in favour of Amec, stating that Whitefriars should pay the group £717,885.

However, Whitefriars refused to pay, claiming Biscoe had no jurisdiction because he had not been appointed in accordance with the terms of the contract and that he had acted in breach of the rules of natural justice.

Under the terms of the contract, the adjudicator should have been "George Ashworth of Davis Langdon & Everest or in the event of his unavailability a person nominated by him". His Honour Judge Humphrey Lloyd QC accepted Whitefriars’ position.

Amec sought a second adjudication in October 2003 for the unpaid sum, noting that "there is no George Ashworth at Davis Langdon & Everest; the only Mr Ashworth who could be identified at Davis Langdon & Everest was a Geoffrey Ashworth who sadly died a few weeks ago". Amec’s solicitors contended that in light of this an adjudicator should be appointed by the Royal Institute of British Architects.

Biscoe was nominated to handle the second adjudication. He issued his second decision in December, once again finding in favour of Amec, which claimed a sum of £597,371.

Again Whitefriars refused to pay, stating that the adjudicator should have been nominated by the partner managing Ashworth’s practice and that Biscoe’s decision was void because he had committed several breaches of natural justice.

In February this year His Honour Judge Toulmin QC dismissed the first part of the claim, but accepted that there had been breaches of natural justice.

Amec then turned to the Court of Appeal and the case was heard on 28 October. The court accepted that Biscoe had jurisdiction in the matter and overturned Judge Toulmin’s decision that there had been breaches of natural justice.