Rights and remedies: PT Building Services v ROK Build

A party to a legal dispute must decide on a course of action to take which will best protect its interests. By Gary Peters of Brewer Consulting.

Summing up

The case: PT Building Services Limited -v- ROK Build Limited [2008] EWHC 3434 (TCC)

The issue: Is a party irrevocably bound by its chosen course of action?

The implication: A party who elects to accept the benefit under an instrument (such as an adjudicator's' decision) will be bound and prevented from either acting inconsistently with it or from subsequently electing to present a different argument to obtain another benefit.

A party to a dispute is likely to be presented with alternative courses of action and it will have to choose which of those alternatives best protects its interests. Such choices could have serious consequences as a disputant may be irrevocably bound by its choice, preventing it from subsequently changing its position, or from escaping the unintended consequences of its choice.

Such situations are subject to the law on election this doctrine is more commonly known by the phrases "approbation and reprobation" or "blowing hot and cold". In cases where the doctrine applies, a party has a choice of two rights, both of which it is at liberty to choose and when one of those rights is chosen, that party cannot afterwards act inconsistently with its choice or assert the other right.

A party will be held to its election and will not be allowed to depart from it. This matter has arisen in some recent cases in connection with adjudication enforcement proceedings.

In the case of PT Building Services Limited -v- ROK Build Limited, PTB sought enforcement of an adjudicator's decision. ROK opposed enforcement on a number of grounds. For various reasons, ROK considered that the adjudicator had no jurisdiction but it participated in the adjudication reserving its position as to jurisdictional matters. PTB issued a second notice of adjudication.

ROK argued that the second adjudicator had no jurisdiction, as the dispute referred was the subject of the previous adjudicator's decision ROK relied on this argument in persuading the second adjudicator to resign.

PTB argued that by taking the benefit of the adjudicator's decision and using it to persuade the second adjudicator to resign, ROK had elected to take the benefit of the decision and could not now assert that it was not valid and binding. ROK argued it had made no election which prevented it from being able to challenge the decision.

The judge decided that by relying on the first decision in persuading the second adjudicator to resign, ROK had elected to treat the first decision as a valid and binding decision, and that ROK had obtained a clear benefit (resignation of the adjudicator) by relying on that decision and it could not now challenge it in enforcement proceedings.

Recovery of fees

A similar situation arose in the case of Christopher Michael Linnett -v- Halliwells LLP, which concerned recovery by an adjudicator of his fees and expenses from Halliwells. Halliwells considered that it was not liable to the adjudicator for his fees and expenses, arguing that the adjudicator had no jurisdiction to decide the dispute referred to him.

However, in connection with a second adjudication, Halliwells relied on the decision in the first adjudication. In doing so Halliwells obtained the benefit of the first decision in the second adjudication and it could not now assert that the adjudicator did not have jurisdiction to make the first decision. Accordingly, Halliwells was bound by the first decision.

Another case in which this principle featured was Redworth Construction Ltd -v- Brookdale Healthcare Ltd. Redworth sought enforcement of an adjudicator's decision, which was opposed by Brookdale owing to there being no contract in writing.

In enforcement proceedings, Redworth sought to rely on documents which it did not rely upon when arguing the lack of a written contract jurisdictional issue in front of the adjudicator.

It was held that where a party seeks to put its argument in a certain way in order to obtain a benefit (i.e. an adjudicator's decision), which it did in fact obtain, then, following the principle of election, it would not be just to allow that party to depart from that election or to depart from its original argument in order to subsequently elect to present a different argument to obtain another benefit.

In the event, Redworth could not rely upon documents not previously raised in order to support the adjudicator's decision that he had jurisdiction. The decision was not enforced as no written contract existed.

A party who elects to accept the benefit under an instrument (such as an adjudicator's decision) will be bound and prevented from either acting inconsistently with its election or from subsequently electing to present a different argument to obtain another benefit.

In respect of an adjudicator's decision, a party cannot both assert that an adjudicator's decision is valid and at the same time challenge its validity. A party must elect to take one course or the other.