A significant ruling relating to building safety was handed down on Monday in BDW Trading Limited v Ardmore Construction Limited, with ramifications for the entire construction industry and all those involved in housebuilding industry, lawyers say.
In short, BDW can now revive a stale contractual claim from a project 20 years ago – making it qualify for adjudication.
Mrs Justice Joanna Smith, sitting in the Technology & Construction Court, handed down judgment in BDW Trading Limited v Ardmore Construction Limited, enforcing the decision of an adjudicator, John Riches, that Ardmore deliberately concealed missing cavity barriers from BDW and others when it constructed the 280+ unit apartment at Crown Heights in Basingstoke between 2004 and 2006.
Ardmore had argued that the adjudicator had no jurisdiction to hear the claim. The judge disagreed.
Mark Pritchard, partner at law firm Howard Kennedy, who leads the team representing BDW, said: “This is a hugely significant ruling for the construction industry as a whole and for any parties engaged in house-building. We now have clarity that both claimant house-builders and their defendant contractors can refer to adjudication all the building safety cases which have threatened to clog up the courts for the next 10 years or more.
“The decision is consistent with public policy, as the government looks to release pressure on the courts system by directing certain types of cases away to other forms of dispute resolution. Moreover, it reflects the recent development of case law in relation to adjudication business where, through cases such as Murphy v Mayer, Aspect Contracts v Higgins and Bresco, the courts have sought to extend the ambit of adjudication.
“Crucially this ruling has confirmed that a party to a construction contract, who can bring an adjudication at any time, may do so after the usual contractual limitation periods expire.”
Ardmore said: “We fundamentally disagreed with a number of aspects of the adjudicator’s decision (including the finding concerning alleged deliberate concealment) and therefore challenged BDW’s enforcement proceedings on a number of grounds, including jurisdiction and natural justice.
“We are disappointed the court decided that Ardmore’s grounds for challenge did not meet the high bar needed to resist enforcement of an adjudicator’s decision, in particular that BDW could refer a dispute such as this under the Defective Premises Act and the inherent unfairness inevitably associated with referring such an historic project to adjudication. Those matters were of wider importance to the industry, as such the court’s judgment will be of interest to many. Notwithstanding that disappointment, we shall however be complying with the court’s judgment in accordance with its order.
“In any event, it remains that the adjudicator's decision is only temporarily binding until the dispute is finally resolved by way of arbitration, preparations for which are under way. Ardmore considers that there remain important legal questions to be determined, including the employer’s responsibility for specifying potentially non-compliant systems and the reasonableness of remedial works proposed which can only be fairly be determined in arbitration with proper disclosure and expert investigation. We also await with interest the Supreme Court’s judgment in BDW v URS, given that the grounds of appeal touch on the issues in this case and could be determinative.”
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