Home Group Ltd v MPS Housing Ltd

[2023] EWHC 1946 (TCC)

Home sought summary enforcement of an adjudication decision of some £6.6million. This adjudication followed an earlier one which held that MPS had repudiated the Contract.

The Referral, served on 17 March 2023, included a quantum expert report of 155 pages, with 76 appendices, which comprised 202 files in 11 sub-folders, amounting to 338 megabytes of data and a further 2,325 files in 327 sub-folders and five factual witness statements (which amounted to 88 pages, with hundreds of exhibited pages sitting behind). MPS had 19 days (or 13 working days) to produce its response to the Referral. It claimed at the time, and now, that this was an inadequate period of time. MPS said that it was unable to properly digest and respond to the material served with the Referral and that this was a breach of natural justice which led to a material difference in the outcome, and that, as such, the Decision was unenforceable. MPS said that Home should simply have provided MPS with a greater opportunity to understand the claim, whether in advance of the Notice of Adjudication or by agreeing to an extended timetable in the adjudication.

Mr Justice Constable noted that MPS “rightly” did not press a submission that the dispute was intrinsically so complicated or heavy that, in no circumstances, could it have been subjected to adjudication. Such a contention would, in any event, have failed. The relevant issue where the adjudicator had considered the position, but expressed the clear ability to render a fair decision, would inevitably centre upon the timing of the provision of the material to the responding party, and its ability to fairly put its case, rather than the complexity of the material.

The Judge noted that the authorities demonstrate that arguments based upon time constraints impacting the ability to respond fairly have enjoyed little success. Both complexity and constraint of time to respond were inherent in the process of adjudication and are no bar in themselves to adjudication enforcement. Whilst it was conceivable that a combination of the two might give rise to a valid challenge, where an adjudicator has given proper consideration at each stage to these issues and concluded that they can render a decision which delivers broad justice between the parties, the court will be extremely reticent to conclude otherwise. Further:

“In cases involving significant amounts of data, an adjudicator is entitled to proceed by way of spot checks and/or sampling. The assessment of how this should be carried out is a matter of substantive determination by the adjudicator and an argument that the adjudicator has erred in his or her approach, absent some particular and material related transgression of natural justice, will not give rise to a valid basis to challenge enforcement. It would, even if correct, merely be an error like any other error which will not ordinarily affect enforcement.”

There was a question over whether the volume of material served with the Referral would fill 7 or 32 standard boxes. The Judge noted that, regardless, the quantity of information itself did not present a valid basis for challenging enforcement. Further: “in the modern day, conceptualising the extent of electronic data by what it would look like printed will rarely be particularly persuasive or helpful, particularly so where a large quantity of the ‘documentation’ is in spreadsheets which are not designed to be printed.”

The real complaint was that Home unreasonably refused to provide MPS with data or access to the underlying documents until the last moment and that, in light of the absence of the documents and lack of time, MPS and its expert were unable to fairly interrogate and respond to the material in the Referral. 

These submissions were without merit and it was “never realistic” to insist, particularly in the context of an imminent adjudication, that it would be necessary to provide detailed information on each and every line item, and to use this as a reason not to engage in any analysis of the material provided on a sampling basis. When a draft report was provided, MPS could and should have been actively engaged in analysing the material including the underlying material to which they had been offered access. 

In the view of the Judge, had MPS responded by reserving its position in the first instance on the nature and extent of sampling but still requested access to review the underlying records, it would have been extremely difficult for Home reasonably to refuse. That had not happened, and it appeared that MPS’ responses leading up to the adjudication were strategically driven in an attempt to create a jurisdictional challenge that no dispute had crystallised.

Further, MPS had produced a comprehensive response which provided a clear agenda for determination of the dispute. MPS said that there was an absence of substantiation, and the adjudicator, in some circumstances, accepted this. That did not readily sit well with a submission now that MPS was materially prejudiced in its response. In the time available, MPS was able to identify significant areas of dispute and advance arguments based upon a sample of the material which drew attention to what it said were significant deficiencies in the claims. The Judge’s  review of the material suggested that MPS were able to, and did, properly and thoroughly engage in the substance of the claim, and indeed, enjoyed relatively significant success in undermining a number of high value aspects of the claim.

The Judge, accordingly, rejected MPS’ submission that by reason of the volume of material, constraints of time, and access to material, (whether taken separately or in aggregate), there had been any, or any material, breach of natural justice.

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