Dispute With Builder Leads to Costly Outcome for Homeowner

If you are involved in a dispute with your builder, taking sound legal advice is by far the best means of ensuring that matters do not get out of hand. One householder who failed to take that sensible course found himself embroiled in costly legal proceedings and on the receiving end of a substantial bill.

The man engaged a building firm to deal with some persistent leaks in his basement. Rather than entering into a fixed-price contract, he orally agreed to pay the firm a daily rate for its work. After forming the view that the firm was disreputable, he dispensed with its services before the work was complete.

The firm's bill went unpaid and, after it referred the dispute to an adjudicator, he directed the man to pay the firm £6,456 for its work, together with his £3,726 fee. The man not having paid either of those sums, the firm launched High Court enforcement proceedings against him.

Ruling on the matter, the Court noted that the Housing Grants, Construction and Regeneration Act 1996 gives parties to a construction contract the right to refer a dispute to adjudication. Excluded from that provision, however, are contracts where the works concerned are to a residential dwelling occupied as a residence by one of the parties. On the face of it, therefore, the adjudicator had no jurisdiction to consider the dispute.

However, it is well established that, even where there is no formal jurisdiction, an adjudicator's decision will be treated as enforceable where both sides in a dispute have engaged fully in the adjudication process on the merits. The man had done just that and there was no question of him having been put under duress to participate. He had thus waived his right to challenge the adjudicator's decision on jurisdictional grounds and his ignorance of the law was no defence.

The Court also rejected the man's plea that the adjudicator had given an appearance of bias. He had been appointed by an independent third party, the President of the Chartered Institute of Building, and was adamant that none of the firm's personnel were known to him prior to the dispute being referred to him. It was also no part of the Court's role to second-guess the adjudicator's conclusions on the merits. The firm was granted summary judgment against the man in the full amount of the adjudicator's award.