See PFG Design Ltd v Masma Ltd9
A number of issues arose for decision and were pursued as jurisdictional matters whereas in
reality a number of them were challenges to the adjudicator’s findings.
The facts were simple enough. PFG provided design services to Masma based on an oral contract, the
date and terms of which were in dispute. As part of its remuneration it claimed a ‘success fee’ and
submitted an invoice for £48,500.
The first issue for the adjudicator was whether there was a contract and whether it was
entered into before or after October 2011. If before that date, the adjudicator had no jurisdiction
to determine the dispute based on a contract that was not in writing. The adjudicator
concluded there was a contract made in January 2012: there was ample material for that
conclusion. Once he had so decided, jurisdiction was founded and he was entitled to go on to
decide upon the particular terms of the contract and to determine the dispute.There was
plainly a contract that post dated October 2011 and that was an end of Masma’s
jurisdictional argument.
The adjudicator decided as a matter of fact, contrary to Masma’s case, that the
claimed success fee was not dependent upon the sale of the site to which the services related.
He further concluded that the amount of the success fee was agreed at a meeting in October 2016 in
the sum of £20,000. The Court held that the fact that PFG had invoiced a greater sum did not prevent him from
making that finding.
Masma argued there was more than one dispute. The Court disagreed finding it was clear
there was single dispute regarding the success fee.
Masma also argued that the adjudicator’s finding that the success fee was £20,000, when
Masma’s invoice was for more than twice that amount, and neither party had contended
that the success fee was £20,000, was a breach of natural justice. The Court held that where
the parties contended for different figures the adjudicator was entitled to decide the amount and
there was written material on which he could base his conclusion. He did not engage on ‘a frolic of
his own’ where a point had been argued, including where
one party argued a point and the other did not come back on it. It was not uncommon for an adjudicator to decide on a figure that neither party had put forward. Masma had referred to the figure of £20,000 in correspondence. The adjudicator was not
limited to awarding only the figure claimed in an invoice. That would stretch the concept
of natural justice.
An argument that no dispute had crystallised also failed. That left the question of the recovery of
a small amount for fixed costs which is dealt with at section 3.
This article was originally written and published on the internet by Slater Heelis in 2018.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
BDAS specialise in: providing contract advice, resolving construction disputes, managing construction claims & adjudications and will give you competitive, independent advice tailored to your specific construction problems.
If you could benefit from this please call Jon now on 07795 231 231 or email: Jon@BDASweb.com