Summary 

Kingsmead Homes Ltd, a main contractor (the “Defendant”) engaged Bexhill Construction Ltd (the “Claimant”) as a subcontractor to undertake labour only brickwork for a project in Warrington pursuant to a subcontract order signed on 17 September 2021. 

The Claimant applied to the courts for a summary judgement to enforce an adjudicator’s decision dated 15 February 2023, requiring the Defendant to make payment of £49,664.80 to the Claimant. 

Background

On 16 May 2022, the Claimant sent an application for payment number 8 (“Application No.8) in the sum of £49,664.80 to the Defendant. In response, on 23 May 2022 the Defendant sent an email to the Claimant which it asserted was a payless notice for Application No. 8. Further, it argued Application No.8 was not in line with Clause 6.9.1 of the subcontract agreement. Clause 6.9.1 required day work sheets to be submitted at the end of the day following the day the work was executed for signing. Any sheets submitted after this date would be rejected. Further the Defendant in its response stated in any event the works were included within the scope of work within the subcontract agreement. 

In response to the Defendant’s refusal to pay, the Claimant initiated adjudication proceedings. In its Referral the Claimant referred to Application No.8 and asserted that the JCT Short Term Subcontract 2016 terms were incorporated into the contract agreement. The Claimant further argued that the Defendant had failed to serve a valid interim certificate or pay less notice. 

In its Defence the Defendant argued the Claimants had not established any contractual basis for its claim. It rejected that the JCT terms were incorporated and argued that to the extent the subcontract terms did not comply with the Housing Grants, Construction and Regeneration Act 1996 (the “Act”), the Scheme applied. Therefore, there was no contractual basis for making a claim for payment under the subcontract agreement. 

The Claimant in response to this argued that if the Scheme did apply the Defendant had not served a valid payment or payless notice. 

In its Rejoinder the defendant argued the words ‘JCT’ did not sufficiently demonstrate the JCT terms were agreed and in respect of the application for payment, they contended that Application No.8 was: (i) not in accordance with section 110B(4) (b) of the Act; and  (ii) was not valid as it did not conform with Clause 6.10 of the subcontract agreement because the sums claimed were for additional work. 

On 15 February 2023, the adjudicator decided that the Claimant was entitled to £49,664.80, finding that the Scheme did apply (as agreed by both parties) and the Defendant’s payless notice was not compliant with the Scheme as the Defendant did not state the amounts due at the payment due date and the basis on which that sum was calculated.

After receipt of its decision the Defendant’s consultant emailed the adjudicator arguing the decision did not address the contents of its Rejoinder. In response, the adjudicator confirmed he had considered all submissions. 

Enforcement 

The Defendant’s refusal to pay led the Claimant to initiate enforcement proceedings which the Defendant resisted. In its Defence it argued that the adjudicator had breached the rules of natural justice on the basis that the adjudicator did not consider the contents of some of its Rejoinder in the adjudicator’s decision. The Defendant argued that by not considering these issues the adjudicator had breached natural justice. Further in its application to stay enforcement it alleged there was a risk, if the Claimant was required, it would not be in a position to repay the judgement sum and result in insolvency. 

Judgment 

The judge in these proceedings confirmed that there was no indication in the adjudicator’s decision that there was a deliberate exclusion of consideration of the Defendant’s defence, nor had the adjudicator failed to consider all the submissions. The judge noted that the adjudicator had stated that he had considered all the submissions but not all the submissions pertained to matters he had to decide. 

In regards to whether a stay of execution was successfully pleaded the judge noted that the ‘application’ was not directly submitted in the Defendant’s defence but was contained within a witness statement to the Defendant’s submissions. The judge concluded having failed to mention it in the pleadings it had not been sufficiently pleaded. 

Finally, the judge considered: (i)  whether a subsequent judgement requiring the Claimant to pay monies to the Defendant would go unsatisfied; and (ii) was there any evidence to prove special circumstances which would render it inexpedient to enforce the adjudicator’s decision. On the basis of the Defendant’s evidence the judge found the defendant had failed to establish on the balance of probabilities that there was a probable risk of the Claimant not being able to repay.

The judge granted the Claimant's application for summary judgment in the sum of £49,664.80 and dismissed Defendant's application for a stay of enforcement.

Practical Implications

This case outlines that adjudicators are not obliged to set out all submissions and arguments raised by the parties in their decision, nor are detailed reasons required unless necessary. 

Further where an adjudicator has set out in its decision or elsewhere that they have considered all the submissions, the courts will take this at face value.