Sterling engaged Letchworth to carry out roofing work pursuant to a sub-contract order incorporating DOM/1. A dispute arose regarding Letchworth's interim application 5. Sterling refused to pay because, amongst other things, it claimed to be entitled to raise a cross-claim for delay. In the Referral, Letchworth requested that, regardless of the lack of a valid withholding notice, the adjudicator considered Sterling's delay cross-claim as a way of aiding the parties' future discussions of the final account.

In the Referral, issued on 9 December 2008, Letchworth anticipated an extension of time may be necessary given the impending Christmas period. Subsequently, Sterling applied for an extension to serve its Response. The extension was approved, and the adjudicator also extended the time for the date of the decision. The adjudicator set out, in multiple letters to the parties, his understanding of the proposed timetable, which incorporated a further 7 day extension to the 28 day statutory time limit. He also reserved the right to a further week if it proved necessary. Neither party raised any queries or challenges to this understanding at any stage.

The adjudicator awarded Letchworth £46,807.14 and found, as a declaratory decision only, that Sterling's delay cross-claim was worth £24,866.77.

The £46,807.14 formed the basis of an application to enforce, which was resisted by Sterling on two grounds. First it was said that the decision was issued out of time, and therefore was a nullity. Secondly, it was claimed that the adjudicator failed to deal properly or at all with the delay cross-claim and should have taken the £24,866.77 into account when awarding £46,807.14 to Letchworth.

With regard to the first issue, Mr Justice Coulson found that the decision was provided by the adjudicator within the 42 day period. Sterling's submission was held to be unarguable, as neither party ever suggested that the adjudicator's understanding of the timetable was incorrect, nor did they raise any point about the proposed date of the decision.

With regard to the second issue, the Judge discussed the relevant principles regarding the scope of the notice of adjudication. A dispute cannot be cut down or enlarged by subsequent documents without the agreement of the parties and the adjudicator. In addition, it has long since been accepted that if a responding party wishes to raise a cross-claim by way of a defence to a claim, a withholding notice is almost always required. Conversely, Sterling sought to argue that a responding party to an adjudication is entitled to raise any matter by way of defence which would amount in law or in fact to a defence to the claim being pursued.

The Judge held that while a defendant can raise whatever matters he likes by way of defence for the adjudicator to consider, that general principle does not permit a defendant to rely on a cross-claim which should have been the subject of a withholding notice, but was not.

"There is no doubt that [the Referral] is rather clumsily worded and … it was rather odd that the claimant was seeking guidance from the adjudicator on a matter that was expressly said to be relevant, not to the dispute being referred, but to the future consideration of the final account. Notwithstanding that, I am satisfied that, when taken together, these paragraphs [in the Referral] are confirming that, for the purposes of the adjudication, the only issue was the validity or otherwise of the withholding notice (as set out in the notice of adjudication), and that … the absence of a valid withholding notice meant that the cross-claim for delay in the adjudication must fail in its entirety. There was nothing in either the adjudication or the referral notice which suggested that the delay cross-claim, regardless of the withholding notice position, was being referred to the adjudicator for decision as part of his consideration of interim application 5."

The Judge held that although a defendant can seek to raise a cross-claim in circumstances such as these, if an adjudicator concludes that such a cross-claim required a valid withholding notice, and there was no such notice, then the adjudicator is acting entirely properly by not taking this into account when making an award to a claimant.

Accordingly, summary judgment was granted in favour of Letchworth.