Level 1 Raised Flooring Limited (“Level 1”) employed JM Construction (SW) Limited (“JM”) under a construction contract in March 2021, which incorporated the JCT Minor Works Contract 2016 edition to carry out works to a property in London. The relationship between the parties broke down and as a result Level 1 terminated the contract in November 2021. Level 1 claimed there was an overpayment to JM immediately prior to termination. On this basis Level 1 commenced adjudication proceedings so that the adjudicator could determine the value of JM’s works and whether JM had in fact been overpaid by Level 1 in the sum of £180,053.13. 

Level 1 requested that the adjudicator determine the following issues: (i) what was the value of the work undertaken by JM at the date of termination? (b) was Level 1 entitled to make a deduction in respect of corrective works and, if so, how much? (iii) was Level 1 at that time entitled to payment and, if so, how much? In March 2022 the adjudicator decided that there was an overpayment to JM of £67,042.84. However, the adjudicator decided not to award payment because it was unclear if the termination was valid, if it was valid Level 1 would be entitled to follow the procedure in accordance with clause 6.7. Moreover, if the termination was valid, in the absence of an express provision which required a valuation of the Works and then entitles Level 1 to obtain payment at the date of termination, there is no entitlement to payment. Following the adjudicator’s decision Level 1 followed that procedure and produced an account in March 2023 which asserted that £350,050.82 was owed in total by JM to Level 1, including the adjudicator’s decision of an overpayment of £67,042.84. 

Level 1 submitted that the adjudicator decided there was an overpayment at the time of termination, which was supported by notification from the Architect. As such, once the procedure in accordance with clause 6.7 had been carried out, the Court ought to follow the adjudicator as to overpayment at termination which crystalised into an enforceable interim decision. Otherwise, Level 1 submitted this would result in a needless and wasteful requirement to go over old ground in a further adjudication. 

JM submitted that there is no independent power or inherent jurisdiction of an adjudicator to make awards, derived from the terms of the contract under scrutiny. JM argued that the adjudicator had merely conducted no more than a valuation of the work at that specific point in time and had in fact made a conscious decision not to award payment. Furthermore, JM stated that the adjudicator’s finding of an overpayment was based on the assumption that Level 1 had correctly terminated the contract. 

The judge agreed with JM and declined to enforce the adjudicator’s decision. He further said this is one of those rare cases where the Court should refuse to grant summary judgment because the Court considered there was in fact no decision of the adjudicator which was susceptible to enforcement. 

The key point to take away from this judgment is the importance of drafting the notice of adjudication, so that it is evident what issues the adjudicator is being requested to determine. Following the adjudicator’s decision Level 1 deemed any overpayment would be an enforceable sum which was payable by JM, however this was not the question Level 1 actually asked the adjudicator. Moreover, it is not for the adjudicator to guess the referring party’s desired outcome of an adjudication but for the referring party to be clear from the outset what it is they want from the adjudication.