The claimant employer, Octoesse, brought Part 8 proceedings against the defendant contractor, Trak Special Projects, following an adjudication decision. This case reviewed status of a final certificate with the employer’s pay less notice and considered what costs could be recoverable in adjudication enforcement proceedings.

The parties had entered a standard form JCT Intermediate Building Contract (2011 Edition) for the construction of residential and retail units in London. As the works were not complete by the completion date, the contract administrator issued a certificate of non-completion. Although the works were certified as practically complete about four months later, the administrator granted the contractor’s request for extension of time.  No further certificate of non-completion was issued. After the final certificate, the employer issued a pay less notice deducting liquidated damages of £89,250.

The contractor commenced adjudication arguing that the pay less notice was invalid.  The adjudicator held that, under sub-clause 2.23.1 of the contract, it was an express condition of the employer’s entitlement to give notice and to deduct liquidated damages. However, the administrator’s certificate of non-completion under clause 2.22 became null as the certificate of non-completion had been cancelled when a further extension of time was granted.  Therefore, the adjudicator decided that the employer was not entitled to deduct liquidated damages.

The employer in its Part 8 claim sought declarations as to the construction of clauses 2.22 and 2.23 where its pay less notice had been valid.  The employer argued that the purpose of clause 2.22 was to put the contractor on notice that the employer might levy liquidated damages.  It was not necessary for the administrator to issue a further notice of non-completion as the practical completion had already been achieved before the extension of time had been granted and the contractor was fully aware of its potential liability for liquidated damages.

As the contractor had instructed claims consultants in the litigation, the employer challenged contractor’s claims consultants’ costs. The employer argued that, in line with Agassi v Robinson (Inspector of Taxes) (Costs) [2005] EWCA Civ 1507, the contractor’s claims consultants’ costs were not recoverable as they were neither work done by the contractor, as litigant in person, nor disbursements which would have been allowed if made by a legal representative.

Jefford J in the TCC held that the employer was not entitled to deduct liquidated damages from the sum set out in the final certificate, the employer’s pay less notice was held invalid.  The court concluded that the use of “shall” in clause 2.22 of the JCT IBC imposed a mandatory obligation on the contract administrator to issue a certificate of non-completion if the contractor failed to complete the works by the completion date.  In the instant case, the certificate of non-completion was cancelled when a further extension of time was granted by the contract administrator.  As a result, the condition in clause 2.23 was not fulfilled.  Declining the declaratory relief sought by the employer, the adjudicator’s decision was enforced and the sums awarded by him ordered to be paid to the contractor.

Reviewing a number of judgments, particularly Agassi v Robinson (Inspector of Taxes) (No.2) [2005] EWCA Civ 1507 and NAP Anglia Ltd v Sun-Land Development Co. Ltd [2012] EWHC 51, Mrs Justice Jefford considered the question of what costs the contractor could recover in the adjudication enforcement proceedings.  The court concluded that costs incurred by claims consultants assisting a litigant in person will usually be recoverable in adjudication enforcement proceedings, assuming the same consultants represented that party in the adjudication.  Such costs would usually fall within the meaning of disbursements in CPR r.46.5(3)(a).