Parsons entered into a sub-contract with Purac for the provision of odour abatement equipment. A dispute arose as to Parsons’s entitlement for payment. Purac refused payment on the grounds that Parsons had breached its contractual obligations. Parson succeeded in an ad hoc adjudication carried out in accordance with the terms of the sub-contract but not pursuant to the HGCRA 1996. Six days after the adjudicator’s decision was issued and before paying any money ordered in the decision, Purac served a withholding notice pursuant to the contract claiming that the costs to complete the works exceeded the sum owing under the adjudication decision.

It was Parson’s case that the adjudicator’s decision was enforceable on the same basis as if the HGCRA applied. Accordingly, Purac should not be allowed set-off.

HHJ Kirkham held that under the terms of the contract it was open to Purac to set off against the adjudicator’s decision any other claim they had against Parsons. She relied on clause 31 which she regarded as sufficiently wide to permit set off notwithstanding the statement in clause 27 whereby the decision of the adjudicator was final and binding. HHJ Kirkham applied the principle in KNS Industrial Services v Sindall Limited where other rights under the contract, which were not the subject of the adjudication decision, remain available to the relevant party. Parsons appealed against the decision (see above for summary and transcript of Court of Appeal decision).