The claimant was the main contractor for the construction of a building in Cardiff Docks. The defendant was a subcontractor who had to carry out a certain amount of steelwork. The steelwork required onsite welding during the course of which glass (that had already been installed by the claimant) was damaged. The dispute about payment of damages was referred to adjudication. The adjudicator ordered that within 7 days of the date of the decision the defendant was to make a payment to the claimant.

The defendant accepted that the decision was binding but tried to prevent enforcement by way of set-off. They argued that a withholding notice would normally only be given by the payer (main contractor), and not by the payee (sub-contractor). Section 111 would not apply to the present claim for compensation or damages brought by the contractor against the subcontractor. The defendant highlighted two requirements of s111(1) HGCRA 1996 that he argued were absent in this case:

(1) No payment “due under the contract” but only a payment due under the adjudication; and
(2) No final date for payment.

HHJ Moseley did not accept the defendant’s contentions. First he considered a contractual provision in the contract between the parties to the effect that the parties shall give effect to the decision of the adjudicator. In his opinion, that provision had the effect of making the sum payable “under the contract” for the purposes of s111.

The Judge rejected the second contention by holding that the order to make payment within 7 days constituted the final date for payment. HHJ Moseley referred to Outwing Construction v Randall and Macob Civil Engineering v Morrison in support of his judgement. Since no withholding notice was served by the defendant, a set-off was not available and the sum was due. Summary judgement was granted.