Mr Lam engaged Tera to demolish a house and to construct two new houses. Disputes arose over Tera’s right to an extension of time, outstanding defects and Tera’s final account. Tera subsequently referred the matter to adjudication. The Adjudicator determined the date of practical completion and made a decision in Tera’s favour. Tera sought to enforce the decision which Mr Lam resisted on the grounds that (a) the Adjudicator had exceeded his jurisdiction; (b) he had a claim for outstanding and defective work; coupled with (c) the alleged impecuniosity of Tera. The latter two grounds were coupled together. It was accepted that the mere assertion of a counterclaim would not of itself have been sufficient to avoid judgment.

The decision was enforced. Having considered the notice of adjudication, the Judge considered that the Adjudicator had not come to any decisions outside those identified as the subject matter of the dispute. For example, the question of whether a notice of determination was valid or not was necessarily bound up with the question, which was clearly part of the notice, as to whether or not there had been practical completion. In other words, any default under the contract must have occurred before practical completion in order for notice to be capable of being served.

A stay was not granted as the adjudication related to events prior to practical completion. The counterclaim issues were said to have arisen after practical completion. There was also considerable doubt as to both the liability and quantum of the counterclaim raised. Part of the claim related to snagging which was a matter which could have been raised during the adjudication. Whilst it was true that Tera appeared to have some financial difficulties, there was evidence that these difficulties had been caused by the non-payment of the adjudication award and there was no evidence that Tera was in a worse position now than it was when the contract was entered into.