J&B Hopkins Limited v A&V Building Solution Limited
We recently represented J&B Hopkins Limited in the case of J&B Hopkins Limited (“JBH”) v A&V Building Solution Limited (“A&V”) [1] in which the Technology & Construction Court (“TCC”) was required to consider the enforcement of an adjudicator’s final account decision.
The party names will sound familiar to some as this judgment follows on from the Court of Appeal’s judgment last month (A&V v JBH [2]) which considered issues including the appropriateness of using of Part 8 proceedings as a defence to an earlier adjudicator’s decision concerning an interim application for payment, and the validity of an interim application for payment.
Although the appeal was ultimately successful as, based on the interpretation of all of the payment provisions of the sub-contract, including those set out in an appendix to sub-contract, the interim payment application was valid, the Court of Appeal nevertheless agreed with JBH that its use of Part 8 was not an abuse of process.
Furthermore, while the Court of Appeal hearing took place two days before the final account adjudication enforcement hearing, the Court of Appeal recognised that, as the final account adjudication had been resolved in favour of JBH, the appeal was largely academic from a financial point of view. Any entitlement to enforce an earlier adjudicator’s decision based on an interim payment cycle had long been overtaken by the subsequent final account adjudication. Furthermore, arguments raised regarding the proper operation of the payment provisions in the sub-contract had not been raised at first instance. These features were reflected in the Court of Appeal’s order that there should be no order as to costs of the proceedings.
The TCC has now handed down judgment granting JBH’s application for enforcement of the final account adjudication decision which is summarised below.
Background
JBH was appointed as M&E contractor as part of a project for the construction of new student accommodation at the University of Brighton’s Mouslecoomb University Campus at Lewes Road, Brighton.
By a sub-contract dated 18 December 2019, JBH engaged A&V to carry out certain plumbing installation works.
A&V referred a dispute, concerning the true value of the final account under the sub-contract, to adjudication seeking a determination that a further sum of £455,526 was payable from JBH to A&V.
Under the adjudicator’s decision, the adjudicator decided that the true value of the Sub-Contract Works was £289,182 which, taking into account previous payments by JBH to A&V, meant that a balance of £82,956 was payable from A&V to JBH. In other words, A&V had been overpaid for the works completed. A&V was also required to pay the adjudicator’s fees in full.
A&V refused to comply with the decision. JBH settled the adjudicator’s fees and issued proceedings seeking summary judgment by way of enforcement of the decision.
Defendant’s grounds for resisting enforcement
A&V resisted enforcement on 2 main grounds. Firstly, as JBH was the responding party in the adjudication, the adjudicator had no jurisdiction to order a payment to JBH. Secondly, A&V argued that the decision ought not to be enforced as the adjudicator had, according to A&V, made a number of errors in his assessment of the evidence and in his valuation of the final account.
Judgment
In his judgment Mr Roger Ter Haar KC (sitting as a Deputy High Court Judge) considered and applied the relevant principles in deciding an adjudication enforcement application. These principles were helpfully summarised by Fraser J in J&B Hopkins Limited v Trant Engineering Limited, to which the judge referred, including Fraser J’s following comments:
“There are on contested enforcement applications, therefore, two bases only upon which a decision will not lead to summary judgment as the jurisprudence is conventionally understood. These are if the decision was one made without jurisdiction; and the other is if the decision was made in the presence of material breaches of natural justice.” [3]
The Judge accepted JBH’s arguments that an adjudicator does not need to provide an answer to each and every issue raised in submissions, and an inadvertent failure to consider an issue or a particular document will not ordinarily amount to a breach of natural justice and render a decision unenforceable. Having addressed A&V’s specific grounds of dispute, the Judge confirmed “there is nothing in the matters raised before me which crosses the threshold so as establish a breach of natural justice which would justify me in refusing to enforce the Decision.”
Finally, the Judge confirmed that the adjudicator’s conclusion that a sum had become due to JBH was legitimate. The Decision was enforced accordingly with summary judgment awarded in JBH’s favour.
Analysis
The Judgment in this case re-emphasises that, absent clear issues with jurisdiction or a material breach of natural justice, the Courts will enforce adjudicator’s decisions.
Reference