Ashfords Solicitors - Enforcement of an Adjudicator's Decision

The facts were as follows. The parties entered into a JCT contract in September 2006. A dispute arose, which was referred to adjudication. The adjudicator required Charba to pay Avoncroft £56,380 by 21 February 2008. Charba issued a withholding notice on 15 February 2008 after the adjudicator had issued his decision. Avoncroft issued proceedings and made an application for summary judgment. Charba resisted on the basis that it was entitled to set off LADs. Alternatively, Charba sought a stay of execution/an order that the money be paid into court pending the outcome of a second adjudication.

The Court considered the following:

Was Charba entitled to LADs at all?
Was Charba entitled to set off its claim for LADs against the sum awarded by the Adjudicator?
Was Charba's withholding notice valid?
Should there be a stay/should the monies be paid into Court?

The Court held that:

Charba was not entitled to LADs - the LADs clause in the contract failed according to the principle in Bramall & Ogden. There was no provision in the contract for sectional completion and Charba had taken partial possession of some elements of the works.

Even if Charba had been entitled to LADs, it was not entitled to set these off against the sum awarded – the Adjudicator had not decided the question of entitlement to LADs and there was no express provision in the contract entitling Charba to deduct and withhold them.

The withholding notice had been served six days before the final date for payment of the amount awarded. It was out of time. Charba's argument that express provision was not made for a withholding notice under the contract in these circumstances was rejected - the nature of enforcement of Adjudicator's decisions is contractual and failure to comply is a breach of the express term of the contract requiring the parties to comply with the decision. The sum was therefore due. If the contract made no provision for service of a withholding notice against the decision of an Adjudicator S.111 of the Housing Grants, Construction and Regeneration Act 1996 should be looked to.

There were no grounds for a stay to await the outcome of a second adjudication or to order Avoncroft to pay the judgment sum into Court.

This is a recent example of the Courts' reluctance to refuse to enforce an adjudicator's decision.

If anyone has any queries arising out of this article I can be contacted at s.homer@ashfords.co.uk.

Key Contacts

Enforcement of an Adjudicator's Decision

Introduction