TCC confirms – employer must pay “smash and grab” decision and cannot rely on subsequent “true value” adjudication

The TCC has handed down its first decision in a case regarding cross adjudications since the Court of Appeal’s decision in S&T (UK) Limited v Grove Developments Limited [2018] EWCA Civ 2448 (see our previous article here).

In M Davenport Builders Limited v Mr Colin Greer, Mrs Julia Greer [2019] EWHC 318 (TCC) Mr Justice Stuart-Smith applied the decision in Grove in an application for summary judgment to enforce an adjudicator’s decision.  Davenport carried out construction work for Mr and Mrs Greer. Following the failure by Mr and Mrs Greer to issue a Pay Less Notice, Davenport successful brought a “smash and grab” adjudication and was awarded £106,160.84.  Immediately after the first decision, Mr and Mrs Greer started their own “true value” adjudication. 

When Davenport sought to enforce the smash and grab award, Mr and Mrs Greer attempted to rely on the second adjudication by way of set off against the first decision.

In an approach which goes back to the principles of the Construction Act, as well as relying on the decisions in Grove and Harding v Paice [2015] EWCA Civ 1231, Stuart-Smith J concluded that it seems to me consistent with the policy underlying the adjudication regime that a defendant who has discharged his immediate obligation should generally be entitled to rely upon a subsequent true value adjudication and that a defendant who has not done so should not be entitled to do so”. Stuart-Smith continued “the decisions of Coulson J and the Court of Appeal in Grove are clear and unequivocal in stating that the employer must make payment in accordance with the…. before it can commence a 'true value' adjudication”.

In light of the above and the decision in Grove, Stuart-Smith gave summary judgment enforcing the first adjudication decision and refused to allow Mr and Mrs Greer to rely on the subsequent true value adjudication by way of set off.

Whilst this case adds nothing new to the detailed analysis by the Court of Appeal in Grove, this is the first case to apply Grove to a new set of facts and as such, this case acts as a further warning to employers that even where you have a “true value” adjudication decision, this will not prevent the courts from enforcing an earlier “smash and grab” decision.  The Judge did state, however, “That does not mean that the Court will always restrain the commencement or progress of a true value adjudication commenced before the employer has discharged his immediate obligation…” and some uncertainty therefore remains.  We await the next instalment in the smash and grab saga ….

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