All In One Building & Refurbishments Ltd v Makers UK Ltd

Whether a dispute has arisen for adjudication is a question of fact assessed by a rigorous but common-sense examination of the substance of the claim and response. Descriptive labels and contractual payment dates are not determinative. A claim may be disputed even though further evidence or particulars are needed to prove it. An adjudicator may request that evidence within the adjudication process.

Enforcement will not be refused for alleged breach of natural justice merely because the adjudicator resolved factual issues on the documents or reached a conclusion with which a party disagrees, provided the parties had a fair opportunity to make submissions. A stay of execution may be refused where the claimant’s financial weakness reflects the ordinary commercial risk of dealing with a small construction company rather than dissipation of assets.

All In One Building & Refurbishments Ltd was engaged as a building subcontractor by Makers UK Ltd. After a dispute about labour and site access, Makers notified an intention to determine the subcontract, and All In One treated Makers’ conduct as a repudiatory breach.

All In One referred claims for payment, overheads, profit and damages to adjudication. The adjudicator awarded sums to All In One. Makers challenged enforcement on the grounds that no dispute had crystallised, that the adjudicator had acted in breach of natural justice, and that execution should be stayed because All In One appeared unable to repay the award.

The issues were whether the adjudicator had jurisdiction, whether the procedure was unfair, and whether special circumstances justified a stay.

1. Dispute. A dispute is a matter of fact. The court must examine the substance of the claims and responses using a rigorous and common-sense approach. An express rejection, conduct, prevarication or silence may show that a claim is not admitted. The time needed before silence amounts to denial depends on the facts and contractual structure. A claim so nebulous that the respondent cannot sensibly respond to it will not ordinarily generate a dispute.
2. Here, the parties had joined issue on responsibility for termination and on the financial consequences. The first four heads of claim were sufficiently particularised. The overhead and profit claim was initially unsupported by detailed evidence, but its underlying entitlement could be accepted or rejected and had in fact been rejected. It was therefore a dispute within the adjudicator’s jurisdiction. The contractual periods for payment of interim or final accounts concerned when payment was due, not whether entitlement had been denied.
3. Natural justice. The adjudicator was entitled to assess the evidence and determine the repudiation issue within the adjudication scheme. Makers had opportunities to address the disputed statements and the proposed calculation of overhead and profit. The procedure was imperfect when compared with full litigation, but the court would not review the adjudicator’s factual reasoning or merits. No procedural unfairness causing prejudice was established.
4. Stay of execution. All In One was probably insolvent and its ability to repay was doubtful. Nevertheless, its financial profile was substantially the same as when Makers entered the subcontract. There was no evidence of asset dissipation to frustrate repayment. The financial risk associated with interruption of the cash flow of a small construction company was an ordinary commercial risk. Summary judgment was therefore entered for All In One and the stay was refused.