R J Knapman Ltd. v Richards & Ors

An adjudicator’s decision under a construction contract should generally be enforced pending final determination, even where one party is alleged to have failed to comply with another part of the decision. A possible remedy for non-compliance does not justify withholding a sum awarded by the adjudicator.

Liquidated damages may be set off only where entitlement to a specific sum follows logically from the adjudicator’s decision. That consequence does not arise where the adjudicator has not conducted an exhaustive review of delay, the relevant extension claim was not referred, or a contractual certificate required as a condition precedent has not been issued.

The claimant contractors sought judgment enforcing an adjudicator’s award of £19,339.93, representing repayment of liquidated damages and interest. The defendants resisted enforcement, arguing that the claimant was seeking to enforce only the favourable parts of the decision while rejecting adverse findings, and that further liquidated damages could be set off against the award.

The adjudicator had found that the claimant was responsible for supplying the windows and doors, that practical completion had not been achieved, and that the claimant was entitled to a 13-week extension of time. The central issues were whether partial enforcement was impermissible and whether the adjudicator’s decision logically established an entitlement to further liquidated damages.

1. Enforcement. The claimant was entitled to judgment for £19,339.93. The general principle, stated in Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] B.L.R. 93 and reaffirmed in Carillion Construction Limited v Devonport Royal Dockyard Limited [2005] EWCA Civ 1358, required enforcement of the adjudicator’s decision unless a recognised jurisdictional or natural justice ground existed.

2. The approbation and reprobation principle did not prevent enforcement. The defendants’ complaint that the claimant had shown reluctance to comply with findings about the windows and doors was capable of giving rise to a contractual remedy under clause 9A.7.3. It did not justify refusing to enforce the separate money award. The decision had to be complied with as a whole, but possible non-compliance was not an appropriate reason to deny enforcement of the sum awarded.

3. Applying the principles in Balfour Beatty Construction v Serco Limited [2004] EWHC 3336 (TCC) and William Verry Limited v The Mayor and Burgesses of the London Borough of Camden [2006] EWHC 761 (TCC), set-off was available only if entitlement to a specific sum of liquidated damages followed logically from the adjudicator’s decision.

4. No such entitlement followed. The adjudicator had expressly confined his consideration to three identified delaying factors and had not undertaken an exhaustive review. The claimant had not referred an alternative claim for an extension beyond 30 April 2006. The court therefore could not infer that the claimant had no entitlement to any further extension.

5. The contractual clause 2.6 certificate was a condition precedent to deducting liquidated damages. No such certificate had been issued. The adjudicator’s decision was not equivalent to that certificate, particularly since the adjudicator had expressly declined to consider all delaying matters. The court should not assume that adjudication had displaced existing contract machinery unless the adjudicator had expressly, or clearly implicitly, been asked to decide a matter ordinarily entrusted to that machinery.

6. The defendants’ set-off failed. Judgment was entered for the claimant in the sum awarded, payable with interest within 14 days in the absence of an application to stay execution.

First-instance decision. No prior appellate decision is stated in the judgment.