William Verry Ltd v London Borough of Camden

An adjudicator’s decision under the Housing Grants, Construction and Regeneration Act 1996 is binding and should ordinarily be enforced on an interim basis. A subsequent final certificate, disputed valuation, or unliquidated counterclaim does not ordinarily justify withholding payment or setting off sums against the adjudicated amount. Contractual provisions preserving other rights preserve the right to pursue later claims; they do not permit those claims to defeat immediate compliance with the adjudicator’s decision. A stay requires strong or special circumstances, including a serious risk that payment could not be recovered.

William Verry Ltd applied for summary judgment to enforce an adjudicator’s decision requiring the London Borough of Camden to pay £532,351.61 and interest. The decision concerned the amount due on an interim payment certificate at practical completion under a construction contract.

Camden relied on a later final certificate, a disputed claim for defects being pursued in a further adjudication, and concerns about Verry’s ability to repay. The central issues were whether those matters could supersede, defeat or justify a stay of enforcement of the adjudicator’s decision.

1. Enforcement of adjudicator’s decision. The court entered judgment for Verry for £532,351.61 plus applicable VAT and £3,409.12 interest. Under section 108 of the Housing Grants, Construction and Regeneration Act 1996, an adjudicator’s decision is binding on an interim basis and must be enforced pending final determination by adjudication, litigation or agreement. The contractual obligation must be construed to give effect to that statutory purpose.
2. Final certificate. The later final certificate did not supersede the adjudicator’s decision on the earlier interim certificate. Successive certificates could not be allowed to defeat an adjudicator’s decision. The clause preserving the parties’ other contractual rights meant that those rights remained available without prejudice, but did not authorise non-compliance with the adjudicator’s decision. The final certificate was in any event non-conclusive because the relevant matters were subject to adjudication proceedings commenced within the contractual period.
3. Defects counterclaim. The contract permitted deductions for defects in the valuation of the works. Camden had not, however, raised the disputed defects claim in the adjudication. It could not use an unliquidated counterclaim as a set-off against the adjudicated sum. Camden retained its right to pursue the defects claim and could enforce any later adjudication decision in its favour.
4. Stay. Enforcement should be stayed only where strong grounds or special circumstances made immediate enforcement inexpedient. Verry’s substantial turnover and cash reserves gave no serious reason to doubt recovery. The uncertain outcome of the pending defects adjudication was insufficient, and Camden’s application for a stay was refused.