Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd

An adjudicator’s decision should be enforced unless the question decided was not the question referred or the adjudicator acted in excess of jurisdiction or with serious procedural unfairness. A construction payment application may constitute both an application under the contract and a claim for payment, even where it contains detailed valuation material. Where the employer fails to give the contractually required payment notice, the contractual consequence may be that the sum stated in the application becomes payable. The employer cannot rely on its own failure to trigger an invoice requirement and defer payment indefinitely. A dispute may crystallise from the surrounding circumstances, including silence or an inadequate response. The claimant need not have relied expressly on every contractual provision later used in the adjudication if the issue falls within the underlying claim and dispute.

Ringway sought summary judgment to enforce an adjudicator’s decision requiring Vauxhall to pay £1,303,704.95 plus VAT, interest and the adjudicator’s fees. The adjudication concerned Ringway’s Interim Application No. 11 under a construction contract incorporating amended JCT terms.

Vauxhall challenged jurisdiction, contending that the application was merely a valuation exercise, that no dispute had crystallised, that Ringway had not previously relied on the relevant payment provisions, and that no invoice had been submitted. It also advanced waiver, estoppel and substantive valuation arguments. The central issue was whether the adjudicator had jurisdiction to decide that, because Vauxhall had not served timely payment and withholding notices, Ringway was entitled to payment under the contractual mechanism.

1. Enforcement. The court held that the adjudicator had jurisdiction and that his decision dated 14 August 2007 was enforceable. The policy of the Housing Grants, Construction and Regeneration Act 1996 requires adjudicators’ decisions to be respected and enforced unless the question decided was not the question referred or the adjudicator acted in excess of jurisdiction or with serious procedural unfairness. Technical jurisdictional arguments require careful examination, but the court should not conduct a rehearing of substantive defences.
2. Nature of the application. Interim Application No. 11 was plainly an application for interim payment under the contract. Its detailed valuation material did not alter its commercial purpose. It was a claim to be paid the sums stated in it.
3. Payment mechanism. Clause 30.3.3 imposed a mandatory obligation to give a payment notice. Clause 30.3.4 provided a discretionary withholding mechanism dependent on the payment notice. Under clause 30.3.5, failure to give the required notice obliged the employer to pay the amount stated in the application. Section 110 of the Housing Grants, Construction and Regeneration Act 1996 reflected the purpose of requiring the basis of any disagreement to be identified.
4. Invoice. On the proper construction of clause 30.3.6.1, an invoice and final payment date depended on the employer first serving the clause 30.3.3 notice. The employer could not rely on its own breach to defer payment indefinitely. No additional demand for payment was required.
5. Crystallisation and scope of the referral. A dispute had crystallised by 27 June 2007, when Ringway claimed the sum in the application and Vauxhall’s agent indicated that substantially less was due. The dispute referred was whether Ringway was entitled to payment of the sum claimed. Reliance in the adjudication on clauses 30.3.3 and 30.3.5 did not create a different dispute. Vauxhall’s invoice, waiver, estoppel and valuation points were substantive defences which could be raised in the adjudication, not jurisdictional bars to enforcement.
6. Disposition. Ringway’s application under CPR Part 24 succeeded. Judgment was entered for Ringway in claim HT 07 305 and Vauxhall’s claim HT 07 296 was dismissed.

This was a first-instance decision on applications concerning enforcement of an adjudicator’s decision. The judgment records no earlier court decision in the same proceedings.