PT Building Services Ltd v ROK Build Ltd

A party cannot both rely on an adjudicator’s decision as valid and challenge its validity. Reliance on the decision to prevent a second adjudication may amount to an election to treat it as binding.

A construction contract satisfies section 107 of the Housing Grants, Construction and Regeneration Act 1996 where its terms, including the mechanism for defining the work scope through later information or instructions, are evidenced in writing. A dispute may crystallise during negotiations where the parties’ positions show a substantive disagreement. A breach of paragraph 7(2) of the Scheme does not automatically invalidate an adjudication; its effect depends on the nature and seriousness of the breach and any resulting unfairness.

PT Building Services Ltd sought summary judgment to enforce an adjudicator’s decision requiring ROK Build Ltd to pay £314,242.18 plus interest. The adjudication concerned the valuation and payment of kitchen and bathroom works undertaken as part of the Harlow Decent Homes project.

ROK challenged enforcement on grounds including election, absence of a written contract under section 107 of the Housing Grants, Construction and Regeneration Act 1996, work allegedly falling outside the contract, lack of a crystallised dispute, non-compliance with paragraph 7(2) of Part I of the Scheme, breach of natural justice, and the adjudicator answering the wrong question.

1. Election. ROK had relied on the first adjudicator’s decision to persuade a second adjudicator that the same dispute had already been decided and that he should resign. That reliance gave ROK a benefit inconsistent with challenging the first decision. ROK had therefore elected to treat the decision as valid and could not approbate and reprobate it. Payment of the adjudicator’s fees independently supported the conclusion that ROK had elected to treat the decision on fees as valid.
2. Written contract. Section 107 of the Housing Grants, Construction and Regeneration Act 1996 requires the terms of a construction contract to be in writing or evidenced in writing. The meeting notes and related documents sufficiently recorded the contractual terms. The fact that the work scope was to be developed through later information and instructions did not prevent the underlying term from being evidenced in writing.
3. Single contract and scope. The works at the various properties were administered under the same contractual arrangements. The dispute was therefore one dispute under one construction contract, rather than multiple disputes under separate contracts.
4. Crystallisation and fairness. The parties’ discussions and correspondence showed a dispute about the proper valuation of the works. Additional detail in the second notice did not create a new dispute. ROK had a fair opportunity to respond, and the adjudicator adopted an approach based on material advanced by ROK.
5. Scheme compliance. Paragraph 7(1) of Part I of the Scheme reflects a fundamental adjudication requirement derived from section 108(2)(b) of the Act. Paragraph 7(2), concerning documents accompanying the referral notice, is an associated procedural requirement. Failure to provide the contract until the following day did not invalidate the adjudication or cause serious procedural unfairness.
6. Question answered. The adjudicator was entitled to determine the sums due on the applications for payment. The document described as a final account did not create a different question. ROK had no real prospect of defending the enforcement claim. Summary judgment was granted, with the precise sum, interest and costs to be determined.

Not stated in the judgment. This was a first-instance enforcement decision in the High Court (Technology and Construction Court).