Edenbooth Ltd v Cre8 Developments Ltd

On an application to enforce an adjudicator’s decision, the court should first determine any jurisdiction challenge. If the adjudicator had jurisdiction, the court should then consider any properly raised allegation of unfairness or breach of natural justice. Where both challenges fail, the adjudicator’s decision must be enforced. The statutory exemption for contracts with residential occupiers requires the relevant occupier to be a real person residing in the property; a development company cannot ordinarily rely on it. The rapid timetable of adjudication is not, without more, unfairness or a breach of natural justice. An adjudicator’s decision is temporarily binding, so payment cannot be withheld merely because the losing party proposes later proceedings.

The claimant carried out groundworks, foundation works and drainage works for the defendant development company. Following an adjudication, the adjudicator awarded the claimant £14,126.91, together with adjudicator’s fees and VAT. The defendant did not pay, and the claimant applied for summary judgment to enforce the award.

The defendant challenged the adjudicator’s jurisdiction, arguing that the works were outside the statutory definition of construction operations and that the contract was exempt as one made with a residential occupier. It also alleged communication difficulties, inadequate time to prepare submissions and procedural unfairness. The central issues were whether the adjudicator had jurisdiction, whether the adjudication had been conducted fairly, and whether the award should be enforced.

1. Enforcement procedure. The court considered the jurisdiction challenges first. If the adjudicator lacked jurisdiction, the decision would be a nullity. If jurisdiction existed, the court would consider any allegation that the adjudicator acted unfairly. If both challenges failed, enforcement was required, consistently with Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] BLR 522 and Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCH (Civ) 1358.
2. Construction operations. Groundworks and drainage works fell within section 105(1)(a) of the Housing Grants (Construction and Regeneration) Act 1998. Even if characterised as works preparatory to landscaping, they were included by section 105(1)(e). The exclusion in section 105(2)(d) concerned off-site manufacture or delivery of building components or plant and was irrelevant.
3. Residential occupier exemption. The exemption in section 106(1)(a) did not apply. The defendant was a company, and the term residential occupier required a real person to be residing in the property. Its property-development purpose also pointed away from the exemption. In any event, the relevant contract was between the claimant and the defendant company, so the possible residential status of an individual director could not affect the company’s contractual dispute-resolution provisions.
4. Fairness and natural justice. Communication problems did not invalidate the adjudication. The adjudicator addressed them, allowed further time, and received submissions dealing with the disputed issues. The need to provide information quickly is an inherent feature of adjudication and did not itself establish unfairness or a breach of natural justice.
5. Disposition. The adjudicator’s decision was temporarily binding. The defendant’s possible future claims, including a claim that the claimant had been overpaid, did not suspend the obligation to pay. Judgment was entered for £18,343.06, together with VAT on the fee element and interest of £245.23, producing a total judgment sum of £18,928.19.