Letchworth Roofing Company v Sterling Building Company

An adjudicator’s decision will generally be enforced unless there is a jurisdictional defect or a breach of natural justice. Where the adjudication provisions permit a 14-day extension by the referring party, the extension may be established by clear agreement or acquiescence in the adjudicator’s timetable. A dispute is defined by the notice of adjudication and cannot be enlarged or reduced without agreement. A responding party may raise matters in defence, but a cross-claim requiring a withholding notice cannot be taken into account where no valid notice was served. If the adjudicator decides that a withholding notice was required and invalid, the cross-claim must be excluded from the amount awarded.

The claimant sought summary judgment to enforce an adjudicator’s decision awarding £46,807.14 in respect of an interim payment. The defendant did not appear, but relied on a written skeleton argument.

The defendant argued that the adjudicator’s decision was a nullity because it was issued outside the initial 28-day period. It also argued that the adjudicator had failed to determine, or properly take into account, a delay cross-claim. The central issues were whether the adjudicator’s time had been extended and whether the cross-claim fell within the dispute referred and could be deducted despite the absence of a valid withholding notice.

1. Enforcement principle. The court enforced the adjudicator’s decision. In the absence of a want of jurisdiction or a breach of natural justice, an adjudicator’s decision should be enforced.
2. Extension of time. The subcontract required the adjudicator to decide within 28 days, subject to a 14-day extension by the referring party. The claimant’s referral notice indicated that it would grant an extension because of the Christmas period. The adjudicator repeatedly stated that he was working towards 19 January 2009, and neither party objected. The claimant had therefore acquiesced in the extension and was estopped from denying it. The decision was within the permissible 42-day period and was not a nullity.
3. Scope of the dispute. The dispute is defined by the notice of adjudication. Later documents cannot enlarge or reduce it without agreement. Here, the notice referred the validity of the withholding notice. The valuation of the delay cross-claim was requested only for possible future consideration of the final account.
4. Withholding notice. A responding party may raise matters in defence, but that principle does not permit reliance on a contractual cross-claim requiring a withholding notice where no valid notice was served. The adjudicator expressly found that the notice was invalid because it failed to state the amount and grounds of withholding and was out of time. He was therefore right to exclude the cross-claim from the sum due, while treating its valuation as declaratory only.
5. The defendant’s natural justice argument could not succeed. The adjudicator had decided the relevant issue within his jurisdiction. Summary judgment was granted for £55,893.07.

This was a first-instance enforcement decision. No earlier appellate decision is stated in the judgment.