YCMS Ltd (t/a Young Construction Management Services) v Grabiner & Anor

An adjudicator may correct a patent error only where the contract permits a narrow slip rule. The correction must give effect to the adjudicator’s first intention, not a later change of mind, and must be made within a reasonable time without material prejudice. A party may rely on a defence arising during the adjudication, including a later certificate raised by the opposing party. Valid adjudicators’ decisions should ordinarily be enforced promptly. A later adjudication does not justify withholding payment or setting off a later award unless the relevant sums are shown to duplicate one another. An adjudicator’s decision on VAT remains binding unless and until finally revised through the agreed dispute-resolution process.

YCMS sought summary judgment to enforce an adjudicator’s decision requiring Mr and Mrs Grabiner to pay sums arising from interim certificates under a construction contract. The adjudicator initially awarded £25,942.74 plus VAT, then purported to revise the decision to £59,906.36 after YCMS identified an arithmetical error.

The defendants argued that the adjudicator had exceeded his jurisdiction by taking account of a later certificate, that the revision was invalid, that the first decision duplicated sums paid under a second adjudication, and that sums awarded to them in a third adjudication should be set off. The court also had to determine the VAT payable under the first decision.

1. Jurisdiction. The dispute referred concerned certified sums unpaid when the adjudication commenced. The later Certificate No. 14 was not itself part of the crystallised dispute. However, the defendants relied on that certificate as a defence and thereby brought it into the adjudication. The adjudicator was entitled, and required, to address that defence and to take account of payments made under it. The first decision was therefore within jurisdiction.

2. Slip rule. The adjudicator’s original deduction was an inexplicable arithmetical error. Correcting it to £41,558.19 would have been a permissible correction of a patent slip. Instead, the revised decision introduced Certificate No. 14 into both the certified and paid columns while also retaining the larger Certificate No. 13 figure. That duplicated sums and reflected second thoughts rather than correction of the original intention. The revision was invalid and materially prejudiced the defendants. A genuine slip would ordinarily not require further submissions from the parties, and correction within 48 hours would have been timely.

3. Second adjudication. The defendants had not established an arguable duplication between the amount awarded in the second adjudication and the amount covered by Certificate No. 13. They had not produced the necessary item-by-item comparison.

4. Set-off and enforcement. The court applied the ordinary rule that adjudicators’ decisions are enforced summarily and promptly. The later third decision, which appeared to give the defendants a net recovery, was not a special circumstance justifying set-off or withholding payment.

5. VAT. The adjudicator’s decision on VAT was binding, even if wrong. The amount payable was VAT on £15,615.45, not VAT on the whole £25,942.74. Summary judgment was entered for £28,675.44 inclusive of VAT.