Nickleby FM Ltd v Somerfield Stores Ltd

In adjudication enforcement proceedings, a party is not generally barred from relying in court on a different jurisdictional formulation merely because its case before the adjudicator was expressed differently. The court should examine whether the adjudicator in fact had jurisdiction, whether the later case is materially or prejudicially different, and whether the adjudicator would inevitably have reached the same jurisdictional conclusion on the full material. Where a construction contract has been extended and amended by agreement, the agreement may be evidenced in writing by documents viewed together. Acceptance by conduct need not itself be in writing, and the writing need not be contemporaneous. Adjudication decisions should ordinarily be enforced unless the adjudicator failed to decide the referred dispute or acted in an obviously unfair manner.

Nickleby FM Ltd v Somerfield Stores Ltd sought judgment enforcing an adjudicator’s decision requiring payment of outstanding management fees. The defendant challenged jurisdiction under the Housing Grants, Construction and Regeneration Act 1996, contending that the contract had not been validly extended or that all its terms were not evidenced in writing. It also argued that the claimant had advanced a materially new jurisdictional case in the enforcement proceedings and was precluded by election from doing so.

Both parties accepted before the court that the contract had been extended, that the Gain Share arrangements had been amended, and that those agreements were evidenced in writing. The central issues were therefore whether the adjudicator had jurisdiction and whether the alleged change in the claimant’s case prevented enforcement.

1. Judgment for the claimant. The adjudicator’s decision was enforceable. Judgment was entered for Nickleby in the sum of £231,222.89 inclusive of VAT. A declaration concerning the revised Gain Share arrangements was also appropriate.
2. The court rejected the jurisdictional challenge. The contract was a construction contract, its term had been extended by agreement, and the extension and Gain Share amendments were evidenced in writing by the relevant emails, letters and attachments. The written evidence could be assembled from several documents. It did not have to be contemporaneous.
3. For the purposes of section 107 of the Housing Grants, Construction and Regeneration Act 1996, conduct accepting a written contractual offer does not undermine the requirement that the construction contract be evidenced in writing. An oral acceptance of a written offer may therefore complete an agreement which remains evidenced in writing.
4. The court disagreed with the broader application of election in Redworth Construction Ltd v Brookdale Healthcare Ltd [2006] EWHC 1994 (TCC). An adjudicator’s non-binding view on jurisdiction does not create the same circumstances as an election between binding court positions. A different case in court may require careful scrutiny, particularly as to material difference, prejudice, the information available to the adjudicator, and whether the adjudicator actually had jurisdiction. Here, the alternative case advanced before the adjudicator was readily comprehensible and sufficient.
5. The court applied the policy of enforcing adjudication decisions stated in Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2006] BLR 15. Intervention is reserved for cases where it is plain that the adjudicator decided a question not referred, or proceeded in an obviously unfair manner. Neither circumstance existed.
6. The alleged inaccurate statement concerning later Gain Share claims did not materially affect the result. The agreement excluding future Gain Share claims was established, and any such claims would fail. The defendant’s remaining substantive jurisdiction argument was withdrawn.

First-instance enforcement proceedings. The judgment does not state that it was appealed.