S G South Ltd v Swan Yard (Cirencester) Ltd

Adjudication decisions are to be enforced unless it is plain that the adjudicator decided a question not referred or acted in an obviously unfair manner. An adjudicator has jurisdiction to make an error of fact or law if the question addressed was within the reference. Ongoing arbitration or litigation concerning the final account does not ordinarily prevent enforcement of a temporarily binding decision. Where the parties’ written submissions allege an agreement otherwise than in writing and that allegation is not denied, section 107(5) of the Housing Grants Construction and Regeneration Act 1996 may constitute the required agreement in writing for adjudication jurisdiction.

The claimant contractor applied for summary judgment to enforce an adjudicator’s award against the defendant employer. The employer accepted that it had made no jurisdictional or natural justice challenge, but resisted enforcement on the basis of alleged errors, direct payments to subcontractors, and pending final-account proceedings.

The adjudicator had found jurisdiction despite there being no executed written contract. The claimant conceded that two elements of the award had been paid directly to subcontractors. The issues were whether the remaining award was enforceable, whether the written exchanges satisfied section 107(5) of the Housing Grants Construction and Regeneration Act 1996, and whether pending final-account proceedings justified withholding judgment.

1. Enforcement. Judgment was entered for the claimant in the reduced sum of £70,450.14 plus VAT, together with interest and costs. The adjudicator’s award was temporarily binding and there was no proper basis for resisting enforcement.

2. Applicable principles. The court must respect and enforce an adjudicator’s decision unless it is plain that the question decided was not referred, or the adjudicator’s approach was obviously unfair. An adjudicator has jurisdiction to make a mistake, provided that he asks and seeks to answer a question actually referred to him. Alleged errors in assessing evidence or calculating the amount due therefore did not justify resisting enforcement.

3. Jurisdiction. Although section 107 of the Housing Grants Construction and Regeneration Act 1996 ordinarily requires the construction contract to be evidenced in writing, the exchanges in the adjudication and proceedings alleged an agreement otherwise than in writing and that allegation was not denied. Under section 107(5), those exchanges constituted an agreement in writing to the effect alleged. The adjudicator therefore had jurisdiction.

4. Pending proceedings. The existence of separate arbitration or legal proceedings to determine the final account did not prevent enforcement. The adjudicator’s conclusion remained temporarily binding until final determination. The employer could not convert alleged direct payments, disputed before the adjudicator, into a basis for reducing the remaining award.

5. The parties’ documents concerning payments of £12,667.23 and £15,000 constituted a post-decision written agreement under clause 9A.7.1 of the JCT Management Contract. Those sums were accordingly excluded from the judgment. No further deduction was justified. A stay of execution was also refused in substance because the pending final-account litigation did not amount to special circumstances.