Berry Piling Systems Ltd v Sheer Projects Ltd

An adjudicator’s decision will be enforced where the alleged breach of natural justice did not materially affect the result. A point raised by the adjudicator will not invalidate the decision if the adjudicator had already reached the same conclusion on sufficient and independent grounds. When considering a stay of execution, the court assesses the successful party’s ability to repay at the time repayment may become due, making an informed estimate of that date. Current trading performance and future prospects may carry greater weight than an old balance-sheet deficit.

Berry Piling Systems Ltd applied for summary judgment to enforce an adjudicator’s decision awarding it £20,459.89 against Sheer Projects Ltd. Sheer alleged that the adjudicator had relied on an argument raised for the first time in the decision, thereby breaching natural justice. Sheer alternatively sought a stay of execution pending its arbitration of the underlying dispute, contending that Berry might be unable to repay the judgment sum if Sheer succeeded.

The court determined whether the adjudicator’s reasoning was materially affected by the alleged procedural breach and whether Berry’s financial position justified a stay.

1. Enforcement. The adjudicator’s decision was enforceable. Sheer’s delay claim failed because it had not provided a proper analysis of the alleged delays and had not proved that any matter for which Berry was contractually responsible caused critical delay to the works (paras 10–11).
2. The adjudicator was entitled to treat Sheer’s failure to challenge Berry’s contention that Sheer was contractually responsible for dewatering as an implicit acceptance of that contention. That provided a further reason for rejecting the delay claim based on leakage through the piles (para 11).
3. The adjudicator’s observation that leaking water could have been directed to a storage tank was not necessary to the decision. Even if the observation had been raised without giving the parties an opportunity to address it, it could not have made a material difference because the claim had already failed on the absence of proof of critical delay (paras 12–13).
4. Stay of execution. The existence of an arbitration concerning the same dispute did not affect Berry’s right to enforcement. An adjudicator’s decision remains binding unless and until the dispute is finally determined by litigation or arbitration (para 15).
5. Ability to repay must be assessed at the time when repayment might be required. The court should make an informed estimate of when the relevant judgment or award is likely to arise. Here, the appropriate period was estimated at 12 to 18 months (paras 16–17).
6. Although Berry’s published accounts and credit rating raised concerns, its more recent management accounts, continuing trade, full order book and renewed overdraft facilities supported the conclusion that it was trading profitably and would probably remain able to repay the judgment sum. The stay was therefore refused (paras 18–26).
7. Interest was ordered by agreement, and Sheer was ordered to pay Berry’s agreed costs of £13,000 within seven days (paras 27–29).

First-instance decision on an application for summary judgment to enforce an adjudicator’s decision. The judgment itself does not state any appellate history.