Brims Construction Ltd v A2M Development Ltd

In adjudication enforcement proceedings, the scope of the referred dispute is identified by examining the essential claim, the parties’ communications and the commercial context. The Notice and Referral are important, but are not necessarily determinative. A party with actual or constructive knowledge of a jurisdictional objection waives it by participating without an effective reservation where the other party relies on that participation. An adjudicator does not breach natural justice merely by deciding a point raised in the Referral or by inviting submissions on an issue not fully addressed. A material breach requires a decisive or potentially important point to have been determined without a fair opportunity to comment or provide relevant evidence.

Brims sought enforcement of an adjudicator’s decision requiring A2M to pay money under a JCT building contract. The dispute concerned the due date for an interim payment, the validity and timing of Brims’s payment application, the final date for payment, and the validity of A2M’s Pay Less Notice.

A2M challenged enforcement on the grounds that the adjudicator had decided an issue outside the Notice of Adjudication and that the adjudicator had breached natural justice by failing to permit further evidence. The central questions were whether the adjudicator had jurisdiction, whether any jurisdictional objection had been waived, and whether the decision-making process was materially unfair.

1. Jurisdiction. The dispute referred was the essential disputed claim concerning the amount payable for work covered by Brims’s 28 June application. The Notice of Adjudication had to be read with the parties’ prior correspondence and the Referral. It was pitched at a sufficiently high level to include the alternative contention that the application was made on 8 July. The adjudicator therefore had jurisdiction to decide that issue.
2. Waiver. In any event, A2M waived the jurisdictional objection. A2M, represented by competent solicitors, served a detailed Response addressing the relevant paragraphs of the Referral on their merits without reservation. Brims thereafter incurred time and costs in reliance on that unqualified participation. A jurisdictional objection raised only later, before the adjudicator’s decision but after that reliance, was ineffective.
3. Natural justice. The adjudicator was entitled to decide the issue because it had been clearly raised in the Referral. He also acted properly by inviting submissions on clause 4.11.4. In the context of adjudication, a direction to provide submissions did not exclude evidential material. A2M could have supplied further evidence or sought permission to do so, and its response in fact addressed the facts at length. There was no material breach of natural justice.
4. The adjudicator’s decision was enforceable. Judgment was entered for Brims. Permission to appeal and a stay of execution were refused. Brims received its costs, assessed downwards to £11,000.