Roe Brickwork Ltd v Wates Construction Ltd

An adjudicator may decide an issue on a basis for which neither party expressly contended if the relevant material was before the parties and the resulting issues were fairly canvassed. A different calculation method does not, by itself, exceed jurisdiction where it remains within the dispute referred. A breach of natural justice must also be material and adversely affect the decision before enforcement is refused. An adjudication decision may be enforced for an ascertainable balance where the payment made on account is accepted and no dispute remains about that balance.

A brickwork subcontractor sought summary judgment to enforce an adjudicator’s decision assessing loss and expense at £381,459.75 plus interest. The main contractor argued that the adjudicator had exceeded his jurisdiction by adding 13% for overheads and profit to losses calculated using contractual daywork rates. Alternatively, it alleged a breach of natural justice because the adjudicator had not invited submissions on that methodology. The contractor also argued that the decision was uncertain because payments on account had not been allocated between the various heads of claim. By the hearing, it accepted that £97,992.23 had been paid. The court therefore considered jurisdiction, natural justice, materiality and enforceability.

The application for summary judgment was granted.

1. The adjudicator had jurisdiction to determine the claimant’s entitlement to overheads and profit and the interaction between that claim and the contractual daywork rates. Those issues had been squarely raised and thoroughly ventilated during the adjudication. The adjudicator’s decision to apply a 13% uplift to the assessed loss of productivity, rather than calculate overheads and profit using the claimant’s Hudson formula, was a difference in methodology within the referred dispute. It did not amount to deciding an un referred issue.
2. The court applied the principle in Balfour Beatty Construction v London Borough of Lambeth [2002] BLR 288 that an adjudicator must not decide a point on a factual or legal basis which has not been argued or put forward without giving the parties an opportunity to comment. That principle does not require an adjudicator to accept one party’s precise submissions. He may reach a conclusion on material and issues fairly canvassed, even if neither party advanced the exact reasoning adopted.
3. Even if consultation had been required, any breach would not have been material. The adjudicator’s method produced a lower overheads and profit figure than the claimant’s proposed method, so it caused no adverse effect on the defendant’s position.
4. The decision was sufficiently certain for enforcement. Although it did not itself identify the exact net sum due, the defendant had accepted that £97,992.23 had been paid on account. The balance of £283,467.52 was therefore undisputed and enforceable, with interest at 3.5% from 31 January 2013. The claimant was also entitled to 50% of the adjudicator’s fees.

The remaining dispute concerning approximately £50,000 paid on account was outside the adjudication and the action was stayed so that it could, if necessary, be referred to adjudication.