AT Stannard Ltd v Tobutt & Anor

Challenges to enforcement of an adjudicator’s decision should succeed only in the plainest cases, where the adjudicator decided a question not referred or acted in an obviously unfair manner. A party participating in adjudication without reserving a jurisdictional objection may waive that objection and confer an ad hoc jurisdiction. A late jurisdictional defence must also have a realistically arguable evidential basis. Incorporation of a partnership into a company, a notice of changed trading status, or subsequent payments by the company does not, without more, establish novation of the partnership’s existing contractual liabilities. The TCC will apply its prompt enforcement procedures strictly where late evidence and adjournment applications would frustrate the cash-flow policy of the statutory adjudication scheme.

The claimant sought summary judgment to enforce an adjudicator’s decision requiring the defendants, formerly trading as JT Tarmac, to pay retention money arising from works carried out under a construction contract. The defendants had participated in the adjudication without raising any objection that the contract had been novated to JT Tarmac Ltd, a company incorporated after the relevant works. They later contended that the adjudicator lacked jurisdiction and sought to rely on late evidence supporting an alleged novation. The central issues were whether the jurisdictional objection had been waived, whether there was a realistically arguable novation, and whether the hearing should be adjourned.

1. Summary judgment granted. The claimant was entitled to enforce the adjudicator’s decision for £53,392.63 plus interest from 1 August 2014. Payment was directed by 31 October 2014. The claimant was awarded £12,000 costs.
2. The defendants’ contention that a novation had removed the original firm’s contractual liability was a jurisdictional challenge. It should have been raised during the adjudication. The defendants had expressly indicated that they would participate, participated without reservation, and never suggested that the company had assumed the firm’s rights and obligations.
3. Following the reasoning in GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2010] EWHC 283 (TCC), that participation waived the objection and conferred an ad hoc jurisdiction on the adjudicator.
4. In any event, the evidence did not establish a realistically arguable novation. The change from partnership to company, the notice that future dealings and outstanding matters would be the company’s responsibility, company cheques, and a later retention arrangement did not show that the claimant had agreed to release the firm from existing liabilities. A transfer of contractual obligations required novation.
5. The court applied the approach in Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358. Courts should enforce adjudicators’ decisions unless the question was plainly outside the referral or the adjudicator’s process was obviously unfair. The defendants’ challenge did not meet that threshold.
6. The application to adjourn and submit further evidence was refused. There was no adequate explanation for the delay, and further delay would undermine the prompt enforcement procedure supporting the policy of the Housing Grants Construction and Regeneration Act 1996.