Galliford Try Building Ltd v Estura Ltd

An adjudicator’s decision on an interim payment must be enforced summarily where the adjudicator answered the question referred and no breach of natural justice is alleged. An error within jurisdiction does not justify resisting enforcement. Where required payment notices are not served, the sum stated in an interim application becomes payable for that payment date and cannot be reopened in a second adjudication concerning the same date. Later applications, Part 8 proceedings or final-account litigation may provide remedies. A stay is available only where enforcement risks manifest injustice. In exceptional cases, a partial stay may balance cash flow, likely entitlements and the claimant’s incentive to complete.

Galliford Try Building Ltd sought summary judgment to enforce an adjudicator’s award of £3,928,227.04 plus VAT and interest under an amended JCT Design and Build Contract 2011. Estura Ltd had failed to serve payment and pay less notices in respect of Interim Application 60. It argued that the adjudicator had not decided the true value of the works and that exceptional circumstances justified refusing or staying enforcement. The central issues were the effect of the unserved notices, the availability of a second adjudication or other valuation remedy, and whether enforcement would cause manifest injustice. The court granted summary judgment but stayed enforcement above £1.5 million subject to conditions.

1. Summary judgment. The adjudicator had determined the question actually referred to him. Estura alleged no breach of natural justice. Applying the established principle that an error, however serious, made within jurisdiction does not itself prevent enforcement, the adjudicator’s decision was not open to challenge on the application.
2. Interim payment valuation. Under the contractual payment regime, failure to serve the required payment and pay less notices meant that the sum stated in the interim application became contractually payable. The approach in ISG Construction Ltd v Seevic College [2014] EWHC 4007 (TCC) was applied. The employer could not reopen the value of the works at the same valuation date in a second adjudication. That did not determine the value at another date or prevent later applications, litigation or a Part 8 declaration concerning the true sum stated.
3. Authorities and adjudicator’s powers. Harding v Paice [2014] EWHC 3824 (TCC) concerned final payment on termination and was distinguishable from interim payments. VHE Construction plc v RBSTB Trust Co Ltd [2000] BLR 187 was also distinguishable because the earlier contract contained wider arbitration wording. Paragraph 20 of the Scheme for Construction Contracts did not permit the adjudicator in this case to revise the sum stated in an interim application, which was not a decision taken by another person. The reasoning in Rupert Morgan Building Services (LLC) Ltd v Jervis [2004] 1 WLR 1867 confirmed the cash-flow, non-conclusive nature of interim certificates, but did not support an immediate second adjudication on the present issue.
4. Stay. A stay in an adjudication enforcement case is limited to circumstances involving a risk of manifest injustice. The court accepted that the combination of the unusually large application, the late stage of the works, Estura’s financial position and the possible effect on completion created exceptional circumstances. A full stay was inappropriate because GTB had done nothing wrong and Estura’s financial position was not caused by GTB.
5. Extent of stay and evidence. The court considered the evidence principles in M V Yorke Motors v Edwards [1982] 1 All ER 1024. A bare assertion of inability to pay was insufficient, although Estura was allowed to provide further evidence. Balancing the relevant factors, the court entered judgment for £3,928,227.04 plus VAT, interest and further interest, but stayed enforcement above £1.5 million. GTB could apply to vary or lift the stay only on specified conditions, including serving its Final Statement, and the parties were left to agree costs or return to court.