St Austell Printing Company Ltd v Dawnus Construction Holdings Ltd

In adjudication enforcement proceedings, a dispute crystallises when a claim is expressly rejected or, depending on the contractual context, when the responding party’s conduct and prolonged silence objectively show that it is not admitted. A referring party may prune an existing claim before adjudication, provided the pruning does not transform it into a different dispute. An adjudicator may therefore decide a properly severable part of an interim payment claim and order payment reflecting an existing contractual liability. Limiting the claim does not prevent the responding party from advancing a legitimate defence or cross-claim, including set-off. The court granted summary judgment to enforce the adjudicator’s decision and dismissed the jurisdictional challenge.

St Austell Printing Company Limited brought Part 8 proceedings seeking declarations that an adjudicator lacked jurisdiction. Dawnus Construction Holdings Limited brought a separate Part 7 claim to enforce the adjudicator’s decision ordering payment of £417,919.66 arising from interim application No. 19 under a JCT design and build contract.

Dawnus had limited the adjudication to the measured value of 115 specified changes and variations, while reserving other matters. St Austell argued that the dispute had not crystallised and that the adjudicator had no power to order payment of only part of the interim application. The central issues were whether a dispute had crystallised before the notice of adjudication and whether the limited reference was jurisdictionally permissible.

1. Crystallisation. The first jurisdictional objection failed. A dispute may arise through express rejection, discussions from which non-admission is objectively inferred, prevarication, or silence for an appropriate period. The required period depends on the facts and contractual structure. Here, the detailed interim application was considered and rejected on its merits by the payment notice and accompanying clarification letter. In any event, the subsequent eight-month inactivity, following promised responses which were never provided, plainly demonstrated rejection of the claim.
2. Pruning the reference. The second objection also failed. Fastrack Contractors Ltd v Morrison Construction Ltd established that a referring party may cut out some existing matters in dispute, provided that the resulting reference remains the same dispute rather than a different dispute. Focusing an interim payment adjudication on measured work, while leaving loss and expense or other matters for later, was permissible and encouraged where it made the claim suitable for adjudication.
3. Existing liability and defences. The adjudicator’s decision determined what was due under the contract. It did not create a new liability. St Austell’s liability to make an interim payment was not removed by Dawnus’s decision to pursue only the measured value of the 115 changes. St Austell remained entitled to raise any legitimate defence or cross-claim, including set-off, against the limited claim. The wording of the notice or referral could not exclude such a defence.
4. Orders. Dawnus was entitled to summary judgment under CPR Part 24 for the sums ordered by the adjudicator. St Austell’s Part 8 claim for declarations concerning jurisdiction was dismissed.