Mailbox (Birmingham) Ltd v Galliford Try Building Ltd

In adjudication, the scope of the dispute is determined principally by the notice, read with the relevant background and the first adjudicator’s actual decision. A defending party cannot reserve part of a crystallised defence for a later adjudication merely by choosing not to advance it in the first. Where a liquidated damages claim and extension-of-time claims form one dispute, the resulting decision binds the parties unless altered by the court. A later adjudicator may nevertheless consider matters relevant to a distinct termination dispute which was not raised previously, even if those matters overlap factually with an extension-of-time claim.

The claimant sought declarations concerning the effect of an adjudicator’s decision awarding liquidated damages after a construction contract had been terminated. The defendant had relied on only three relevant events in the first adjudication, although its pre-adjudication correspondence concerned wider delay and extension-of-time claims. It later commenced a second adjudication concerning the alleged wrongful termination and sought a further extension of time for section 3.

The central issues were whether the first adjudication had finally determined the claimant’s liquidated damages entitlement and the defendant’s extension-of-time entitlement, and whether the defendant could rely on wider delay evidence in the termination dispute.

1. Liquidated damages. The first adjudicator’s decision finally and bindingly determined Mailbox’s entitlement to the awarded liquidated damages, subject to any successful court challenge. A subsequent adjudicator could not alter that entitlement. Any final-account exercise under clause 8.7.4 had to incorporate the adjudicated figure without modification.
2. Extensions of time. Under the JCT contract, an extension of time operated defensively against a liquidated damages claim. The pre-adjudication correspondence showed that the crystallised dispute concerned delay and liquidated damages across all the delayed sections, not merely the three relevant events advanced in the defence. GTB could not restrict the scope of that dispute by limiting its submissions and then reserve other available extension-of-time defences for a later adjudication.
3. This conclusion followed the approach in Cantillon v Urvasco Limited [2008] EWHC 282 (TCC) and Working Environments Limited v Greencoat Construction Limited [2012] EWHC 1039 (TCC). Quietfield Limited v Vascroft Construction Limited [2007] BLR 67 did not assist GTB because it concerned a materially different situation in which the earlier adjudication had been limited.
4. Termination. The validity of the termination and whether GTB had proceeded regularly and diligently had not arisen in the first adjudication. GTB could therefore deploy all relevant facts and matters in the second adjudication on those issues. The adjudicator could consider evidence which might also be relevant to a future court challenge concerning extension of time, provided that the second adjudication did not purport to vary the first decision.
5. Mailbox was entitled to retain the adjudicated liquidated damages. GTB was not entitled to seek further extensions of time in the second adjudication, but could rely on all relevant material concerning regular and diligent performance for the termination dispute. The precise declarations were left for agreement.

First-instance decision. The judgment records that O’Farrell J had earlier enforced the adjudicator’s decision, but this was not an appeal from that enforcement judgment.