Flexidig Ltd v M&M Contractors (Europe) Ltd

For the purpose of adjudication, a notice is given when it comes to the addressee’s attention, or on the contractually deemed date of service, rather than merely when it is sent. An adjudicator may make a positive award determining the sum to be paid after finding a pay less notice valid, where the notice of adjudication and the parties’ submissions sufficiently encompass that issue. The adjudicator may determine the amount to be withheld without finally valuing the underlying defects claim, provided the award remains an interim withholding pending final determination. A court should adopt a broad, non-technical approach to the scope of an adjudication and natural justice. An adjudicator may decide an important point on material fairly canvassed by the parties, even if neither party advanced the precise outcome.

Flexidig sought summary judgment to enforce an adjudicator’s decision awarding £223,597.21 plus VAT, interest and costs in respect of an interim payment application. M&M resisted enforcement and sought dismissal on service and jurisdiction grounds.

The parties’ contract was governed by Northern Ireland law, contained a non-exclusive jurisdiction clause and provided for adjudication. The works were performed in England. M&M had commenced related proceedings in Northern Ireland seeking to invalidate the adjudication decision. The court had to determine whether the English claim had been validly served, whether England was the proper forum, whether the referral to adjudication was in time, and whether the adjudicator had jurisdiction to make a positive award after finding the pay less notice valid.

1. Service and forum. The Northern Ireland proceedings concerned the same adjudication and were pending for the purpose of CPR 6.32, so service without permission was unavailable. Permission to serve out was nevertheless granted under CPR 6.36 and 6.37. England was the proper forum because the contract was performed there, the defendant had a substantial English presence, the proceedings had already been argued in England, and transfer would cause duplication and substantial additional cost. The Northern Ireland proceedings were a factor, but not a bar.
2. Alternative service under CPR 6.15 was authorised retrospectively. The proceedings had repeatedly been brought to M&M’s attention, including through its lawyers, and further service would have been pointless and would have conferred an undeserved technical advantage. The claim was therefore properly before the court.
3. Referral timing. Under the contract, the notice of adjudication was given when received, or when deemed served under the contractual notice provision. The relevant date was 22 November 2019, not the date on which the notice was sent. The referral was therefore within seven days and the adjudicator had jurisdiction.
4. Positive award. The adjudicator was entitled to decide the amount which M&M could withhold after finding the pay less notice valid. The reference sought such other sum as the adjudicator found due, the issue necessarily arose if the pay less notice was valid, and section 111(8) of the Housing Grants, Construction and Regeneration Act 1996 permitted an adjudicator to determine that more than the sum stated in the notice should be paid. The adjudicator did not finally value the defects claim. He fixed an interim withholding amount pending a separate adjudication or agreement.
5. The adjudicator had not exceeded the scope of the dispute. The notice, pleadings, evidence and correspondence, particularly M&M’s own submissions, had fairly raised the extent of the defects claim and the appropriate withholding. The court adopted a broad and non-technical approach to jurisdiction.
6. There was no material breach of natural justice. Both parties knew the relevant material and had fairly debated the issues. The adjudicator could reach a conclusion lying between the alternatives advanced, without inviting further submissions on the precise figure.
7. The enforcement application succeeded. The adjudicator’s decision was enforced. Consequential matters were to be dealt with after judgment.

First-instance decision. No appeal history was stated in the judgment.