Henry Construction Projects Limited v Alu-Fix (UK) Limited

An employer cannot commence a true-value adjudication while an immediate obligation to pay a notified sum under the Housing Grants, Construction and Regeneration Act 1996 remains unsatisfied. This remains so where the payer disputes whether a valid pay less notice was given. The later adjudication decision may establish that the payment obligation existed from the original final date for payment; payment following that decision does not retrospectively validate an adjudication commenced prematurely. A later true-value decision may potentially be relied upon where the earlier process establishes that no notified sum, and therefore no immediate payment obligation, ever existed.

The claimant sought summary judgment to enforce a true-value adjudication decision awarding it £191,753.88 plus interest. The defendant challenged the adjudicator’s jurisdiction. The claimant had commenced the true-value adjudication while an earlier adjudication was considering whether two pay less notices were valid. The earlier adjudicator subsequently rejected those notices, determined that payment had been due by 13 December 2022, and ordered payment. The claimant paid the award on 2 February 2023, after which the true-value adjudication proceeded.

The central issue was whether the payment obligation arose only when the earlier adjudicator decided the notice dispute, or existed from the original final date for payment.

1. Application dismissed. The true-value adjudication was commenced on 18 January 2023 without prior discharge of the immediate payment obligation. The adjudicator therefore lacked jurisdiction and the decision was a nullity. The court would not enforce it by summary judgment.
2. Section 111(1) of the Housing Grants, Construction and Regeneration Act 1996 required payment of the notified sum by the final date for payment. The earlier adjudication determined that date to be 13 December 2022. The later date of 3 February 2023 was only the final date for late payment.
3. The existence of a genuine dispute about the validity of pay less notices did not postpone the payment obligation. Treating it as postponing the obligation would prejudice the payee and undermine the cashflow policy of the statutory payment regime. A payer with a genuine dispute could protect itself by issuing a valid pay less notice.
4. The payment made after the earlier adjudication did not create a retrospective loss of jurisdiction. It established the facts as they had existed from the outset. The prohibition on commencing a premature true-value adjudication was distinct from the possible later reliance upon a true-value decision.
5. In a different case, if a zero pay less notice were upheld or the payment application were invalid, there might have been no notified sum and no immediate payment obligation. In that situation, a true-value adjudication might not be premature and reliance upon it might be permitted. This was an additional observation rather than a basis necessary to the result.
6. The approach in Grove Developments Ltd v S&T (UK) Ltd and M Davenport Builders Ltd v Greer, as explained in Bexheat v Essex Services Group, required the immediate payment obligation to be satisfied before commencement of the true-value adjudication.