Bexhill Construction Ltd v Kingsmead Homes Ltd

An adjudicator’s decision will ordinarily be enforced by summary judgment. The court does not review the merits and intervenes only in limited circumstances, including a material breach of natural justice. A failure to address a substantive defence may be material, but a failure to mention every evidential detail or submission is not. An adjudicator who gives reasons when none were requested is not thereby required to address every point in detail, provided the decision answers the referred question and gives comprehensible reasons. A stay of enforcement requires evidence of a probable inability to repay the judgment sum and special circumstances making enforcement inexpedient.

The claimant subcontractor obtained an adjudicator’s decision requiring the defendant contractor to pay £49,664.80 under a brickwork subcontract. The claimant sought summary judgment to enforce the decision.

The defendant contended that the adjudicator had failed to consider its defence that the payment application lacked a contractual basis because claimed additional works had not been approved. It also sought a stay of enforcement based on the claimant’s alleged deterioration in financial position and risk of insolvency.

The central issues were whether the adjudicator had considered the defence, whether any omission amounted to a material breach of natural justice, and whether the evidence justified a stay.

1. The claimant’s application for summary judgment was granted for £49,664.80. The defendant’s application for a stay of enforcement was dismissed.

2. The adjudication concerned a single dispute: whether the defendant should pay the sum claimed on the applicable contractual and statutory payment terms. The parties’ submissions had evolved during the adjudication, but they were to be considered as a whole rather than as two separate sets of pleadings.

3. The adjudicator had considered the defendant’s defence. His decision referred to the relevant submissions, stated that he had considered all the documentation, and explained that not every submission affected the matters he had to decide. The post-decision correspondence supported that conclusion.

4. A material breach of natural justice requires more than failure to address a particular aspect of evidence or a detailed submission. It may arise where a substantive defence is deliberately disregarded. Here, there was no indication of deliberate exclusion. Even if the adjudicator had interpreted the defendant’s submissions incorrectly, that would not establish a failure to consider the defence.

5. Where an adjudicator gives reasons although none were requested, the reasons need not discuss every point raised. It is sufficient that the adjudicator answers the question referred and gives comprehensible reasons for the conclusions reached, even if the decision is legally or factually wrong.

6. The adjudicator was entitled to decide that, under the Housing Grants, Construction and Regeneration Act 1996 and the Scheme, the defendant’s payment notice and pay less notice were invalid. The court would not interfere with that decision at the enforcement stage.

7. The stay application could be considered despite not having been pleaded in the defence. However, the defendant failed to establish a probable risk that the claimant would be unable to repay the judgment sum. The reported insolvency risk was 3.23%, the financial deterioration was unexplained, and evidence concerning another company associated with the claimant’s director was insufficient.