Level 1 Raised Flooring Limited v JM Construction (SW) Limited

An adjudication decision is enforceable only if it determines an entitlement capable of enforcement. The court will not convert a conditional valuation or a finding that no payment is currently due into an enforceable payment award by implication. The logical-consequence approach applies only where payment is the necessary and indispensable result of the adjudicator’s actual decision. Cash-flow policy and the avoidance of a further adjudication cannot supply an entitlement which the adjudicator did not decide. A conditional decision dependent on the lawfulness of termination, where that issue was not determined, is not susceptible to summary enforcement.

The claimant sought summary judgment to enforce a construction adjudication decision. The adjudicator valued the works and identified an overpayment in principle, but decided that the contractual termination provisions did not create a current entitlement to payment. If the termination was valid, the claimant was required to follow the contractual accounting procedure.

The claimant argued that completion of that procedure crystallised the adjudicator’s valuation into an enforceable interim decision. The defendant contended that the adjudicator had decided only that no payment was currently due. The central issue was whether the decision, expressly or as a necessary logical consequence, required payment of the claimed sum.

1. Application refused and claim dismissed. The adjudicator’s decision was not susceptible to enforcement, either on its face or by logical extension.
2. The adjudicator’s answer to the question whether the claimant was currently entitled to payment was, in substance, nil. The decision was conditional upon the lawfulness of the claimant’s termination, an issue which was not determined.
3. In the absence of an identified contractual power to order unconditional payment, the adjudicator decided only that there was no current entitlement to payment. There was no decision on an alternative question of when payment would become due.
4. The court rejected the argument that completing the contractual accounting procedure necessarily crystallised the valuation into an enforceable award. Payment was not the inevitable and indispensable result of the decision.
5. Robust enforcement, cash-flow policy and avoidance of a further adjudication could not overcome the inchoate nature of the decision. The claim was therefore dismissed, the defence having strong prospects of success.