Iluminesia Limited (t/a Alterego Facades) v RFL Facades Limited

On a summary judgment application to enforce an adjudicator’s decision, the court may determine a short question of contractual formation or construction where the evidence is sufficient and the parties have had a proper opportunity to address it. A contract for the supply of goods is not a construction contract under the Housing, Grants, Construction and Regeneration Act 1996, but the parties may create a separate contractual right to adjudication. A notice of adjudication is not ordinarily invalid merely because its description is imperfect. The court should examine the notice, the dispute referred and the adjudicator’s actual decision. An adjudicator may decide an issue on a legal basis not advanced by either party where the material and resulting issue have been fairly canvassed. A substantive error of law does not ordinarily prevent interim enforcement.

Iluminesia Limited, trading as AlterEgo Facades, applied for summary judgment to enforce an adjudicator’s decision requiring RFL Facades Limited to pay £776,920.32 plus VAT, interest and adjudication fees. The dispute concerned the supply of cladding materials, including GRC fins, a carrier rail system and a subframe.

RFL challenged enforcement on four grounds: absence of a contractual adjudication agreement; defects in the notice of adjudication; excess of jurisdiction and breach of natural justice; and approbation and reprobation. RFL had also commenced Part 8 proceedings seeking final declaratory relief concerning the adjudicator’s decision. The central issues were whether a binding contract containing an adjudication clause had been formed, whether the notice was valid, whether the adjudicator had decided matters within the reference fairly, and whether AlterEgo could enforce the interim decision while disputing the adjudicator’s contractual analysis.

1. Summary judgment granted. RFL had no real prospect of succeeding on any of its four defences. The outstanding question of the procedural relationship between the enforcement proceedings and the Part 8 claim was reserved for a further hearing.
2. The supply contract was not a “construction contract” for the purposes of sections 104 and 105 of the Housing, Grants, Construction and Regeneration Act 1996. The statutory right to adjudication therefore did not apply. However, the documents and subsequent conduct established a binding contract incorporating AlterEgo’s standard terms, including clause 13.1, which provided a contractual right to adjudication. The 31 January 2022 order acceptance was a new offer, accepted by conduct including payment of the deposit and delivery and acceptance of goods.
3. The notice of adjudication complied with paragraph 1(3) of Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1999. It identified the parties, the contract, the nature and timing of the dispute, the claims and the redress sought. A notice will rarely invalidate the whole adjudication unless a required matter is obviously absent. Where the complaint concerns the scope of a decision, the court should identify the dispute referred, examine the adjudicator’s actual decision and determine whether that decision fell within the notice. Any question of severability arises thereafter.
4. The adjudicator acted within jurisdiction. The reference included determining the contract and its relevant terms, whether RFL was entitled to omit the GRC fins, and the sums payable as debt or damages. The adjudicator did not fail to exhaust his jurisdiction merely because, having awarded the contractual price, he did not separately quantify claims which would have involved double recovery.
5. There was no material breach of natural justice. The adjudicator raised the relevant analysis, invited submissions and considered both parties’ responses. An adjudicator may decide a point on a basis not advanced by either party where the material and issues arising from it have been fairly canvassed.
6. AlterEgo was not approbating and reprobating. It was entitled to rely on the adjudicator’s interim decision for enforcement while maintaining that his contractual analysis was wrong for the purposes of the final Part 8 proceedings. Any substantive error of law in the adjudicator’s decision was not, in itself, a jurisdictional basis for refusing interim enforcement.

First instance decision. The court granted summary judgment to Iluminesia Limited. The form of order, consequential matters, permission to appeal and the relationship with the outstanding Part 8 proceedings were reserved for a further hearing.