LJR Interiors Limited v Cooper Construction Limited

A limitation defence may be raised in adjudication proceedings where the dispute concerns a stale contractual payment claim. The six-year period under the Limitation Act 1980 applies to the underlying contractual cause of action, not merely to the later date on which a payment application is made or a pay less notice is omitted. A later demand cannot renew a claim that has already accrued and become statute barred. An acknowledgment restarts limitation only where it identifies and acknowledges the claim in question; acknowledgment of a much smaller sum is insufficient. Where an adjudicator ignores a clear limitation defence in an unusually late referral, the error may be sufficiently clear-cut and unconscionable to justify refusing enforcement.

LJR sought summary judgment to enforce an adjudicator’s decision awarding payment under a 2014 construction contract. Cooper brought a Part 8 claim seeking a declaration that the decision was void and unenforceable because the claim was statute barred.

The contract works were completed in October 2014. LJR made earlier payment applications, including Application No. 3 in October 2014, and later submitted Application No. 4 in July 2022 for sums which substantially duplicated the earlier claim, together with retention and administration-charge elements. The adjudicator treated the cause of action as arising on the 2022 final date for payment and rejected the limitation defence. The central issues were whether limitation applied in adjudication, when the relevant payment claims accrued, whether a 2016 email acknowledged the claim, and whether any error justified resisting enforcement.

1. Permissible Part 8 challenge. The principles in Hutton Construction Ltd v Wilson Properties (London) Ltd require a short, self-contained issue capable of determination without oral evidence or substantial elaboration, and one which it would be unconscionable for the court to ignore. The limitation issue satisfied that test because the referral occurred long after contractual completion and the consequences were clear-cut.
2. Limitation applies to adjudication. Section 5 of the Limitation Act 1980 bars an action founded on simple contract after six years from accrual of the cause of action. In context, “action” in section 38 includes adjudication proceedings. Alternatively, the court could consider the limitation defence in the Part 8 proceedings enforcing the adjudicator’s decision. Section 108(2)(a) of the Housing Grants, Construction and Regeneration Act 1996 permits referral “at any time”, but does not disapply contractual limitation.
3. Accrual of the payment claims. The adjudicator erred by treating the absence of a time limit in Part II of the Scheme as making the 2022 application timely. The contract’s payment terms, the parties’ course of dealing and Application No. 3 showed that the matching measured-work and additional-work sums accrued by November 2014. A later demand could not make those sums due again. The retention claim was likewise substantially duplicated by the earlier shortfall claim and was statute barred. The administration charge was unsupported by the contract and, on the unchallenged completion date, was also statute barred.
4. Acknowledgment. Section 29 did not revive the claim. The December 2016 email referred to a retention of £9.84 and, read as a whole, admitted no liability. It did not acknowledge the substantially larger claim later advanced under Application No. 4. Sections 29(5), 29(7) and 30 therefore did not prevent expiry of limitation.
5. Disposition. The adjudicator’s decision was clearly wrong in ignoring the limitation defence. The Part 7 enforcement claim and LJR’s summary-judgment application were dismissed. Cooper was granted a declaration that the claim under Application No. 4 was statute barred and that the adjudicator’s decision requiring payment was unenforceable. Consequential matters and any application for permission to appeal were adjourned.

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