Bell Building Limited v TClarke Contracting Limited

In adjudication enforcement proceedings, the scope of a referred dispute is identified in broad terms. It is not confined by the referring party’s evidence or arguments and may be widened by the defending party’s submissions. An adjudicator may determine the sum due in response to those submissions, including by correcting the calculation, provided the issue arises from material placed before the parties and has been fairly canvassed.

A breach of natural justice requires more than a peripheral error. It must concern a decisive or potentially important issue on which the parties had no fair opportunity to comment. A decision reached on material supplied by a party in response to the adjudicator’s question, and on an issue raised in correspondence, does not ordinarily breach natural justice.

Bell Building Limited sought summary judgment to enforce an adjudicator’s decision requiring TClarke Contracting Limited to pay £2,129,672.69 plus VAT, interest and costs following a dispute about Interim Application No. 18 under a construction subcontract.

The adjudicator had found that TClarke’s Pay Less Notice was invalid. He then excluded a payment made under Application No. 19 from the calculation and awarded a sum exceeding the amount claimed in the adjudication. TClarke argued that the adjudicator had exceeded his jurisdiction and breached natural justice by valuing the works and awarding more than the claim.

The issues were whether the adjudicator’s approach fell within the referred dispute and whether the parties had been denied a fair opportunity to address it.

1. Summary judgment granted. There was no arguable defence to enforcement of the adjudicator’s decision.
2. The jurisdictional principles in Cantillon Limited v Urvasco Limited [2008] EWHC 282 (TCC) applied. The court should identify the disputed claim or assertion in broad terms and avoid an over-legalistic analysis. The evidence and arguments initially advanced do not necessarily define the dispute, and the defending party’s submissions may widen the adjudication’s ambit.
3. Here, TClarke challenged Bell’s calculation and argued that payments made under Application No. 19 should be taken into account. That submission opened up the possibility of a different assessment of the sum due. The adjudicator therefore had jurisdiction to determine the amount payable in response to TClarke’s case.
4. The natural justice test in Cantillon also applied. Any breach had to be material and concern an issue that was decisive or of considerable potential importance, on which the parties had not been given a fair opportunity to comment.
5. The guidance in Roe Brickwork Limited v Wates Construction Limited [2013] EWHC 3417 (TCC) was applicable. An adjudicator must invite submissions where proposing to rely on material not put forward by the parties. However, the adjudicator may decide an important point on the material before him on a basis for which neither party contended, where the relevant material and issues have been fairly canvassed.
6. The adjudicator had not conducted a valuation exercise or embarked on a factual or legal frolic. He had corrected the arithmetic using material supplied by Bell in response to his question, and the issue had been addressed in correspondence. There was accordingly no breach of natural justice.
7. Bell was entitled to enforce the decision. Counsel were invited to prepare a draft order. Costs were to be agreed or summarily assessed on paper.

First-instance adjudication enforcement proceedings. The judgment records parallel Part 8 and Part 7 proceedings concerning the validity of the Pay Less Notice, but no prior judgment determining the merits of the enforcement application.