CNO Plant Hire Ltd v Caldwell Construction Limited

Adjudicators’ decisions requiring payment of a notified sum are ordinarily enforced summarily and without set-off. A party that has not paid the notified sum cannot ordinarily commence a true-value adjudication concerning matters in the same payment cycle. The court may consider set-off between two adjudication decisions only in limited circumstances, including where both decisions are valid and enforceable and each has been brought before the court for enforcement. Payment applications are assessed by their substance. Different dates or labels do not necessarily create different payment cycles where the applications concern the same completed work and arise from the same final-account process.

The claimant sought summary judgment to enforce an adjudication decision requiring the defendant to pay a notified sum arising from an interim payment application. The defendant had not issued a payment notice or pay less notice.

After that decision, the defendant obtained a second adjudication decision concerning valuation of work referred to in an earlier interim payment application. It sought to rely on that decision by way of set-off, but had not issued separate enforcement proceedings. The central issues were whether the court should consider the proposed set-off and, if so, whether the two adjudications concerned different payment cycles.

1. The claimant’s enforcement application succeeded. The defendant was required to pay the sum awarded in the first adjudication. The proposed set-off was refused.
2. Adjudication awards are generally to be enforced summarily and expeditiously. Set-off is exceptional. Where reliance is placed on a second adjudication decision, the court should first determine whether both decisions are valid and enforceable. Separate enforcement proceedings are ordinarily required so that the validity and enforceability of the second decision can properly be addressed.
3. The defendant’s failure to issue enforcement proceedings in respect of the second decision made it inappropriate to exercise the set-off discretion. The claimant had raised a jurisdictional challenge to that decision, and the court lacked the evidence and argument necessary to determine it fairly.
4. The September and December 2023 applications concerned the same work and arose from the parties’ final-account discussions. The fact that they bore different dates did not establish different payment cycles. It was artificial, on the facts, to treat them as separate cycles.
5. The defendant could not deduct statutory CIS payments from the adjudicated sum. Any deductions should have been identified in a payment notice or pay less notice, or expressly provided for in the adjudicator’s decision. The full notified sum therefore remained payable.