Clegg Food Projects Limited v Prestige Car Direct Properties Limited

An adjudicator asked to determine a global valuation may reach an intermediate valuation based on the parties’ evidence and submissions, including a fair and reasonable rate or measurement for individual items. Natural justice does not require consultation on every element of the adjudicator’s reasoning.

Enforcement will be refused only where a breach of natural justice or excess of jurisdiction is realistically arguable and the breach is material, serious or of considerable potential importance to the outcome. The assessment is fact-sensitive. Broad-brush reasons may be sufficient where the dispute concerns a global valuation, provided the decision enables a reasonable reader to understand the result.

The claimant contractor applied for summary judgment to enforce an adjudicator’s decision concerning the valuation of an interim payment application under an amended JCT Design and Build contract. The adjudicator valued eight disputed changes, awarded extensions of time, reduced liquidated damages, and ordered payment of £541,880.12 plus VAT and interest.

The defendant argued that the adjudicator had breached natural justice by using fair and reasonable rates and a remeasurement without inviting further submissions, and that his reasons were inadequate. The issues were whether the decision was unenforceable, whether any part should be severed, and whether the alleged defects caused substantial injustice.

1. Enforcement. Summary judgment was granted to enforce the adjudicator’s decision. The defendant had not established a breach of natural justice or inadequate reasons. It was therefore unnecessary to consider severance.
2. Natural justice. Both parties had invited the adjudicator to determine the gross valuation or such other sum as he considered appropriate. That required consideration of the constituent items. The adjudicator was entitled to use his own professional judgment and determine a fair and reasonable rate from the material and submissions before him.
3. The issues had been fairly canvassed. The adjudicator’s valuations were within the range advanced by the parties or more favourable to the defendant. He was not required to consult the parties on every element of his reasoning or on an intermediate conclusion. The defendant’s item-by-item approach was excessively granular in the context of a global valuation.
4. Any breach would also have to be material and cause substantial injustice. The two less favourable assessments totalled less than £2,600, while the overall effect of the new rates benefited the defendant by more than £200,000. No material breach was established.
5. Reasons. The 88-page decision gave sufficient broad-brush reasons to enable the parties to understand the adjudicator’s conclusions in the round. Detailed workings for every sub-item were unnecessary where the adjudicator had been asked for a global valuation. The reasons were not so incoherent that a reasonable reader could not make sense of them.

First-instance decision on the claimant’s application for summary judgment to enforce an adjudication decision. No earlier decision in the same proceedings is stated.