Clerkenwell Lifestyle (UK) Limited v HG Construction Limited

An adjudicator’s decision will generally be enforced where the adjudicator has addressed the dispute referred, even if the decision is alleged to be legally or factually wrong. A breach of natural justice based on failure to consider a defence requires the defence, or the facts constituting it, to have been raised in the adjudication. A party cannot retrospectively recast an agreed extension of time under a construction contract as a separate binding agreement revising completion dates. Contractual agents possess only the authority expressly conferred, or authority reasonably incidental to their specified functions.

Clerkenwell sought summary judgment enforcing an adjudicator’s decision awarding it £955,943.43 in liquidated damages. HG brought Part 8 proceedings seeking declarations that the decision was unenforceable for excess of jurisdiction or breach of natural justice, and that correspondence dated 8 February 2023 created a binding agreement revising the contractual completion dates.

The adjudicator had considered the parties’ delay evidence and fixed revised completion dates by reference to the original contractual dates and the critical delay identified. HG argued that he should instead have treated the February 2023 correspondence as fixing binding revised dates and should have added later extensions of time to those dates.

1. Enforcement. The adjudicator addressed the broad dispute referred: the applicable completion dates, HG’s entitlement to extensions of time and Clerkenwell’s entitlement to liquidated damages. His decision was therefore enforceable even if his approach was alleged to be erroneous.
2. A respondent must raise the defence or the matters constituting it before a failure to consider that defence can amount to a breach of natural justice. The issue is fact-sensitive, and an argument may exceptionally be treated as raised even if not labelled as a defence. Here, HG’s Response merely referred to an agreed extension of time in the context of the scope of the Sections. It did not identify a binding agreement fixing the starting point for later extensions. That case was also inconsistent with HG’s expert evidence and delay analysis.
3. The adjudicator did not decide a matter for which neither party had contended. Both parties had asked him to determine extensions of time by reference to the whole period of the Works. Clerkenwell’s statement that it did not seek to reverse earlier contractual extension-of-time awards did not amount to acceptance of a separate binding agreement.
4. The 8 February correspondence, read in context, recorded agreement to operate the contractual extension-of-time mechanism. It did not disclose an intention to create a free-standing agreement revising completion dates. The wider proposals were complex, partly expressed as agreements in principle, and lacked sufficient clarity to establish the alleged contract. Subsequent conduct supported the conclusion that neither party had acted on the basis of such a binding agreement.
5. Article 3 limited the Employer’s Agent’s authority to functions under the Contract. It did not confer authority to vary the contractual bargain. The alternative authority argument therefore could not succeed, although it was unnecessary to decide the consideration issue.
6. The Part 8 declarations were refused. Summary judgment was granted enforcing the adjudicator’s decision, and HG was ordered to pay Clerkenwell £955,943.43 together with the adjudicator’s fees.

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