If an adjudicator's decision is within his or her jurisdiction and broadly in accordance with the rules of natural justice, the decision will be enforced. However, there are two narrow exceptions:
- where there is an admitted error which the court can correct; and
- where a case involves the proper timing, categorisation or description of a payment application or notice, or payless notice.
In Hutton Construction Ltd v Wilson Properties (London) Ltd (2017 EWHC 517) Justice Coulson noted – regarding the second category – the "proliferation" since 2015 of "smash and grab" adjudication claims, based on alleged failures to serve proper or timely payment applications and notices, and payless notices. In a number of these cases the defendant had issued a claim under Part 8 of the Civil Procedure Rules, challenging the adjudicator's decision and seeking a final determination in a court declaration. They all involved a significant degree of agreement between the parties and the understanding that the parties' rights and liabilities turned on whether the particular notice had been served in time and/or was a valid application for payment, or payment or payless notices. However, what if there is no such agreement?
The judge set out the approach that must be adopted, which supersedes the Technology and Construction Court Guide's guidance in Paragraph 9.4.3. Defendants resisting summary judgment must issue a Civil Procedure Rules (Part 8) claim setting out the declarations sought or, at least, indicate in a detailed defence and counterclaim the final declarations they seek. They must be able to demonstrate that there is a short, self-contained issue in the adjudication which they continue to contest, with clear-cut consequences, that requires no oral evidence or elaboration beyond what can be provided during the enforcement hearing and which, on a summary judgment application, it would be unconscionable for the court to ignore. In practice that would mean, for example, that the adjudicator's calculation of relevant timeframes is wrong, or that his or her categorisation of a document (eg, a payment notice) is not capable of being described as such.
In the judge's view, many applications made on this basis by disgruntled defendants and which are not the subject of the agreed process are an abuse of the court process. A defendant who unsuccessfully raises this sort of challenge on enforcement will almost certainly have to pay the claimant's costs of the entire action on an indemnity basis. However, if the claimant does not agree to the defendant's proposal to deal with the issue on enforcement, and the court concludes that the issue does fall within the limited exception, it is the claimant who runs the risk of being penalised in costs.
For further information on this topic please contact Chris Fellowes at Mayer Brown International LLP by telephone (+44 20 3130 3000) or email (firstname.lastname@example.org). The Mayer Brown International LLP website can be accessed at www.mayerbrown.com.
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