If an adjudicator’s decision is within their jurisdiction and broadly in accordance with the natural justice rules, the decision will be enforced. There are, however, 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 v Wilson Mr Justice Coulson noted, in considering 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 pay less 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 a tacit 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/pay less notice. But what if there is no such degree of agreement?
The judge set out the approach that must then be adopted, which supersedes the TCC Guide’s guidance in paragraph 9.4.3. The defendant resisting summary judgment must issue a CPR Part 8 claim setting out the declarations sought or, at the very least, indicate in a detailed defence and counterclaim the final declarations it seeks. 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 means, for example, that the adjudicator’s calculation of relevant time periods is obviously wrong, or that their categorisation of a document as, say, a payment notice is not, on any view, capable of being described as such a document.
In the judge’s view, many applications currently 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. But 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.