JonJohnstone Construction Limited v Eagle Building Services Limited

Case reference: 
Unreported
Thursday, 29 June 2017

Key terms: 
Adjudication – Enforcement – Pay less notices – Summary judgments

In this case, Claimant JonJohnstone Construction Limited (“JC”) sought to enforce an adjudication decision dated 21 March 2017 which ordered the Defendant Eagle Building Services Limited (“EBS”) to pay the sum of £52,336.84 plus VAT.

JC, a sub-contractor, was engaged by EBS to carry out on-site prefabrication of steel bar reinforcement cages for foundations and other associated works. In March 2016, JC made an application for payment in the sum of £52,336.84 plus VAT. Disputing the amount, EBS made no payment. JC sent a further notice seeking the same amount in April. Subsequently, JC commenced an adjudication seeking payment of the sum set out in its April notice. The adjudicator held that the April notice was invalid because the March application was a valid and effective notice. JC commenced another adjudication seeking payment of the sum claimed in the March application. The second adjudicator decided that the March application was a valid notice and that EBS’ response was not a valid payment notice or pay less notice. Therefore, JC was entitled to payment of the amount stated as due in the March 2016 notice. EBS argued that the adjudicator lacked jurisdiction because the second reference was of the same or substantially the same dispute as the first adjudication and that it was not possible to re-adjudicate the same matter.

Jefford J. rejected EBS’ argument that the second adjudicator was asked to determine substantially the same dispute as it was clear that different disputes were referred. While there was a factual overlap, the first adjudication dealt with the entitlement to payment under the April notice whereas the subsequent adjudication dealt with the entitlement to payment under the March notice. Referring to the decision of Coulson J in Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC), it was decided that a series of adjudications can deal with separate legal issues as long as there was no attempt to re-adjudicate previously determined points. The first adjudication decision held that JC was entitled to be paid under the March notice and was not required to provide further notice. There was no breach of natural justice and no failure to consider properly the issues raised. Further, the second adjudication was not trying to make good a deficiency in the April notice. It was immaterial that the second adjudicator considered himself to be bound by the first adjudicator’s decision on the validity of the referral, as the first adjudicator made no finding on the entitlement to be paid under the first referral. JC was, therefore, entitled to summary judgment to enforce the second adjudicator's decision.

This case is a useful reminder that serial adjudications can be validly commenced   so long as they do not attempt to re-adjudicate previously determined points.

Key contact

Tel: +44 (0)20 7421 1986
Tel: +44 (0)20 7421 1986