Friday, 10 March 2023

J & B Hopkins Ltd v A&V Building Solution Ltd

[2023] EWHC 301 (TCC)

J&B sought summary enforcement of an adjudication decision. The dispute arose out of a sub-contract under which A&V, as subcontractor, undertook to carry out plumbing installation works at a university campus. In the Referral, A&V had alleged that J&B was in breach of the sub-contract in a number of respects and that J&B were unreasonably withholding sums of some £430k. The Adjudicator was requested to:

“to review and decide on matters pertaining to the Referring Party’s claim for the breaches and subsequent Final Account for outstanding payment/late payments considered due for the works … in the sum of £455,526.53 plus vat or such other sum as the Adjudicator shall determine …”

The Adjudicator decided that A&V had failed to prove any entitlement to the sums claimed and, having declared that the true value of the sub-contract works was £289k, ordered that A&V pay to J&B a balance of £83k as well as his fees. The day before the enforcement hearing, A&V issued an application asking the Judge, to suspend the enforcement proceedings and issue judgment in A&V’s favour. A&V said that J&B had not complied with the TCC Pre-Action Protocol by failing to respond to a letter of claim sent on behalf of A&V dated 2 December 2022. The letter set out A&V’s complaints about what had happened and sought payment of some £277k.

The Judge noted a number of problems with the application. It was only filed the day before the hearing. The Pre-Action Protocol does not apply to adjudication enforcement cases. It was, therefore, not necessary for J&B to respond to A&V’s letter as a pre-condition to proceeding with its application to enforce the Decision. Further, whilst J&B was “a little late in answering A&V’s letter,” it did so. The Judge refused the application. Either J&B was entitled to enforce the decision, or it was not. 

As a starting point, the Judge reminded the parties that there are only very limited grounds upon which adjudicators’ decisions will not be enforced by means of summary judgment. 

A&V made complaints about J&B bringing labour onto site to carry out A&V works before the expiry of the relevant notice periods. The Judge reviewed the evidence and concluded that there was no breach, and proper notices were given. It was also clear that the adjudicator had considered the points put forward by A&V and rejected them, largely on factual grounds. As the Judge noted, it was not for the court to judge whether the adjudicator had reached the correct conclusion on the facts as found by them or on the law.

A&V said that J&B had failed to grant extensions of time, which should have been granted, and that, by preventing A&V access to the IAuditor system, J&B prevented A&V carrying out its works. The Judge noted that there was nothing in the sub-contract which gave A&V a contractual entitlement to access JBH’s IAuditor. It was an internal paperwork system put in place to monitor quality and handovers. It was a software package, and not linked in any way to access to the site or workfaces. 

J&B was of the view that A&V had failed to explain by reference to contemporaneous records that it had suffered any delay and noted that A&V had not provided any critical path/cause and effect analysis in support of its alleged delays. It simply relied upon a series of emails which show that there was limited access to workfaces. Again, the Judge preferred the evidence of J&B. No evidence had been provided identifying the cause of a delay and the effect which it would have on the Completion Date. On a “labour only” sub-contract, a simple, “as planned” – v – “as built” programme, with annotations of any delaying factors would be reasonable to illustrate the effect of any delaying factors on the completion date. 

This part of the adjudicator’s decision was heavily criticised by A&V. Whilst the adjudicator had not mentioned the IAuditor system , the adjudicator had accepted the evidence from J&B relevant to that issue. 

Further A&V were concerned that the adjudicator here did not refer to an earlier decision where the adjudicator had found in favour of A&V. However, the position of A&V in the adjudication at issue was that the adjudicator was not bound by the earlier decision and could revisit issues from the earlier adjudication. The Judge also noted that the decision as to whether they were bound on a particular issue is a question for an adjudicator to answer. If the adjudicator reaches the wrong answer, it is not a matter going to jurisdiction, so long as the adjudicator has not, overall, decided the same or substantially the same dispute as has been decided in a prior decision. Ultimately, here, the Judge noted that the adjudicator had made a decision based upon factual and legal conclusions at which he was entitled to arrive. 

The Judge acknowledged that the decision must have come as a “considerable shock” to A&V. It was the party seeking payment, but ended up with a decision that it was liable to J&B. Second, whilst it had previously been successful before a different adjudicator, here the conclusions reached were directly contrary to those previously reached. There were also issues where it would have been better for the adjudicator to raise them with the parties before expressing a view upon it and where the adjudicator could have set out his reasoning.

However, did this all mean, as the Judge put it, that the decision was: “so riddled with error as to show that the Adjudicator did not do his duty under the Scheme and that there was in the result a denial of natural justice.”

The Judge said no. It amounted to saying that because of the numbers of errors made by the adjudicator, coupled with the perceived limited time spent on the adjudication, there had been bias and a breach of natural justice on the part of the adjudicator. The Judge was clear that there was nothing to justify the allegation of bias. The Judge noted that “delving” into what was put before the adjudicator revealed that, not unusually, they were faced with “a mass of material not always accompanied by a clear route map as to how best to proceed.” 

Here, the adjudicator had “entered into that process, in the limited timescale afforded to Adjudicators, diligently and thoughtfully.”  If there were some areas where, with the benefit of hindsight, things might have been done differently, there was nothing in the matters raised which crossed the threshold so as to establish a breach of natural justice which would justify refusing to enforce the decision. The decision was enforced. 

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