Brown and another v Complete Building Solutions Ltd

Construction – Adjudication – Dispute – Respondent contractor issuing payment notice claiming final payment under contract – Appellant employers failing to pay – Dispute referred to adjudication in which adjudicator deciding payment notice invalid – Respondent issuing further notice for same sum and commencing second adjudication – Whether second adjudicator having jurisdiction – Whether dispute the same or substantially the same as that decided in first adjudication – Summary judgment given to enforce second adjudicator’s decision – Appeal dismissed The appellants employed the respondent contractor on the terms of a JCT Minor Works Building Contract (2011 ed) to demolish a dwelling-house at Ashtead in Surrey and to build a new house, for a price of £496,578 or such other sum as might become due under the contract. After completion of the works, the architect purported to issue a final certificate, which, however, was not issued in accordance with the relevant provisions of the contract. Clause 4.8.4 provided that, in such circumstances, the contractor could serve a payment notice stating what it considered to be the final payment due to it and that, unless the employer notified the contractor not later than five days before the final date for payment, it intended to pay a lesser sum, then the sum specified in the payment notice would become payable. The respondent sent a letter to the appellants claiming that a final payment of £115,450.50 was due. The appellants did not notify the respondent of any intention to pay a lesser sum, but did not pay the sum claimed, with the result that a dispute was referred to adjudication pursuant to the Scheme for Construction Contracts (England and Wales) Regulations 1998. The adjudicator found that the respondent’s letter was not a valid payment notice for the purposes of clause 4.8.4, partly because it was not expressed in such a way as to make clear that was intended to be such a notice, and that accordingly no sum was payable. Thereafter, the respondent sent a further letter claiming a final payment and issued a second notice of adjudication. The appellants disputed the adjudicator’s jurisdiction on the ground that he was being asked to decide the same, or substantially the same, dispute as had been decided in the first adjudication, contrary to regulation 9.2 of the Scheme for Construction Contracts, since the same sum of money was in issue in both disputes. The second adjudicator found that the respondent’s second letter was an effective notice under clause 4.8.4 and that the appellants’ refusal to make payment created a dispute which was not the same or substantially the same as the one previously decided. He ordered the appellants to pay £115,440.46 to the respondent, with interest, plus his fees of £1,944. The respondent applied successfully to the court for summary judgment to enforce the second adjudicator’s decision. The appellants appealed, reiterating their contention that the second adjudicator had lacked jurisdiction. Held: The appeal was dismissed. When asking whether the dispute referred to an adjudicator was the same, or substantially the same, as had already been decided in an earlier adjudication, the starting point was the adjudicator’s view of whether one dispute was the same or substantially the same. That was a question of fact and degree and the court should give due respect to the adjudicator’s decision: Quietfield Ltd v Vascroft Construction Ltd [2006] EWCA Civ 1737; [2006] PLSCS 268, Harding (t/a MJ Harding Contractors) v Paice [2015] EWCA Civ 1231; [2015] PLSCS 342 and Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358 applied. In the instant case, the second adjudicator had correctly concluded that he was not considering the same or substantially the same dispute as had been decided in the first adjudication. While the second adjudicator had recognised that both parties were bound by the express finding in the first adjudication as to the invalidity of the architect’s final certificate and the respondent’s first payment notice, he was being asked to decide whether a different notice, served several months later, had different consequences. Although both adjudications were dependent on the ineffectiveness of the final certificate and both claimed the same sum, the respondent was not seeking the redetermination of any matter that had been decided by the first adjudicator. The relevant event was the respondent’s second payment notice issued pursuant to clause 4.8.4 of the contract. Neither that notice nor the consequences which flowed from it, namely the entitlement to be paid if no counternotice were served, gave rise to disputes which had been referred to the first adjudicator. The respondent was not making good a shortcoming in the earlier letter, but was instead approaching its claim via a new and different route which relied on the later letter and thereby raised a different dispute. While the analysis might have been different had the respondent tried in some way to cure a defect in the earlier notice so as to rely on it, that was not the position here. It was the new notice, and only the new notice, which founded the respondent’s entitlement to be paid: Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC); [2008] PLSCS 279 and HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 (TCC) considered. Dr Timothy Sampson (instructed by direct access) appeared for the appellants; Richard Bradley (instructed by CE Law, of Birkenhead) appeared for the respondent. Sally Dobson, barrister Click here to read a transcript of Brown and another v Complete Building Solutions Ltd