[2025] EWHC 943 (TCC)

In these proceedings, the Claimant (“LAPP”) seeks summary judgment of an adjudicator’s decision dated 24^th December 2024 (“the Decision”). The Defendant (“Formations”) resists this application on two main grounds: lack of jurisdiction and breach of natural justice.

These issues arise in the following context. In 2022, LAPP was engaged by Formations under a contract to carry out works relating to the refurbishment of the reception, business centre, and second and third floors at 71 – 75 Shelton Street, London WC2H 9JQ (“the premises”). The nature of that contract will be returned to below.

On 14 April 2023, LAPP sent to Formations what they asserted to be an application for interim payment under the contract (“the Application”). Formations did not issue any valid Payment Notice or Pay Less Notice. LAPP’s case is that the Application therefore became the Default Payment Notice. LAPP say that it was entitled to the notified sum of £120,000 (inclusive of VAT). This was not paid by Formations.

On 22 November 2024, LAPP commenced the adjudication by serving its Notice of Adjudication. On 25 November 2024, Ms Grace Cheng was appointed as the Adjudicator (“the Adjudicator”) by the Chairman of TECBAR.

Formations raised a jurisdictional challenge, namely that there were, in truth, numerous contracts between the parties and not a single contract as alleged by LAPP. It followed, according to Formations, that the adjudicator lacked jurisdiction because many disputes under numerous contracts had purportedly been referred to her.

On 12 December 2024, following extensive submissions, the Adjudicator rejected Formations’ jurisdictional challenge, concluding that the parties had entered into a construction contract and that there was only one contract.

The next day Formations, without prejudice to this jurisdictional objection, served their Response. Their central contention (see e.g. para 19(1)) was that the Application was not a valid application for payment.

On 24 December 2024, the Adjudicator issued the Decision in LAPP’s favour. She concluded that there was a notified sum of £120,000. LAPP was awarded payment of the notified sum and interest. Formations was to pay those sums within 14 days and was liable for the whole of the Adjudicator’s fees.

Formations has not paid the sums awarded by the Adjudicator to LAPP or the Adjudicator’s fees. Hence LAPP bring these proceedings and seek summary judgment.

Formations accept that an adjudicator’s decision is, in general, to be enforced but they raise in this court two matters:

Against that background, I propose to deal with this application under the following headings:

As already mentioned, this is an application for summary judgment. CPR Part 24.3 provides that:

“The court may give summary judgment against a claimant or defendant on the whole of a claim or on an issue if—

(a)

it considers that the party has no real prospect of succeeding on the claim, defence or issue; and

(b)

there is no other compelling reason why the case or issue should be disposed of at a trial”.

The notes in the White Book observe at note 24.3.3 that:

“If an applicant for summary judgment adduces credible evidence in support of the application, the respondent then comes under an evidential burden to prove some real prospect of success or other reason for having a trial: Sainsbury’s Supermarkets Ltd v Condek Holdings Ltd (formerly Condek Ltd) [2014] EWHC 2016 (TCC) at [13].”

It is well known that the court will, wherever possible uphold and enforce Adjudicators’ decisions. The Court of Appeal put this point as follows in Carillion Construction Limited v Devonport Royal Dockyard Limited [2006] BLR 15:

“85.

The objective which underlies the Act and the statutory scheme requires the courts to respect and enforce the adjudicator's decision unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair. It should be only in rare circumstances that the courts will interfere with the decision of an adjudicator. The courts should give no encouragement to the approach adopted by DML in the present case; which…may, indeed, aptly be described as "simply scrabbling around to find some argument, however tenuous, to resist payment"”.

Furthermore, it is not open to a party seeking to resist summary judgment to rely upon “surmise and micawberism”, i.e. the profession of a hope that something may turn up in due course. The defendant has to put material before the judge at the summary judgment stage which shows that there is a defence with a real prospect of success: see Iluminesia Ltd (ta AlterEgo Facades) v RFL Facades Ltd [2023] EWHC 3122 (TCC) paras 84-87.

Finally, it should be noted that the court needs to strike a balance between avoiding a mini-trial on the one hand and ensuring that points which can be determined summarily are so decided. See generally the summary of principles formulated by Lewison J (as he then was) in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] as approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 at [24]. I would note the following in particular from this summary, at (vii):

“it is not uncommon for an application under Pt 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.”

Formations’ point can be shortly stated. They submit that there was more than one contract between the parties. Thus, LAPP’s Notice of Adjudication purported to refer many disputes under numerous contracts, so that the Adjudicator did not have jurisdiction.

The relevant facts are not greatly in dispute. Mr Harris, a director of LAPP, sets out the background in a witness statement of 4^th December 2024, which was put before the Adjudicator on the jurisdictional challenge:

“6.

At some point in late May 2022, I was contacted by Mr. John O’Donnell, who I understood to be acting on behalf of 1st Formations to look at some potential works to quote the Property.

7.

I met him at the Property on 28 May 2022 where he asked me to first quote for some minor works, which I quoted for on 21 June 20221 and these were subsequently carried out on 29 June 2022. At that time, we did not enter into a written contract.

8.

While I was carrying out the minor works referred to in paragraph 7 above, Mr. O’Donnell requested that I provide a quotation for demolition and enabling works at the Property. This ended up being the quotation of 17 July 2022. Prior to preparing the quotation, Mr. O’Donnell took me on a tour of the entire building, explaining that additional works throughout the Property would also require quotations once 1st Formations had determined

their specific requirements. Unfortunately, as I will elaborate further in this witness statement, 1st Formations never definitively finalised a specification for any part of the project. Even when a specification was agreed upon, it was frequently altered, either through written communication or verbal instructions.

9.

The initial focus was on demolition on the second and third floors, referred to as the “Upper Floors” During this time, it was agreed that I would provide individual quotations for specific items of work. These quotations would then need approval from Mr. Graeme

Donnelly, the director of 1st Formations, before any work could begin. This process of submitting quotations for approval and awaiting confirmation became the basis of how we worked together throughout the project.

10.

I submitted quotations for various elements of the works as agreed. These quotations were reviewed by Mr. O’Donnell and then passed on to Mr. Donnelly for final approval. Once each tranche of work was completed, I issued an invoice. It was understood between us that payment for these invoices would be made promptly, and this formed part of the working arrangement throughout the project.”

Importantly, Mr Donnelly, the managing director of Formations, did not demur from this overall picture: see paragraph 7 of his witness statement dated 24^th February 2025.

As Mr Harris explains above, LAPP submitted an initial quotation for works to the roof, decking and reception of the premises on 21^st June 2022. This was accepted in writing by Formations on 28^th June 2022. These works proceeded, were invoiced and paid.

These undisputed facts clearly gave rise to a construction contract. The parties were ad idem as to scope, price and location, with the time for completion impliedly agreed to be a reasonable time. Thereafter, LAPP submitted further quotations, which were accepted. LAPP then carried out the agreed further works, raised invoices for the same and were paid.

Counsel did not suggest that there were any special rules which applied to the question whether a particular contractual document was a variation of or addition to an existing contract or, on the other hand, gave rise to a fresh contract. Each such document must be construed objectively, in the light of the circumstances pertaining when it was issued. In Investors Compensation Scheme v West Bromwich Building Society, [1998] 1 W.L.R. 896 at 912 Lord Hoffmann summarised the relevant principles as follows:

“(1)

Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

(2)

The background was famously referred to by Lord Wilberforce as the ‘matrix of fact’, but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.”

Applying this approach, it seems to me clear that the parties agreed, on an ad hoc basis, to expand the scope of the construction contract formed in June 2022, through a series of further accepted quotations. There was, therefore, a single contract (and a single dispute), albeit that this contract grew considerably in scope when compared to the initial June 2022 engagement. LAPP have therefore demonstrated that there is no real prospect of the court being persuaded at trial that there was more than one contract.

I have reached this conclusion for the following reasons:

As against this, Formations submit that:

Attractively as these points were presented, I do not find that they are at all convincing:

Additionally, LAPP submit that once the Adjudicator had decided that there was a construction contract, her decision-making process regarding whether there was more than one contract was a question of fact or law decided within her jurisdiction which cannot be challenged on enforcement.

In this connection reliance is placed upon the line of cases helpfully summarised in Viridis UK Limited v Mulalley & Company Limited [2014] EWHC 268 (TCC):

“…Miss Cheng relied upon the decision of Akenhead J in the Air Design case to which I have already referred. In particular she referred me to paragraph 22 of

his decision in that case, where he said this:

“22.

However, there are two further factors which effectively override considerations as to whether or not there were one, two, three or four contracts between the parties which establish that the Adjudicator was acting within his proper jurisdiction:(a) The substantive decision-making process upon which the Adjudicator had to embark in relation to the disputed claim put before him necessarily involved a consideration of whether there was more than one contract. It was thus within his

jurisdiction to decide in effect that there was one contract, albeit one that may have been varied by agreement.

(b)

It was thus a part of his jurisdiction to decide whether or not and if so to what extent the Basebuild Contract had been varied by the CPA and BMS Arrangements and indeed whether there were yet further variations ordered to the Basebuild Contract. There may be cases, and this is clearly one, where substance and jurisdiction overlap so that it is within the Adjudicator’s jurisdiction to decide as matters within his or her substantive jurisdiction whether there have been in

effect variations to the contract pursuant to which he or she has properly been appointed Adjudicator. It cannot then in those circumstances be a valid challenge to his or her jurisdiction that upon analysis he or she may be wrong as a matter of fact or law in determining that such variations were made to the originating contract as opposed to a series of later legally unconnected contracts.

(c)

...

I have therefore formed the view that the Adjudicator did have jurisdiction to rule on all the matters which he did decide in his Decision. Whether he was right or wrong to find or make the assumption that there was effectively one contract which was varied and whether he was wrong as a matter of fact or law in any other part of his decision is

immaterial. Any such errors do not mean that he does not have jurisdiction. Even if I was wrong about that conclusion, then my analysis that effectively the CPA and BMS Arrangements and the Supplementary Agreement were simply variations of the Basebuild Contract would apply.” …

77.

Akenhead J has revisited his decision in Air Design in two further decisions, the first being Camillin Denny Architects v Adelaide Jones & Co [2009] EWHC 2110 (TCC) and the second being Supablast v Story Rail [2010] EWHC 56 (TCC).

78.

In the Camillin case he commented on Air Design in the following terms:

“30.

That was a case in which there could be no doubt that the adjudicator was properly appointed under the first contract and there could be no argument that, in that capacity, he had jurisdiction to decide whether later "contracts" were simply variations of the first contract or stood on their own entirely separately as contracts in their own right. I am

not convinced that this case is authority for any proposition other than that there may be cases in which adjudicators properly appointed have jurisdiction to resolve jurisdictional issues if and to the extent coincidentally those issues are part of the substantive dispute

referred to adjudication.”

79.

In the Supablast case he referred both to Air Design and to Camillin and then said this:

“29.

One must bear in mind that variations, that is additional, altered, substituted or omitted works, are very common and almost invariably feature in payment disputes between construction contract parties. Many of the adjudication decisions which come to be considered by the TCC involve rulings on whether particular work has been varied and

if so what price is to be put on it. Generally, an adjudicator properly appointed under the original contract between the parties to the adjudication will have jurisdiction to determine whether or not particular work was or was to be treated as a variation under

or pursuant to that original contract. Of course, it is open to either party to argue that, although the particular work was extra to the scope of works covered by the original contract, it was not a variation envisaged or permitted by that contract. That argument will or may in effect give rise both to a substantive defence under the original contract (“there is no entitlement to payment because there is no variation") as well as a jurisdictional challenge (“the adjudicator has no jurisdiction to decide because the extra work cannot have been ordered under the original contract which gives the adjudicator jurisdiction in the first place"). This is where there will often be an overlap between jurisdiction and substance.”

In the present case, there was “an overlap between jurisdiction and substance.” The Adjudicator had to decide whether the Application was a valid application for payment. Of course, if there were several contracts, then a single application for payment would not have been valid (whatever other merits or defects it might have had). It follows that the Adjudicator’s decision on the substantive point necessarily contained within it a binding decision on jurisdiction.

For all these reasons, I therefore reject the jurisdiction arguments raised by Formations.

Adjudicators have a difficult task. They have to resolve often complex disputes at breakneck speed. They are deluged with submissions from all concerned, which are, equally, prepared in great haste. It has to be borne in mind, also, that adjudicators are required only to provide a temporarily binding solution to a dispute. Their decisions are not to be compared with those of the Supreme Court or Commercial Court, drafted and redrafted over a long period following extensive submissions from the finest advocates available.

The courts recognise these pressures and constraints. In Carillion, the Court of Appeal observed that:

“86.

It is only too easy in a complex case for a party who is dissatisfied with the decision of an adjudicator to comb through the adjudicator's reasons and identify points upon which to present a challenge under the labels "excess of jurisdiction" or "breach of natural justice"…The task of the adjudicator is not to act as arbitrator or judge. The time constraints within which he is expected to operate are proof of that. The task of the adjudicator is to find an interim solution which meets the needs of the case.

87.

In short, in the overwhelming majority of cases, the proper course for the party who is unsuccessful in an adjudication under the scheme must be to pay the amount that he has been ordered to pay by the adjudicator. If he does not accept the adjudicator's decision as correct (whether on the facts or in law), he can take legal or arbitration proceedings in order to establish the true position. To seek to challenge the adjudicator's decision on the ground that he has exceeded his jurisdiction or breached the rules of natural justice (save in the plainest cases) is likely to lead to a substantial waste of time and expense as,

we suspect, the costs incurred in the present case will demonstrate only too clearly.”

(See also to similar effect: CG Group Ltd v Breyer Group Plc [2013] EWHC 2722 (TCC) at para 31(e)).

In respect of a “frolic” complaint (that is to say, that the adjudicator has decided the dispute on a point not put before him or her), the case of Roe Brickwork Ltd v Wates Construction Ltd [2013] EWHC 3417 (TCC) provides a helpful summary of the approach, with emphasis added:

“22.

It is also well understood that an adjudicator must observe the rules of natural justice. In this context, that means that he should not decide a point on a factual or legal basis that has not been argued or put forward in the submissions made to him: see Balfour Beatty Construction v London Borough of Lambeth [2002] BLR 288. However, this rule is often easier to state than to apply.

23.

If an adjudicator has it in mind to determine a point wholly or partly on the basis of material that has not been put before him by the parties, he must give them an opportunity to make submissions on it. For example, he should not arrive at a rate for particular work using a pricing guide to which no reference had been made during the course of the referral without giving the parties an opportunity to comment on it.

24.

By contrast, there is no rule that a judge, arbitrator or adjudicator must decide a case only by accepting the submissions of one party or the other. An adjudicator can reach a decision on a point of importance on the material before him on a basis for which neither party has contended, provided that the parties were aware of the relevant material and that the issues to which it gave rise had been fairly canvassed before the adjudicator.”

As regards failing to take into account defences, the relevant law is set out in KNN Coburn LLP v GD City Holdings Ltd [2013] EWHC 2879 (TCC), again with emphasis added:

“48.

A number of authorities have referred to the question of natural justice in the context of adjudications. I respectfully adopt and endorse the judgment of Coulson J in Pilon Limited v Breyer Group Ltd [2010] EWHC 837 where he reviewed relevant authorities from [17] and provided a summary of the relevant principles at 22. For present purposes it is sufficient to set out his summary, which was:

22 As a matter of principle, therefore, it seems to me that the law on this

topic can be summarised as follows.