This article summarises the judgment in Hutton Construction Lted v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC) which concerned an application for summary judgment to enforce an adjudicator’s decision in the sum of £491,944.73. The Defendant sought unsuccessfully to resist enforcement by arguing that the adjudicator’s decision was wrong. This judgment is significant as it addresses the practice of dissatisfied parties attempting to challenge the substance of an adjudicator’s decision as a defence to enforcement proceedings. Mr Justice Coulson strongly reaffirmed the established principles underpinning the Act, emphasizing the need for a swift, albeit potentially imperfect, resolution of disputes through adjudication.

Background
Wilson engaged Hutton to carry out the conversion of Danbury Palace in Chelmsford into 13 apartments and associated outbuildings. The contract incorporated the JCT Standard Building Contract Without Quantities 2011 with clauses 4.9-4.17 setting out an interim valuation/payment regime. Coulson J commented: “I consider that these provisions are prolix, convoluted and desperately difficult to operate in practice. I am unsurprised that they were the source of the disputes between the parties at the adjudication.”

In the notified sum dispute, the adjudicator rejected Wilson’s arguments that there was a valid interim certificate or pay less notice. The Part 8 claim asked the court to decide that the decision was incorrect because the Wilson notice: either amounted to a valid interim certificate notwithstanding that it bore the title ‘payless notice’ given that the contract does not prohibit the use of an interim certificate before the due date for payment; or was validly issued as a payless notice notwithstanding clause 4.13.1.3 of the contract because no interim payment notice has been physically given by the defendant.

General Principles
The judgment reiterates the fundamental principle that if an adjudicator has decided the issue referred to them and acted broadly in accordance with the rules of natural justice, their decision will be enforced, even if they have made an error. As Chadwick LJ stated in Carillion Construction Limited v Devonport Royal Dockyard Limited [2006] BLR 15, the need to have the ‘right’ answer has been subordinated to the need to have an answer quickly.

However, there are two exceptions to the rule in Carillion. In Caledonian Modular Limited v Mar City Developments Limited [2015] EWHC 1855 (TCC), Coulson J said:

“That is, of course, the general rule and it will apply in 99 cases out of 100. But there is an exception. If the issue is a short and self-contained point, which requires no oral evidence or any other elaboration than that which is capable of being provided during a relatively short interlocutory hearing, then the defendant may be entitled to have the point decided by way of a claim for a declaration.”

Here, he added another narrow exception, “an admitted error”, which he said could be exemplified by Geoffrey Osborne v Atkins Rail Limited [2010] BLR 363. He said that because the error was admitted by everyone, including the adjudicator, and because there was no arbitration clause, which meant that the court had the jurisdiction to make a final decision on the point, there were no reasons why the error could not be corrected.

Further, Coulson J gave three examples of when a short and self-contained point might be suitable as a Part 8 claim: the adjudicator’s construction of a contract clause is beyond any rational justification; the adjudicator’s calculation of the relevant time periods is obviously wrong; or that the adjudicator’s incorrect categorisation of a document e.g. a payment notice.

Conclusion
Mr Justice Coulson concluded that the Defendant’s challenge did not fall within the narrow exceptions and granted summary judgment in favour of the Claimant. Wilson did not initially clearly articulate their reasons for resisting enforcement or issue a prompt and specific Part 8 claim. Their eventual Part 8 claim lacked specific declarations and attempted to raise complex issues regarding the interpretation and validity of notices, which the judge deemed an attempt to rerun the entirety of the adjudication.

As a word of warning, unsuccessful challenges on substantive grounds are frowned upon. Coulson J said, “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.”