In the recent case of Bellway Homes Ltd v Surgo Construction Ltd [2024] EWHC 10 TCC the Technology and Construction Court (TCC) confirmed that an adjudicator could determine the sum due to a party on either a technical (smash and grab) or true value basis, where referred by a party as alternative claims within the same adjudication.
Background
Surgo Construction (Surgo) engaged Roundel Manufacturing (Roundel) as a subcontractor in connection with the supply and installation of kitchens for a building development project.
Roundel made an application for payment on 22 December 2022 for the sum of £152,225.23 (inclusive of VAT). Surgo did not submit a valid payment or pay less notice and failed to make payment of the sum.
The parties entered into dispute and Roundel referred the dispute to adjudication. In its referral, Roundel asked an adjudicator to determine the sum due on a "smash and grab" basis (in the absence of a valid and timely payment notice or pay less notice) or, if that claim was not made out, to determine the sum due on a true value basis (where the adjudicator carries out a valuation of the payee’s application to determine the "true value" of the claim).
Surgo raised an objection to the referral on the basis that Roundel was effectively referring multiple disputes as part of the same adjudication and therefore the adjudicator did not have jurisdiction.
However, the adjudicator proceeded on the basis of Roundel’s referral and determined that although Roundel’s payment application was in fact invalid (and therefore the "smash and grab" argument failed) the adjudicator assessed the true value of the application and awarded Roundel the sum of £148,431.60 (plus VAT and interest).
Enforcement of the adjudicator’s decision
Roundel assigned its interest in the decision to Bellway Homes (Bellway) who sought to enforce the adjudicators decision in the TCC.
The court decided that the adjudicator did have jurisdiction to determine the dispute.
DJ Baldwin found that this was a single dispute and the notice of adjudication “clearly characterised the dispute as a failure to pay any sum due to the Claimant by the final date for payment, whether by means of a notified sum or by way of a substantive amount due”. He agreed with Bellway that “the character of this matter is that there are two routes advanced to the same goal of determining a sum owned”.
The court concluded that only one dispute had been referred to the adjudicator meaning that the adjudicator had jurisdiction and therefore Bellway was entitled to summary judgment and enforcement of the adjudicator’s decision.
Key takeaways
This case serves as a reminder of the importance of serving valid and timely payment applications and notices by both parties.
Perhaps the most important takeaway is that if worded correctly, it is possible for a party to advance a true value claim in the alternative to a "smash and grab" claim, within the confines of a single referral to adjudication, as two alternative routes to recover the same sum due. This has the potential to save time and money and avoid multiple adjudications over the same disputed sum. This may be particularly helpful for those parties claiming sums in circumstances where there is some doubt as to whether the relevant payment application or subsequent notices are valid.
Claire Perry
Phoebe Starbuck