BREYER GROUP PLC v ADAM MICHAEL SCAFFOLDING SERVICES LTD

 

BREYER GROUP PLC v ADAM MICHAEL SCAFFOLDING SERVICES LTD

Technology and Construction Court

Joanna Smith QC

12 June 2018

The adjudicator’s decision for the sub-contractor to repay the contractor what he held was an overpayment should be enforced despite the fact that the adjudication was begun by the sub-contractor for what it unsuccessfully alleged was a shortfall in payment by the contractor

 

The contractor employed the sub-contractor to provide scaffolding services. The contractor paid the sub-contractor just over £4.5 million. The sub-contractor said it was entitled to more and claimed a final account gross sum of some £5.6 million, which, after giving credit for the sum paid, left a balance due to them of approximately £1 million. The contractor on the other hand contended that the true value of the final account was much lower and it had therefore overpaid the sub-contractor. The sub-contractor referred this payment dispute to adjudication. The adjudicator was decided the value of the final account works was £2.5 million. It followed there had been an overpayment of £2.013 million which the adjudicator ordered the sub-contractor to repay to the contractor. The sub-contractor failed to make any payments to the contractor.

 

The contractor sought enforcement of the adjudicator’s decision. The sub-contractor, in opposing enforcement, contended that (i) Its adjudication notice was not wide enough to confer jurisdiction on the adjudicator to make an award to the contractor or to order any payment from it to the contractor (ii) The decision was one that no adjudicator could reasonably have made in the light of the evidence and the way it was dealt with by the adjudicator (iii) The contractor had been paid for the works by its employer and (iv) Enforcement would render it insolvent.

 

Joanna Smith QC rejected the sub-contractor’s contentions and enforced the adjudicator’s award. She stated that the sub-contractor’s notice of adjudication was wide enough to allow the adjudicator to determine the value of the final account and to order the refund of any overpayment. The reasonableness or otherwise of the decision was irrelevant on enforcement unless, perhaps, it could be said to be ‘outrageously irrational’ and that was not the case here. The criticisms of the evidence were no defence to enforcement. There was no evidence before the adjudicator as to the payment position under the main contract. Even if there had been and he had failed to take it into account, such an error would not have been a defence. The evidence before the court did not demonstrate that the sub-contractor was insolvent. There were no special circumstances to justify a stay of execution of the summary judgment she ordered and nothing to prevent the sub-contractor from bringing proceedings to correct the alleged errors.