DSVG FAÇADE LTD v CONNEELY FACADES LTD

 

DSVG FAÇADE LTD v CONNEELY FACADES LTD

Technology and Construction Court

Joanna Smith QC

13 June 2018

The contractor was not entitled to oppose enforcement of the adjudicator’s award to the sub-contractor of the sum invoiced on the ground that it had failed to serve a valid payment or pay less notice by raising the defence that the value of the work carried out was less than the sum invoiced

 

 

The sub-contractor supplied labour to carry out cladding works for the contractor. The sub-contractor submitted an invoice, part of which the contractor paid some months later. The sub-contractor referred the dispute over the unpaid part of the invoice to adjudication and claim payment on the basis that the contractor had not served a valid payment or pay less notice but in the alternative on the merits that its payment application had been rejected because of the contractor’s wrongful assessment and valuation of the works. The adjudicator found for the sub-contractor on the basis that there was no valid such notice and declined to deal with the alternative case regarding the merits of the valuation of the works. When the sub-contractor brought these proceedings to enforce the decision, the contractor opposed enforcement on the ground that the adjudicator’s refusal to deal with the issue of valuation meant that the adjudicator had failed to deal with the entire dispute referred to him and thus to exhaust his jurisdiction and was thereby in breach of the rules of natural justice,

 

Joanna Smith QC in rejecting the contractor’s contention and enforcing the decision held that found that on a proper construction of the referral documents there was no agreement to refer two disputes to the adjudicator. He could only decide one dispute, namely as to the sub-contractor’s entitlement to the notified sum in the absence of a valid payment or pay less notice. The adjudicator had decided that dispute, and having done so, there was no residual jurisdiction for him to consider and decide the separate dispute about the true valuation of the works which the contractor wished him to consider. It followed the adjudicator could not be in breach of the rules of natural justice for having decided not to consider the valuation of the works. In addition the contractor was not entitled to raise the valuation issue as a defence to enforcement. That was a different dispute to be dealt with in any separate proceedings which the contractor might choose to bring.