Abbey Developments Ltd v PP Brickwork Ltd

The contractor was not entitled to reduce the quantity of the sub-contract work by removing all outstanding work from the sub-contractor by reason of its alleged poor performance under the variations clause which was in standard form

Technology and Construction Court
His Honour Judge Humphrey LLoyd QC
4 July 2003
The project was the construction of a housing estate. The labour only sub-contractor for brickwork and blockwork brought adjudication proceedings. The adjudicator decided that the contractor was in repudiatory breach of contract for having effectively taken away from sub-contractor the remainder of its work and was entitled to damages in a specified sum. The sub-contractor brought court proceedings to enforce the decision by way of summary judgment. The contractor brought court proceedings in which it sought declarations to the effect that it had been entitled to reduce the quantity of the sub-contract works by reason of the provisions of its invitation to tender and/or sub-contract order. It was common ground that if the contractor was granted the declarations it sought, the dispute which led to the adjudication would be resolved in the contractor’s favour with the result that the decision would be unenforceable. Conversely it was common ground that if the contractor were to fail completely in its application, the decision would be enforceable.
Judge Lloyd held that the contractor was not entitled to a declaration that it was in principle contractually entitled by reason of such performance to reduce the quantity of the sub-contract work by removing all outstanding work from the sub-contractor. This was on the basis that the variations clause was a standard one which did not confer on the contractor the right to take work away from the sub-contractor so that it could be done by others and that the provision in the invitation to tender, whereby the contractor reserved the right, without vitiating the sub-contract or giving rise to a claim from the sub-contractor, to vary the number of houses and to renegotiate rates or to suspend the contract and retender the works, was not connected with the variations clause
Advice Note
This case represents a rare example of an adjudication decision not being enforced by the courts. This was because the defendant made an application to the court quickly enough to have the dispute which formed the subject matter of the decision determined by the court before enforcement of the decision itself. However, this does not detract from the general rule that adjudication decisions will be enforced by the court before the court or arbitrator have finally resolved the dispute.