J & B Hopkins Limited V Trant Engineering Limited
Monday, 4 May, 2020
 EWHC 1305 (TCC)
Mr Justice Fraser
Adjudication; Adjudicators’ decisions; Enforcement; Interim payments; Stay of execution
This was an application to enforce an adjudicator’s decision by summary judgment. Trant Engineering Limited (“Trant”) sub-contracted with J & B Hopkins Limited (“J&B Hopkins”) to carry out M&E works at a recycling plant. The original sub-contract sum was £1.669 million and it was alleged that the total value would eventually reach between £3.3 and £3.5 million. The adjudication concerned Interim Payment Number 26. J&B Hopkins submitted Interim Application 26 on 30 July 2019, claiming that approximately £812,000 was due. J&B Hopkins alleged that Trant failed to issue an effective payment or payless notice in response to Application 26. The Claimant issued a notice of adjudication on 17 January 2020 and the adjudicator decided that the amount set out in Application 26 was due and payable to J&B Hopkins.
Trant did not resist enforcement on the basis that the adjudicator had breached its jurisdiction or reached its decision in breach of natural justice in the way that the Adjudication was conducted. Instead, Trant alleged that, by the time J&B Hopkins commenced the adjudication in January 2020, they were no longer entitled to the amount claimed as due in Application 26. Trant alleged that any entitlement had been superseded by subsequent interim payment cycles, where further applications were the subject of valid payment and payless notices, which ultimately corrected the sum payable under the sub-contract following Application 26. This procedure was referred to as the “correction principle” and Trant alleged that it would be manifestly unjust to permit enforcement when Application 26 was no longer due and that such an order would undermine the “correction principle”.
The Judge recognised that a “correction principle” existed. However, he held that the correction principle could not be applied to lead to a result that the amount set out in Application 26 was not due at all. Application 26 remained due as the relevant notices had not been issued by Trant. The Judge did not consider that enforcement would undermine the correction principle, holding that Trant’s approach ignores the ability of parties to a qualifying contract to adjudicate at any time and that disputes relating to earlier payment cycles do not disappear when subsequent applications are made. The Judge held that the adjudicator’s decision should be enforced by way of summary judgment.
The Judge finally considered the stay of execution application advanced by Trant, who alleged that such an order was necessary to prevent manifest injustice. The Judge did not consider that unusual features existed whereby manifest injustice would be caused if a stay was not ordered. Furthermore, the Judge did not consider that there was evidence about the precarious position of Trant and which demonstrated potentially serious or irreparable prejudice which might be experienced by Trant if a stay of execution was not granted. The Judge reinforced the necessity of serving payless and payment notices on time and that failure to do so has certain consequences. The application for a stay of execution was dismissed.
Mr Justice Fraser ended his judgment by restating that the Court will enforce Adjudicator’s decisions if they are issued within jurisdiction and without material breaches of natural justice. He was also critical of the Defendant’s attack on the Claimant for having brought a “smash and grab” adjudications:
“All of those statements reflect disapproval which, in my judgment, is disapproval not of the dispute that was adjudicated upon but must be disapproval of the Parliamentary framework which has been imposed on construction contracts. This framework very carefully sets out what happens when notices are not complied with. Whether such disapproval is merited or not is a wholly subjective point of view. Serving the relevant and required notices is not an impossible or Herculean task. Failure to do so has certain consequences. These are widely known and this judgment provides another example.”