Article

The end of “smash and grab” adjudications as we know them?

11th March 2024

In Bellway Homes Ltd v Surgo Construction Ltd [2024] EWHC 10 (TCC), DJ Baldwin in the Liverpool District Registry of the Technology and Construction Court (TCC) dealt with a summary judgment application to enforce the true value adjudication decision.

The application was opposed on the basis that the adjudicator lacked or exceeded his jurisdiction. The judge enforced the adjudicator’s decision.

Adjudication

Roundel Manufacturing pursued Surgo through an adjudication following non-payment of a notified sum. Roundel’s primary “smash and grab” position was that Surgo failed to issue a payment or a pay less notice in response to its interim application for payment. In the alternative, Roundel claimed that it was entitled to an amount calculated on a substantive basis (a “true value” claim).

The adjudicator decided that Roundel’s application failed to comply with the statutory requirements for the purposes of a “smash and grab” claim as it was not in substance, form and intent an application for payment, and it was not free from contradiction and ambiguity. He then went on to consider the “true value” entitlement as part of Roundel’s alternative claim and made an award.

Roundel assigned to Bellway all of its rights in the sums due pursuant to the adjudicator’s decision and Bellway commenced enforcement proceedings to enforce the adjudicator’s decision.

Enforcement proceedings

Surgo contended that the adjudicator had no jurisdiction to determine the dispute as multiple disputes had been referred without consent and subsequently determined by the adjudicator. Surgo argued, in the alternative, that the adjudicator exceeded his jurisdiction by determining a true value entitlement, having decided that the payment application was invalid. These were novel jurisdictional challenge arguments which had not been previously decided.

Judgment

The judge found that the dispute referred was a single dispute as it concerned a failure to pay any sum due to the claimant by the final date for payment. The judge also found that the adjudicator did not exceed his jurisdiction by assessing the alternative claim in respect of the true value of the payment application.

The judge made the point that despite the adjudicator concluding that the application was invalid for the purposes of the “smash and grab” claim – it failed to comply with the requirements regarding payment applications as default payment notices under the Construction Act 1996 –  the adjudicator did not consider the application as being incapable of being an application for payment in any circumstances.

The jurisdictional challenges were rejected and summary judgment was granted.

Concluding remarks

It is quite unusual for a party seeking payment to request that the adjudicator decides the true value of its application as part of a smash and grab adjudication and therefore it remains to be seen whether this will become the new trend.