St Austell Printing Company Ltd v Dawnus Construction Holdings Ltd (TCC - 21.1.2015)
The employer was wrong to contend that the adjudicator had no power to order payment of part only of interim payment application 19 when the contractor limited its claim in its notice of adjudication to the proper valuation of 115 variations.
1 January, 2015
ST AUSTELL PRINTING COMPANY LTD v DAWNUS CONSTRUCTION HOLDINGS LTD
Technology and Construction Court
21st January 2015
The contract incorporated JCT DB 2005. The contractor submitted interim payment application 19 which, whilst not a final account, was a comprehensive application taking into account that practical completion had taken place with substantial supporting documentation. The contract administrator issued a “nil” valuation in respect of the application and the contractor referred the resulting dispute to adjudication. The contractor purported to limit the scope of the adjudication to the measured value of 115 specific changes and variations by stating in its notice of adjudication that it limited submissions in the adjudication to 115 changes within interim certificate 18, which made up the bulk of the difference between the parties.
Coulson J rejected the employer’s contention that the adjudicator had no power to order payment of part only of interim payment application 19 when the contractor limited its claim in its notice of adjudication to the proper valuation of 115 variations.
The contractor’s “pruning” of its original claim was not only permissible but was a process that was to be encouraged. If, for example, the claimant’s interim application for payment is for measured work and loss and expense but the loss and expense claim could be difficult to present in an adjudication, he may decide that he will instead focus on just the straightforward claim for measured work. Claims advanced in adjudication should be those claims which the referring party is confident of presenting properly within the confines of that particular jurisdiction. The employer was liable to make an interim payment under the contract of at least the sum awarded by the adjudicator and wrong to submit that its liability was only to pay on the basis of the whole of interim application 19 (and not just the "cherry-picked" elements). The mere fact that the contractor limited its claim did not limit or prevent the employer from defending that claim and raising its own cross-claim by way of set-off, whatever the notice of adjudication or the referral might have said assuming that (i) The employer did have some sort of cross-claim for overpayment, liquidated damages or damages for defects and (ii) This cross-claim arose for assessment at the same time as interim application 19 and would have reduced or even extinguished the sum due by reference to the measured work element of the 115 changes.