Building firm wins £700,000 payment dispute with developers

A building firm has won a dispute over a £700,000 payment after the High Court upheld a decision made by an adjudicator.

The firm had been contracted by some developers to provide pre-construction services for a proposed retirement village. Once the work was complete, it submitted an invoice but didn’t receive payment.

The firm then served a payment notice under the Local Democracy, Economic Development and Construction Act 2009.

It received no response so it referred the matter to an adjudicator who found that the sum of £705,558 was due from the developers. The firm then asked the High Court for summary judgment to enforce that decision.

The developers argued that it was a breach of natural justice for the adjudicator to order payment of such an excessive sum where the operation of complex payment rules was in dispute. The adjudicator had also failed to ask why no building contract had been entered into after the pre-construction works.

The court found in favour of the building firm. The judge said there were only two grounds on which enforcement of an adjudicator’s decision could be resisted: lack of jurisdiction and a breach of natural justice.

No issue had been taken as to the adjudicator’s jurisdiction, and neither of the developer’s arguments raised issues of natural justice. Therefore, the adjudicator’s decision ought to be enforced.

Please contact Neil O’Callaghan if you would like more information about the issues raised in this article or any aspect of contractual disputes and litigation.