The case of Bellway Homes Limited v Surgo Construction
10 January 2024
In a judgment handed down yesterday (Bellway Homes Limited v Surgo Construction [2024] EWHC 10 TCC) and published by counsel for the successful claimant here, the TCC has confirmed that an adjudicator can have jurisdiction to determine the sum due to a party on either a technical or true value basis within the same adjudication.
Roundel Manufacturing (“Roundel”) made an application for payment on 22 December 2022 seeking £152,225.23 inclusive of VAT. Surgo did not serve a valid payment notice or pay less notice.
Roundel asked an adjudicator to value its December 2022 account on the ‘Smash & Grab’ basis or, if that claim was not made out, on a ‘True Value’ basis.
Surgo objected to the referral; asserting that Roundel was referring multiple disputes as part of the same adjudication and therefore that the adjudicator did not have jurisdiction to deal with them. The adjudicator proceeded on the basis that he did have jurisdiction. He determined that Roundel’s application for payment was invalid, but nevertheless proceeded to decide the matter on the True Value basis, valuing the account at £148,431.70, plus VAT and interest.
Roundel then assigned its interest in the decision to Bellway Homes, which sought to enforce the decision.
DJ Baldwin, sitting in the TCC at Liverpool, decided that an adjudicator did have jurisdiction to determine the dispute on the alternate bases, as the dispute referred was, in essence, the sum due to Roundel under its December 2022 application for payment.
The Judge rejected the attempt to separate the ‘Smash & Grab’ and ‘True Value’ aspects of the dispute as “too legalistic” and accepted that these were ultimately “two routes to the same objective”.
The Birketts view
It is interesting that it has taken until now for this point to receive judicial authority. We have seen dual referrals previously and the uncertainty of the jurisdiction has acted as a lever for settlement.
Going forwards, referring parties will no longer need to decide if they want to refer solely on the technical basis or bring in the True Value. It seems to us that there will be many occasions where the costs savings of a purely technical referral will still be preferred, but it is very useful to know that, in cases where the technical argument is perhaps weaker, a referring party can hedge its bets.
As always, this lands hard on responding parties who may now find themselves more often having the defend adjudications on twin bases, with the additional costs and time pressure that will bring. However, the case acts as a useful reminder of the importance of serving valid payment and pay less notices, which would therefore preclude any adjudication on a smash and grab basis.
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John Fawcett
Services
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at January 2024.