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A.T. Stannard v Tobutt [2014] EWHC 3491 (TCC): an unusual adjudication enforcement 24 Oct 2014

Akenhead J handed down judgment today in A.T. Stannard Ltd v Tobutt [2014] EWHC 3491 (TCC), a claim to enforce an adjudication decision that was challenged on unusual grounds. By the time of the hearing, the Defendants’ allegations in relation to bias and an unfair timetable had fallen away, to be replaced by a new argument to the effect that they were not the correct defendants. Their argument was that the contract between the Defendants (acting as a partnership) and the Claimant had been novated to a limited company the Defendants had later set up.

This argument had not been raised in the adjudication or in the evidence served in opposition to the claim for enforcement: it was raised for the first time in a draft defence served a few days before the enforcement hearing. The Defendants claimed that by virtue of the alleged novation, they had not been parties to a construction contract at the time of the referral to adjudication and the adjudicator therefore had no jurisdiction to determine the dispute.

The claimant submitted that there was no proper evidential basis on which the court could conclude that there had been a novation (or even that there was a realistic prospect of the Defendants establishing at trial that there had been a novation) and that, in any event, having participated in the adjudication without raising any jurisdictional challenge, the Defendants had waived any such challenge. The Claimant relied on GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2014] in which Ramsey J said:

“If the party does not raise any objection and participates in the adjudication then, even if there is a defect in the jurisdiction of the adjudicator, that party will create an ad-hoc jurisdiction for the adjudicator and lose the right to object to any decision on jurisdictional grounds.”

Akenhead J agreed. He held that, by participating in the adjudication without any reservation, the Defendants had waived any right to raise as a jurisdictional (or indeed as some sort of threshold) challenge the novation argument. Further, he held that, in any event, there was no effective evidential basis for the alleged novation. He said this:

“Whilst it is not necessarily a particularly burdensome exercise, and although the onus is on the claimant to show that that the defendant has no real prospect of successfully defending the claim, in practice a defendant to a summary judgment application raising a defence for the first time needs to identify that there is some realistically arguable defence. That can be a matter of law or of simple fact. Where in effect a factual basis of defence or in this case a challenge to the enforceability of an adjudicator’s decision is relied upon by the defending party, some credible evidence or basis has to be advanced, albeit that at this stage it does not have to be proved on a balance of probabilities.”

He rejected the Defendants’ application for an adjournment and further time to submit further evidence because there was no explanation as to why any such further evidence had not been filed either in accordance with the directions given by the court, at the time that the Defendants’ initial evidence was filed (well over a month before the summary judgment hearing) or even when a further witness statement was belatedly prepared. Akenhead J noted that:

“The primary purpose of the procedures developed by the TCC for the prompt hearing of summary judgement applications for the enforcement of adjudicators’ decisions was to satisfy the policy of the HGCRA to provide prompt resolution of disputes arising in connection with construction contracts.”

To allow an adjournment would run counter to this policy. The decision was enforced with costs.

Crispin Winser appeared for the Claimant, instructed by Helix Law.

The Judgment is available here.

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