Support could also be drawn from the judgment of O’Farrell J in Kersfield Developments (Bridge Road) Ltd v Bray and Slaughter Ltd. 15 The accrued rights which ICI had under the contract before repudiation included a right to recover any over- payment already made to MMT. Such an analysis would not, however, be the same as a Final Assessment under the contract terms in accordance with the Termination Table, nor would it have been the same exercise as though MMT had repudiated the contract. The non contractual route - Restitution It was not necessary therefore to determine this alternative route given the above findings. Nor was it necessary to decide whether restitution might be granted where there had been a total failure of consideration for part only of the work. There was however another reason why ICI was entitled to be repaid any overpayment it had made to MMT, albeit it could be said to overlap (or more accurately perhaps, sit above) each of the two routes discussed above. This was because the total sum paid to MMT as at the date of the trial included sums paid pursuant to two adjudication decisions. MMT’s bullish approach was that no valid payment or pay less notice had been given so that MMT’s application became the notified sum for the purposes of section 111 of the Act. It was further contended that the question of what was due had been subject to “a judgment on the merits”. The only judgment was the order made in the enforcement proceedings. There was no “finally binding adjudicator’s decision” and there was no “judgment on the merits”. The nature of an adjudicators’ decision was one of “interim finality”. There were, sometimes, circumstances which changed the character of such decisions to ones that were finally binding. None of those circumstances pertained here. The nature of the cause of action a party had when seeking to recover sums paid to another under an adjudicator’s decision was considered by the Supreme Court in Aspect Contracts (Asbestos) Ltd v Higgins Construction plc 16 where the Court of Appeal found for Aspect and considered that the Scheme implied that any overpayment could be recovered 17 . Comment This case is reported at some length as it deals with several issues of importance when considering the nature of an adjudicator’s award and rights to payment and recovery of any overpayment. As to the very nature and character of an adjudicator’s award, in case there was any doubt, it is one of “interim finality” (previously commonly described in the reported cases as ‘temporarily binding’). It may in some circumstances become final as well as binding: essentially, if that is what the contract provides 18 , or the parties so agree. Otherwise the award of itself does not prevent either party from seeking a final determination from a court or arbitrator as to the sum properly due on the merits.
The adjudicator’s decision even on the merits and following a full valuation is not final except on a second adjudicator. Furthermore, any court order for the enforcement of the award is no more a judgment or a final decision on the merits than the award itself. The second point of note is that the question of valuation overall, can be looked at afresh at each subsequent interim or final valuation or at some other stage or event as the contract may direct (e.g. on termination). In this case the court found the party who had wrongfully repudiated the contract, retained the right to recover any overpayment made before the contract came to an end. It did not in the event have to resort to the equitable remedy of restitution. 5. Costs—jurisdiction—severance See Enviroflow Management Ltd v Redhill Works (Nottingham) Ltd 19 O’Farrell J held that an adjudicator did not have jurisdiction to award the unpaid party its “debt recovery costs” , claimed under the Late Payment of Commercial Debts (Interest) Act 1998 (“LPA”). As such, she severed those costs from the adjudicator’s decision and enforced the balance. The court considered the provisions of section 5A of the LPA 1998 (which provides that a successful party is entitled to its reasonable costs of recovering a debt) and section 108A of the Act, which, in contrast, provides that the costs of an adjudication can only be awarded where such a provision was made in writing after the notice of adjudication was given. The court held that the provision in section 5A of the LPA was caught by and subject to section 108 A (2) of the Act and was therefore ineffective. 6. Enforcement—threat of insolvency See Bernards Sports Surfaces Ltd v Astrosoccer4u Ltd 20 The claimant contractor Bernards, sought enforcement of an adjudicator’s award in its favour for £175,962.47. Because the defendant employer Astrococcer subsequently threatened to give and purported to file notice of intention to appoint an administrator, Bernards also applied for permission to continue the proceedings to enable them to obtain judgment. Had such a notice of intention been properly filed in court it would have imposed a five day moratorium on proceedings. The judge’s attention was drawn to his previous decision in South Coast Construction Ltd v Iverson Road Ltd 21 . In that case Coulson J had given permission for the proceedings to be continued applying the relevant principles including proprietary interests, questions of conduct, and the stage the proceedings had reached. Adjudication enforcement proceedings were also to be regarded as exceptional, as in the majority of cases, they were bound to succeed.
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