Construction Adjudication Cases: Part 7 of 2020

The unusual financial arrangements for the project. The judge said it appeared to be more in the nature of a joint venture than an arms’ length employer – contractor relationship. Directors of the two companies were uncle and nephew with another nephew acting as building manager. In addition the parties did not follow the payment terms of the building contract; their dealings were described as “informal and co-operative”. No contract administrator was appointed. The payment notice relied was the third of three notices and was thought by the recipient to be part of a continuing dialogue to resolve the differences of opinion as to value by agreement. Even if TWD had brought the problem on itself by failing to give a pay less notice, that did not mean the court must refuse a stay. TWD was a special purpose vehicle formed for the purpose of the development and unsurprisingly could not satisfy any part of the judgment without becoming insolvent which would deprive it of the opportunity of seeking redress through its claim The manner in which the award had been sought with the strategic objective of going to adjudication That only after termination had JRT demanded payment at the level then sought and which exceeded the value of the development Looking at the payment notice the court felt that substantial elements were overstated or not due at the date of the notice

Judgment was entered but with a stay of execution pending the outcome of the part 7 proceedings.


The facts of this case were most unusual. The court can and will look at all the surrounding circumstances where there is a question of manifest injustice. It will also consider, the financial effect on the paying party as well as that of the payer. It is clearly possible to invite the court to take a hard look at the facts behind a ‘smash and grab’ adjudication, especially one that looks to have been ‘engineered’. In this case it was also legitimate to look at the nature and strength of the items in the payment notice which may have not been capable of full review in the adjudication.

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