Set off of counterclaim at enforcement: Davis Construction (South East) Ltd v Sanzen Investments Ltd [2021] EWHC 2216 (TCC) HHJ Stephen Eyre QC In adjudication enforcement proceedings the court applies the test set out in CPR 24, but having regard to the nature of the application being considered. There are limited grounds on which an application to enforce an adjudicator's decision can be resisted. The cases establish that with few limited exceptions, a party is not entitled to avoid the “pay now, argue later” mantra by seeking to exercise a right of set-off (see Squibb Group v Vertase FLI Ltd[6]). The claimant was engaged by the defendant under a JCT ICD 2016 contract to build 25 apartments. Two clauses were relevant: The first was Clause 1.13 which contained an express right of set off in favour of the defendant. The second was clause 9.2 which incorporated the adjudication provisions of the Scheme with two exceptions (not relevant to the issues in this case). The claimant referred a final account dispute to adjudication in which the adjudicator found the claimant was entitled to payment of £80,996 plus VAT plus his fees, a total of £162,000. It was of note that although an issue over the quality of work had arisen, and a pre-action protocol letter of claim sent on behalf of the defendant, the issue of quality of work was not raised in the adjudication. At the enforcement, the defendant argued the application should be adjourned or stayed to permit it to set-off a counterclaim for defective work.
Comment
It is worth setting out the stark reminder at the conclusion of the judgment.
“The various defences asserted by the appellant in his defence to the principal action and in the submissions before us represent, in our judgment, the very type of contrived or technical defences which the Court of Appeal in Carillion Construction Ltd has cautioned the courts to examine with a degree of scepticism. The sheriff was correct to so examine the defences and to conclude that they had no real prospects of success. We are not persuaded that in granting the respondent’s motion for summary decree the sheriff either erred in law or was plainly wrong.”
[6] [2012] EWHC 1958 (TCC)
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