M Davenport Builders Limited v Greer & Anor [2019] EWHC 318 (TCC)
By Laura Badcock & Kate Badcock
Late in 2018 the UK Court of Appeal gave its eagerly awaited decision in the case of S&T (UK) Limited v Grove Developments Ltd 1 (Grove), settling the long-raging debate of reconciling default liability and subsequent merit-based adjudications. In Davenport, the UK Technology and Construction Court recently gave the first decision following Grove. Could this be seen in fact to complicate matters? The issue before the Court in Davenport was whether a claimant who had obtained an adjudication determination on the merits could rely on it by way of set-off or counter claim to overcome an earlier adjudication on default liability (commonly termed the “smash and grab” or “slam dunk” adjudication in the UK).
Facts The plaintiff (M Davenport Builders) and defendants (Mr and Mrs Greer) were parties to a construction contract with no express provision for payment details or adjudication. The contract was therefore subject to the adjudication provisions in the UK Housing Grants, Construction and Regeneration Act 1996 (HGCRA). This is the parallel act to the New Zealand Construction Contracts Act 2002 (CCA). Following a dispute, the plaintiff obtained an adjudication determination in its favour for some £106,000 on a default liability basis. The defendants did not pay the amount determined and commenced a second adjudication. The second adjudicator found that the defendants owed nothing to the claimants on a merits basis. The plaintiff then filed an application for summary judgment to enforce the first adjudication determination. Can a defendant who has obtained a determination on the merits rely on it by way of set-off or counter claim to overcome an earlier default basis determination? A comparison with Harding and Grove The UK Court of Appeal first provided guidance on the issue of whether a defendant can undertake further adjudications without paying an amount already ordered in an early adjudication in Harding v Paice in 20152. In Grove the Court of Appeal seemed to have resolved this issue by categorically stating that a defendant must make payment before commencing a further merits-based adjudication. Whilst this part of the judgment was obiter (as the Court’s earlier findings negated the need to decide the point) it is clear the Court intended its comments to be “authoritative guidance” on the issue.