Judgment handed down in Myles Dawson and Karan Dawson v RW Armstrong & Sons Limited

The recent Judgment of HHJ Stephen Davies sitting as Judge of the High Court in the case of Dawson and RW Armstrong & Sons Ltd, raises important issues in the context of adjudication enforcement and applications for stays for arbitration. The Judgment also touches on claims for restitution based on the correction principle in the context of overpayments made in previous interim payment cycles.  Jonathan Lewis KC was instructed by David Weare of Fladgate LLP on behalf of the successful Defendant.

The facts concerned an application for summary judgment by the Claimants (the Employer) to enforce a decision of an Adjudicator who on a true value adjudication had decided a negative amount was due to the Defendant (the Contractor). In other words, the Adjudicator had decided there had been an overpayment by the Employer. However, the Adjudicator had not awarded that amount to be repaid by the Contractor to the Employer. The Claimants sought to enforce the Adjudicator’s decision and, in the alternative, sought an order for repayment of the alleged overpayment in reliance on the correction principle and a previous authority of HHJ Stephen Davies in Bellway Homes Ltd v Surgo Construction Ltd [2024] EWHC 269.

The underlying contract was a JCT Standard Building Contract Without Quantities 2016. It contained the standard JCT arbitration clause which includes an exception of claims to enforce adjudication decisions.

In dismissing the application for Summary Judgment, HHJ Stephen Davies held that on the correct interpretation of the Adjudicator’s decision he had not awarded payment and moreover had declined to award payment of the negative amount certified (and valued). Accordingly, the case was distinguishable from cases such as WRW Construction Ltd v Datblygau Davies Developments Ltd [2020] EWHC 1965 (TCC) in which the Court had awarded Judgment for the amount of overpayment as assessed (but not ordered) by an adjudicator.

The Claimants’ alternative claim for restitution based on the correction principle was held to be subject to the arbitration clause as properly construed. The argument that the claim sought to give effect to an Adjudicator’s decision and therefore should be construed as a claim for enforcement was rejected. Properly analysed, the claim sought to advance a similar claim to that advanced in the adjudication (that had failed). Accordingly, the Defendant’s application to stay that claim for arbitration succeeded. Interestingly, the learned Judge also indicated, obiter, that if he had had to decide that claim he would on the facts have been persuaded to distinguish his previous Judgment in Bellway Homes and not granted summary judgment for the overpayment. This was because there were factors that gave rise to an arguable defence as to whether there had been unjust enrichment, notwithstanding the Adjudicator’s decision that there had been overpayment.

This case emphasises the importance of:

(i)    Ensuring that claims to enforce adjudicator’s decisions do not stray beyond the ambit of the decision.

(ii)   Taking proper cognisance of arbitration clauses in the context of adjudication enforcement.

(iii)  Appreciating that even where an adjudicator has decided that an overpayment has been made, there may be a defence to a claim for repayment of that overpayment.

A copy of the Approved Judgment may be found here.

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Jonathan Lewis KC

Call 1996 King's Counsel 2023

Related practice areas

Construction & Engineering