Update: Grove Developments -v- S&T (UK) - 'smash and grab' adjudications
Details
The judgment of Coulson J has given rise to a tsunami of legal comment and speculation. Clarification may be on the way as S&T (UK) has obtained permission to appeal.
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Legal director, Tricia Morrison writes more on this topic in our original article. The background is highlighted below.
Background
Grove Developments Limited -v- S&T (UK) Limited (27 February 2018)
We are all by now very familiar with the phenomenon of ‘smash and grab’ adjudications which started back in 2014 following the decisions in the court ISG -v- Seevic and Galliford Try -v- Estura. The key point in both those cases, in summary, was that where a paying a party (normally the employer) failed to serve a payment or pay less notice as to the sum due to the payee (normally the contractor) the sum in a contractor’s interim payment application as a default payment notice was effectively deemed to be valued by the employer as the sum due. Because of that deemed valuation the employer could not ask an adjudicator to value the interim application. Rather, the employer was stuck with the deemed valuation and to make payment of that sum. The employer had to hope that during the course of the later interim payments that any over payment could be recovered. This has led to a number of court decisions and numerous ‘smash and grab’ adjudications.
The courts’ apparent unease with the ‘smash and grab’ phenomenon was most recently highlighted in the decision of the case of ICI -v- Merit Merrell. In particular in that case, the court suggested that the courts might not now make the same decision as has been reached in ISG and Galliford Try. In its comments the court emphasised that those decisions were only about timing and not about the true value of the works.
In what is likely to be his last substantive decision in the Technology and Construction Court (TCC) in his decision on Grove Developments Limited -v- S&T (UK) Limited (27 February 2018) Coulson J intends to make an impact on the ‘smash and grab’ adjudication. The background to his decision was a line of three adjudication decisions ending up with a ‘smash and grab’ decision giving the contractor a right to be paid in excess of £14 million pounds. In order to try to avoid enforcement and payment of that decision the employer commenced Part 8 proceedings in the TCC. If you are not familiar with the Part 8 proceedings they might be described as an abbreviated procedure relating to issues mainly of law and not of fact.
