M Davenport Builders Ltd v Greer & Anor

M Davenport Builders Ltd v Greer & Anor

Citation: [2019] EWHC 318 (TCC)

Background Facts

Davenport carried out construction works at a residential property in Stockport, under a contract where the Scheme for Construction Contracts (1998) applied (since no express payment or adjudication terms existed).
Davenport issued a final account application for £106,160.84 on 22 June 2018. The Greers failed to serve a valid payment notice or pay less notice within the statutory timeframes.
An adjudication by Mr Sutcliffe awarded Davenport the full sum plus interest. The Greers did not pay.
The Greers later commenced a "true value" adjudication with a second adjudicator (Mr Sliwinski), who valued the works at a lower sum and decided no further payment was due.
The Greers tried to rely on this later decision to resist enforcement of the first adjudicator’s award.

Decision:
- The court granted summary judgment enforcing the first adjudicator’s decision in full.

Key findings:
- The Greers were required to pay the sum awarded by the first adjudicator before they could commence or rely on a "true value" adjudication.
- Section 111 of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) imposes an immediate payment obligation where no valid payment or pay less notice is served.
- The Greers had not paid the first adjudication award and therefore could not rely on the second adjudication as a defence or set-off.

Outcome:
- Davenport awarded £106,160.84 plus interest.
- Costs awarded to Davenport.

"Pay now, argue later" reinforced:
- Parties must comply with adjudicator awards immediately, even if they intend to challenge the valuation later.
- They can only pursue a "true value" adjudication after paying the notified sum.

No right to set-off before payment:
- A paying party cannot use a subsequent valuation adjudication as a set-off or defence to avoid payment of a prior adjudication award.

Policy emphasis on cash flow:
- The court reaffirmed that the primary purpose of the 1996 Act is to maintain cash flow to contractors and subcontractors, supporting prompt interim payments.

Clarification of sequencing:
- The judgment clarified that while a "true value" adjudication is permitted, it does not suspend or replace the requirement to pay sums due under a "smash and grab" adjudication first.

Consistency with Grove and Harding:
- The decision builds on the Court of Appeal’s decisions in S&T (UK) Ltd v Grove Developments Ltd and Harding v Paice, confirming that compliance with immediate payment obligations precedes valuation rights.