Failure to correctly service adjudication notice leads to unsuccessful adjudication attempt


The Technology and Construction Court (TCC) has ruled that a contractor was entitled to suspend their construction work in a dispute about non-payment and the invalid service of an adjudication notice.

The contractor, AM Construction, was appointed by the Darul Amaan Trust to construct a three storey mosque. The works were delayed and a dispute arose over the value of the works that had been completed and the non-payment of a little over £200,000 of invoices.

Following non-payment, AM Construction suspended further performance of the works, which resulted in the Darul Amaan Trust starting a ‘true value’ adjudication.  The adjudicator found in favour of the Darul Amaan Trust, concluding that they did not owe the contractor any further sums and accordingly, AM Construction had not been permitted to suspend performance.

AM Construction sought to challenge the adjudication in the courts, claiming that the notice of adjudication had been incorrectly served and as such was invalid. Additionally they pleaded that the Darul Amaan Trust had failed to issue a payless notice and therefore was not entitled to start a ‘true value’ adjudication without settling the interim bill of £206,825.

The adjudication notice was hand delivered to AM Construction by a ‘process server’ acting on behalf of the Trust.  A director of the construction firm alleged the envelope contained a covering letter and supporting documents but did not include the actual notice of adjudication.  Based in part on doorbell video footage of the delivery, the judge found that the adjudication notice was not in the envelope and was not validly delivered to AM Construction.

The TCC also found that the Darul Amaan Trust was not permitted to start a ‘true value’ adjudication given it had failed to pay the interim invoice or alternatively issue a payless notice.  A ‘true value’ adjudication cannot be commenced until outstanding payments have been addressed.

Matthew Golightly, Associate Director – Claims & Technical, Brunel Professions said: “The facts of this case are another very good example of the importance of issuing the correct documentation in a timely manner in order for an adjudication to have a chance of being successful. The use of a professional process server rather than the firm’s own administrative staff did not prevent the defects in service of the notice, and of course even professionals can make administrative errors.”

For further reading on the case see articles published by Charles Russell Speechlys, Eversheds Sutherland and  Taylor Wessing.

Finally we would draw particular attention to the risk management advice provided by Eversheds Sutherland in their article as follows:

  • check your contract notice provisions carefully. If they are unclear or poorly drafted, agree an appropriate method of service and vary the contract accordingly. It may be that service by email becomes a more popular and preferable method, given the pitfalls shown with printing hard copies and proving that the hard copies have been sent or delivered
  • there is a risk that more parties seek to argue that a hard copy notice has not been received by hand or post and so it may be appropriate to obtain clear evidence as to the contents of an envelope that is being sent by post or hand, such as photos or videos is owned by Brunel Professions, which is a leading professional indemnity insurance broker in the UK.  Click here to get a quote or call 0345 450 1074 to speak to a broker.