Westshield Civil Engineering Ltd v Buckingham Group Contracting Ltd [2013] EWHC 1825

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

Judgement date: 28 June 2013


(1) Where an adjudication clause provides that an adjudicator’s decision will be final and binding unless proceedings are issued within a specified period of the decision, it will be sufficient to prevent the decision from becoming final and binding when proceedings are issued by the Court – they do not have to be served as well. (2) Where the parties to a dispute have given an adjudicator permission to determine who are the proper parties to the contract giving rise to the dispute, his decision on that issue will be binding in the same way as any other adjudication decision.  (3) Where the financial position of a party seeking to enforce an adjudicator’s decision is the same as it was when it entered into the contract, it will not normally be appropriate to grant a stay of execution of any judgment obtained by it enforcing the adjudicator’s decision.

Technology and Construction Court, Mr Justice Akenhead


Buckingham Group Contracting Limited (“Buckingham”) was the main contractor in the construction of a new studio at Trafford Wharf Road, Salford in 2011.  On 21 October 2011 Westshield Limited (“WL”) provided Buckingham with a quote for the supply and installation of drainage works for the project. A “Pre-order meeting” took place on 7 November 2011 and was attended by representatives of Buckingham and WL, the minutes of which described WL as the “Sub-Contractor” referring to their quotation.

The unsigned form of sub-contract headed “Conditions of Sub-Contract” dated 20 October 2011 identified Buckingham as the main contractor and Westshield Civil Engineering Limited (“Civil Engineering”), a dormant company, as the sub-contractor. Civil Engineering was owned by one or more of the same shareholders as WL but was not a subsidiary.

Clause 14(6) of the Conditions of Sub-Contract said the following:

“The decision of the Adjudicator shall be binding on the parties and they shall comply with it until the dispute is finally determined either by agreement, by legal proceedings or by arbitration.  Should either party be dissatisfied with the decision of the adjudicator that party may within 28 days of the Adjudicator’s decision refer the dispute to either legal proceedings or arbitration in accordance with clause 15 of this Sub-Contract.  If no such proceedings are commenced within the said 28 days then the Adjudicator’s Decision shall be final and binding on the parties.”

Following completion of the works in July 2012, a dispute arose regarding the final account.

Buckingham commenced an adjudication against Civil Engineering on 5 December 2012 seeking a declaration that the sum due to them was £363,766.81 plus VAT.  The Referral Notice which followed claimed that the re-assessed gross value was in fact £295,284.17 and claimed a repayment of the balance. Civil Engineering submitted a detailed response, which included a threshold point that there had been an error by Buckingham in using the name of Civil Engineering in the Sub-Contract, given that Civil Engineering was dormant and most of the exchanges prior to the signing of the Sub-Contract were with WL. On that basis Civil Engineering invited Buckingham to withdraw the adjudication. The response went on to assert that the true overall value of the Sub-Contract Works was £641,048.17. 

The parties agreed that the Adjudicator should have jurisdiction to determine the issue as to who the proper sub-contractor was.

The Adjudicator gave his decision on 16 January 2013, which stated, inter alia, that:

The Sub-Contract was with Civil Engineering.

The sum due to Civil Engineering was £505,474.66 plus VAT.

He had no jurisdiction to direct that Buckingham make payment to Civil Engineering.

Following the decision, Civil Engineering sought to recover the sum due from Buckingham. When no payment was forthcoming, on 27 March 2013 Civil Engineering issued a second Notice of Adjudication.  In response, Buckingham sought to persuade the second adjudicator that the decision was not enforceable because Civil Engineering was not the correct party to the Sub-Contract (precisely the opposite of what it had argued in the first adjudication).  The second adjudicator declined jurisdiction.

On 13 February 2013, Buckingham had issued (but did not serve) proceedings against Civil Engineering and WL in the TCC in Manchester in which it sought recovery of over payments made by Buckingham to WL and/or Civil Engineering.  Both WL and Civil Engineering were unaware that proceedings had been issued. Under the Civil Procedure Rules (CPR), service does not have to be effected for four months following issuing of proceedings and at the date of the hearing, the Claim had not been served on either WL or Civil Engineering.

Meanwhile, Civil Engineering and WL issued proceedings seeking to enforce the Adjudicator’s decision.  They also sought declarations that Buckingham were bound by the Adjudicator’s decision, that WL, Civil Engineering and Buckingham were bound by the Adjudicator’s decision as to the proper identity of the Sub-Contractor, and that Civil Engineering was entitled to be paid the balance of £147,164.66 plus VAT (the difference between the gross sum found to be due and the sum previously paid).


Given Clause 14(6) of the Subcontract, had “proceedings” been “commenced” by Buckingham such as to prevent the Adjudicator’s decision becoming final and binding?

Was Buckingham guilty of approbation/reprobation after changing their stance on who they sub-contracted with?

If the decision was considered to be binding until final resolution of the dispute, should there be a stay of execution due to Civil Engineering being dormant?


The Court held that:

  • there was no doubt proceedings had been “commenced” under Part 7 of the CPR and therefore the Adjudicator’s decision had not become final and binding.  There was no interpretation of Clause 14(6) which allowed for the word “commenced” to mean “served” and despite there only being “brief details of claim” on the Claim form issued by Buckingham, they were sufficient to refer the underlying dispute to the Court.
  • it was not for Buckingham to challenge the Adjudicator’s findings as to the correct identity of the Sub-Contractor, as the parties gave permission and jurisdiction to him to decide the issue.  The question of approbation and reprobation was therefore essentially an immaterial issue.
  • although the Adjudicator’s decision did not as such order payment of the net outstanding sum to Civil Engineering, it had become due because Clause 14(6) required the parties to comply with the decision until the dispute was finally determined.

Civil Engineering had no assets to speak of and was a dormant company and WL had been subject to a Creditors Voluntary Arrangement (“CVA”) for 2½ years. However, relying on the principle in Wimbledon Construction Co 2000 Ltd v Derek Vago [2005] BLR 374, it was not appropriate for there to be a stay of execution.  A stay will not be granted if “the claimant’s financial position is the same or similar to its financial position at the time the relevant contract was made.”  Whether or not the Sub-Contract was with WL or Civil Engineering, Buckingham must be taken to have known that they were dealing with companies which at least had some financial question marks hanging over them at the time at which it entered into the Sub-Contract. WL was emerging from its CVA having paid its monthly payments on time, which effectively made them in a better financial position than before the Sub-Contract was entered into.

Judgment would be given in favour of Civil Engineering in the sum of £147,164.66 enforcing the Adjudicator’s decision. There would be no declaration that Buckingham, WL or Civil Engineering was bound finally by the decision of the Adjudicator and there would be no stay of execution.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes


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