Roe Brickwork Limited v Wates Construction Limited [2013] EWHC 3417 (TCC)

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An adjudicator had not breached the rules of natural justice or acted outside his jurisdiction when he assessed the value of the claims on a different basis from that argued by the parties, as he had simply calculated the sums owed to the claimant in a ‘slightly different way’.  Even if this was wrong, the alleged breach of natural justice was not material as it had no effect on the quantum of the claim that was adverse to the defendant’s position.

Technology and Construction Court Mr Justice Edwards-Stuart


Wates Construction Ltd (‘Wates’) was the main contractor for the construction of three blocks of flats on an estate in Tower Hamlets, London. Wates appointed Roe Brickwork Ltd (‘Roe Brick’) as the sub-contractor to carry out the brickwork for the flats (the ‘Works’.)

A dispute arose which Roe Brick referred to adjudication. Roe Brick claimed that its Works had been delayed by six months and that it had suffered significant loss and expenditure as a result. The specific heads of claim were as follows:

  • Additional preliminaries and loss of overheads and profit (‘OHP’) of approximately £52,000 and £121,000 respectively.
  • Loss of productivity, broken down by various causes, totalling approximately £465,000.
  • Additional supervision and management of approximately £122,000.

The claim for OHP was for an amount for each week of delay calculated using the ‘Hudson’ formula. This involved a calculation of Roe Brick’s OHP as a percentage of turnover based on a fair historical average. This percentage, which Roe Brick calculated at 22.5%, was then applied to the total sub-contract sum divided by the number of contract weeks to produce a weekly contribution to OHP. The claim for disruption was calculated on the basis of Daywork Rates for the relevant tradesmen set out in the sub-contract.

Wates argued that Roe Brick’s claim should be valued not by using Daywork Rates but by reference to the cost of the additional or wasted hours. If Daywork Rates were to be used there should be no separate claim for OHP because that head of loss was already included in the Daywork Rates. Finally, even if that was wrong, the preconditions for the application of the Hudson formula had not been met in the circumstances of this case.

The Adjudicator did not decide that a particular sum was due to the sub-contractor. Instead, he assessed the value of the claims referred to him at £381,459.75 plus interest at 3.5% from 31 January 2013, commenting that: "the actual net due shall reflect the amounts already paid under each head of award above. It is payable within 10-days of today. The parties will know what is already paid under each head."

In valuing the claims, the Adjudicator based his calculations for loss of productivity on a figure that reflected precisely the Daywork Rates. He rejected the claim for a weekly amount for OHP but he added to the amounts he had calculated for loss of productivity 13% OHP derived from the material put forward by Roe Brick as part of its claim using the ‘Hudson’ formula.

Wates did not pay the sum awarded and on 23 September 2013 Roe Brick started legal proceedings to enforce the Adjudicator’s decision.


The Court was asked to decide whether:

  • The Adjudicator had made his decision without jurisdiction because he assessed the OHP on a basis that had not been argued by the parties.
  • The Adjudicator had committed a material breach of the rules of natural justice as the parties were not given the opportunity to make submissions on the Adjudicator’s approach.
  • The decision lacked certainty and was unenforceable because the Adjudicator made no findings about the sums that had been paid by Wates under each head and therefore there was no way of knowing what amount was due from Wates to Roe Brick as a result of the decision.


The Court held:

  • an adjudicator's decision will be enforced provided the adjudicator answers the question referred to him, even if his answer was wrong or he made a mistake.
  • an adjudicator should not decide a point on a factual or legal basis that has not been argued before him, unless he gives the parties an opportunity to make submissions on it. However, there is no rule that an adjudicator must decide a case only by accepting the submissions of one party or the other.
  • Roe Brick had made a claim for both OHP and loss of productivity based on Daywork Rates.
  • The figure of 13% used by the Adjudicator was derived from material put forward by Roe Brick. The difference in the approach adopted by the Adjudicator was that he applied the 13% to the figure for loss of productivity rather than to the figure arrived at by multiplying the weekly value of the total sub-contract by the number of weeks delay following the Hudson formula. This was only a minor difference.
  • Therefore he had not exceeded his jurisdiction or acted in breach of the rules of natural justice. Further, even if the Adjudicator had breached the rules of natural justice, the breach was not material as it had no effect on the quantum of the claim that was adverse to Wates’ position.
  • As to lack of certainty, this ground had fallen away by the time of the hearing as Wates had then accepted that it had paid £97,992 on account of these claims. Thus, there was no dispute over Roe Brick’s entitlement to the balance of £283,467, and judgment would be given for this sum (plus interest).
  • This left a sum of about £50,000 at issue, representing the difference between the parties over how much had actually been paid on account of Roe Brick’s claims. This issue had not been before the Adjudicator. There would be a stay of the action in respect of this amount in order for that dispute to be referred to adjudication if Roe Brick wished to do so. Either party would be permitted to lift the stay on two weeks’ notice.

This summary was provided by CMS Cameron McKenna LLP.

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