High Court Upholds Adjudicator’s Decision in DNCF Ltd v Genus Homes Ltd: No Duty to Seek Further Particulars in Adjudication

Introduction

The High Court's decision in DNCF Ltd v Genus Homes Ltd [2023] IEHC 490 provides crucial guidance on the limits of fair procedures in statutory adjudication under the Construction Contracts Act 2013. The ruling clarifies that adjudicators are not obliged to invite parties to elaborate on their submissions or to seek further particulars, reinforcing the swift and adversarial nature of adjudication in Irish construction law1.

Basis of the Dispute

DNCF Ltd ("the contractor") applied to enforce two adjudicators' decisions awarding payments from Genus Homes Ltd ("the employer") under a construction contract. Genus Homes resisted enforcement, arguing that the adjudicator had breached fair procedures by dismissing a set-off defence based on a payment certificate without canvassing the parties' views or requesting further details about the figures in that certificate.

The employer's defence centred on a February 2023 payment certificate from the project architect, which, they claimed, showed the contractor had already been overpaid. The adjudicator, however, found that no detailed breakdown of the certificate had been provided and refused to consider it as a valid set-off against the sums claimed by the contractor.

What Was Said: Arguments and Court Reasoning

Employer's Arguments:

• The adjudicator should have alerted the employer to the need for a breakdown of the payment certificate and given an opportunity to provide further details.

• The adjudicator's references to discrepancies in the certificate and comments on the role of quantity surveyors and subcontractors introduced new issues not raised by the parties.

• The adjudicator's statement that he "will not consider this certificate as providing a possible offset" was ambiguous and could be interpreted as a refusal to consider the set-off defence at all, rather than a rejection on the merits.

Contractor's Response:

• The contractor had already raised concerns about the unexplained discrepancy in the payment certificate during the adjudication process.

• The employer had the opportunity to provide explanations or further evidence, but chose not to do so.

• The adjudicator's decision was based on the materials and submissions provided by both parties, rather than on any new or unanticipated issues.

Court's Analysis:

• The High Court reaffirmed that the statutory adjudication process is designed to be expeditious and adversarial, not iterative. Adjudicators are not required to seek further particulars or invite parties to expand on their cases.

• The onus is on each party to present its case and evidence as it sees fit. The adjudicator's role is not to assist parties in making their case.

• There was no breach of fair procedures because the employer's set-off defence was considered on its merits and rejected due to a lack of substantiation, rather than being dismissed out of hand or on jurisdictional grounds.

• The court distinguished this case from English precedents where adjudicators had truly "gone off on a frolic of their own" by introducing entirely new issues or refusing to consider a defence on jurisdictional grounds without notice to the parties1.

Key Elements and Takeaways

• No Iterative Process: Adjudication differs from litigation or arbitration, where the decision-maker must seek clarification or additional evidence to inform their decision. The process is designed to be swift, based on submissions made within a tight timetable.

• Onus on Parties: Each party must put forward its own evidence and arguments. If a defence is raised in a perfunctory or incomplete manner, the risk that it will be rejected lies with the party raising it.

• Fair Procedures Threshold: The High Court will only refuse to enforce an adjudicator's decision where there is a blatant or obvious breach of fair procedures. Minor procedural complaints or dissatisfaction with the adjudicator's reasoning are insufficient.

• Merits vs. Procedure: Disputes about the correctness of an adjudicator's decision should be resolved in subsequent arbitration or litigation. The enforcement stage is not an opportunity to reargue the merits, except in cases of clear procedural injustice.

• "Pay Now, Argue Later": The principle remains central—employers must pay sums awarded by adjudicators promptly, with the right to challenge the underlying merits in later proceedings.

Conclusion

The High Court granted DNCF Ltd leave to enforce the adjudicator's awards, rejecting Genus Homes' arguments of procedural unfairness. The judgment underscores that adjudicators are not required to help parties make their case or to seek further particulars. Parties must be diligent in presenting their evidence and arguments at the adjudication stage. The decision reinforces the integrity and efficiency of the statutory adjudication process in Ireland's construction industry.