Mailbox (Birmingham) Ltd v Galliford Try Building Ltd [2017] EWHC 1405 (TCC)

Following termination of a building contract between the Clamant employer and Defendant building contractor, the Claimant claimed liquidated damages in an adjudication. The Defendant defended the adjudication on the basis that it was entitled to an extension of time in respect of certain events. The adjudicator found that the Claimant was entitled to liquidated damages, and largely rejected the Defendant’s extension of time claim. The Defendant did not pay and commenced a second adjudication in relation to the lawfulness of the termination. The termination had partly been on the basis that the Defendant did not proceed regularly and diligently with the works, and therefore in deciding whether the termination was valid one potential issue for the second adjudicator was what extensions of time should have been granted. The Claimant sought a declaration that its entitlement to recover liquidated damages had been finally decided subject to any later court proceedings, and so no subsequent adjudicator would have jurisdiction to consider any further extension of time claims by the defendant. The TCC decided (1) that the Claimant was entitled to retain the entirety of the liquidated damage awarded by the first adjudicator unless and until that award was overturned by the court, the second adjudicator could not open this issue up again; (2) the Defendant was not entitled to seek any further extensions of time in the second adjudication; the crystallised dispute between the parties in the first adjudication included all time-related issues and the defendant could not seek to defend itself by reference to only some of the potential relevant events, and choose to run others later; (3) the dispute as to termination was not part of the first adjudication, and although the Defendant was not entitled to a different extension of time in the second adjudication, it could rely on all facts and matters relevant to the question of whether it was proceeding regularly and diligently with the work at the time of termination.