Aakon Construction Services LTD - v - Pure Fitout Associated Ltd (Form of Order) (Approved)

Factual and Procedural Background

The proceedings concern an application by Company A to enforce an adjudicator’s decision under the Construction Contracts Act 2013 against Company B. The principal judgment granting leave to enforce the adjudicator’s decision was delivered on 13 September 2021. This subsequent judgment addresses the form of order following that principal judgment, specifically: whether the judgment debt should be adjusted due to a second adjudication between the parties, whether interest is payable on the judgment debt, and the allocation of costs. Company B contended that the sum payable should be reduced based on a subsequent adjudicator’s decision, which valued the disputed works at a lower amount than the first adjudicator’s decision. Company A sought enforcement of the original adjudicator’s decision and judgment for the full amount awarded in that decision.

Legal Issues Presented

1. Whether the judgment debt arising from the first adjudicator’s decision should be reduced by reference to the outcome of a second adjudication between the parties.
2. Whether interest is payable on the judgment debt arising from the adjudicator’s decision, and if so, from what date.
3. The appropriate allocation and basis of legal costs in the enforcement proceedings.

Arguments of the Parties

Applicant's Arguments

• The first adjudicator’s decision is binding and enforceable as a judgment of the High Court under section 6(11) of the Construction Contracts Act 2013.
• The second adjudicator’s decision does not supersede the first decision as it was not reached through court or arbitral proceedings, as required by section 6(10) of the Act.
• The respondent failed to provide evidence of the second adjudicator’s decision or to initiate enforcement proceedings in respect of it.
• The applicant is entitled to judgment for the full amount awarded by the first adjudicator and to recover costs on the standard basis, including costs related to service difficulties and proceedings outside the jurisdiction.
• The application for interest under section 22 of the Courts Act 1981 should be refused as the court lacks jurisdiction to award interest in enforcement proceedings under the Construction Contracts Act 2013.

Respondent's Arguments

• The judgment debt should be reduced to the amount determined by the second adjudicator, which valued the works at a lower figure.
• The first adjudicator’s decision is no longer binding as it has been superseded by the second adjudicator’s decision.
• Alternatively, the respondent submitted that payment should be limited to the lower amount or held in escrow pending determination of enforcement proceedings relating to the second adjudication.
• The respondent relied on the Court of Appeal of England and Wales decision in Grove Developments Ltd v. S & T (UK) Ltd to support its position regarding the relationship between sequential adjudications.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by considering the respondent’s contention that the judgment debt should be reduced by reference to a second adjudicator’s decision. It noted the legislative framework under the Construction Contracts Act 2013, particularly section 6(10), which provides that an adjudicator’s decision remains binding until the dispute is finally settled by the parties or by a different decision reached in court or arbitration. The court concluded that a second adjudication alone does not supersede the first adjudicator’s decision. The respondent had not produced the second adjudicator’s decision in evidence nor initiated enforcement proceedings in respect of it. Thus, the court declined to reduce the judgment debt.

The court further analyzed the policy underlying the Act, emphasizing its purpose to ensure expeditious resolution and immediate payment obligations. It rejected the idea of netting off conflicting adjudications in enforcement proceedings, as this would undermine the statutory “pay now, argue later” regime and cause delay.

Regarding interest on the judgment debt, the court examined section 22 of the Courts Act 1981 and relevant Supreme Court authority, recognizing the discretion to award interest on judgments generally. However, it determined that this discretion does not apply to enforcement proceedings under the Construction Contracts Act 2013, given the limited jurisdiction of the court at this stage and the adjudicator’s exclusive role in deciding entitlement to interest. Consequently, interest would only accrue from the date of the court order in accordance with the Debtors (Ireland) Act 1840.

On legal costs, the court reviewed the statutory discretion under the Legal Services Regulation Act 2015 and the principles governing the award of costs on either the “party and party” or “legal practitioner and client” basis. It considered the respondent’s conduct and the nature of the proceedings, finding no sufficient basis to depart from the default party and party costs order. The respondent’s arguments were found to be without merit but not abusive or frivolous, and the conduct regarding service issues did not amount to an abuse of process. The court ordered the respondent to pay the applicant’s costs, including those related to service difficulties and the enforcement proceedings, to be adjudicated if not agreed.

Holding and Implications

The court granted leave to Company A to enforce the adjudicator’s decision dated 25 June 2021, entering judgment against Company B in the sum of €257,165.09 exclusive of VAT. Interest pursuant to section 22 of the Courts Act 1981 was refused, with interest to accrue only from the date the court order is perfected as per the Debtors (Ireland) Act 1840. Company A was awarded costs against Company B on the standard “party and party” basis, including costs related to service and enforcement proceedings.

The decision reinforces the statutory scheme under the Construction Contracts Act 2013, confirming that enforcement of an adjudicator’s decision is immediate and not subject to adjustment by subsequent adjudications absent court or arbitral determination. It affirms the limited role of the courts in enforcement applications and upholds the “pay now, argue later” principle. No broader precedent altering the legislative framework was established; the ruling primarily affects the parties by enforcing the initial adjudicator’s award and clarifying procedural expectations regarding interest and costs.