This case represents one of the rare adjudication enforcement decisions issued by the High Court in Northern Ireland. Adjudication is a construction specific form of dispute resolution, that is quicker and more cost effective than formal litigation or arbitration forms of dispute resolution.

In this case, Piperhill went to court to enforce an adjudication decision handed down in its favour against NIHE. NIHE tried to resist the enforcement of the adjudicator’s decision by arguing that the adjudicator did not have jurisdiction to consider the content of payless notices, given his jurisdiction was limited to the service of the payless notices.

This is a significant Court decision, as it is one of only a handful adjudication decisions which have been enforced in Northern Ireland. It highlights that the courts of Northern Ireland are in step with those in England and Wales in upholding and strengthening the impact of adjudication.

Background

The plaintiff (Piperhill) and the defendant (NIHE) entered into anNEC4 Term Service Contract (the “Contract”) in 2022 for the refurbishment of social housing. The Contract provided for monthly payments to Piperhill, and in February 2025 Piperhill issued an application for payment of £718,699.11 plus VAT for its work. NIHE responded on 6 March 2025 by issuing purported payment certificates and pay less notices. The Contract provided conditions regarding the manner and content of these notices, namely:

• Clauses Y2.2 and 50.6 – (among other things) a pay less notice must specify why the employer is proposing to pay less and how the alternative sum has been calculated; and
• Clauses 13.7 and 13.11 provided, among other things, the methods of service of the notices and that the notices must be communicated separate to other communications.

In an email dated 14 March 2025, Piperhill disputed that the two purported pay less notices complied with the above two conditions of the Contract in relation to the content of the purported pay less notices and their service.

Adjudication

Piperhill thereafter commenced an adjudication seeking payment of the full £718,699.11 plus interest. Piperhill stated in its notice of adjudication that the dispute concerned the NIHE’s failure to pay a notified sum and that the payment certificates and pay less notices were not served in accordance with the Contract. In the referral notice, the Piperhill further stated that the payment certificates and pay less notices were not valid and effective as they were not served in accordance with clauses 13.7 and 13.11.

In their reply, NIHE denied that there were any defects in the notices and asserted that Piperhill was now estopped from relying on the strict terms of clauses 13.7 and 13.11. It was in response to this that Piperhill first expressly argued that the notices did not comply with clauses Y2.2 and 50.6.

In the adjudication all issues were decided on, despite NIHE’s argument regarding jurisdiction. It was decided that the aforementioned clauses had not been complied with, however it was only the breach of clauses 50.6 and Y2.2 which rendered the payment certificates and pay less notices invalid.

Considerations of the High Court

When the NIHE did not pay under the adjudicator’s decision, Piperhill referred the matter to the High Court in order to enforce the decision. The crux of the matter before the High Court was the question of whether the adjudicator had jurisdiction to decide if the pay less notices were validly served.

In deciding if this had been referred to the adjudicator (and was therefore within his jurisdiction), the following commentary of Judge Thornton QC in Fastrack Contractors Ltd v Morrison Construction [2000] BLR 168 was considered:

“…A vital and necessary question to be answered, when a jurisdictional challenge is mounted, is what was actually referred? That involves a careful characterisation of the dispute referred to be made. This exercise will not necessarily be determined solely by the wording of the notice of adjudication since this document, like any commercial document having contractual force, must be construed against the underlying factual background from which it springs and which will be known to both parties.”

In line with the commentary of Judge Thornton QC, Humphreys J recognised that it is common case for the adjudicator’s jurisdiction to derive from the notice of adjudication, but noted that:

“…it is to be construed in accordance with established principles. The court must ascertain what a reasonable person, with all the background knowledge available to the parties at the time, would have understood the words in the document to mean.”

Humphreys J decided that both parties were aware of the underlying factual background of the adjudication and that Piperhill had clearly disputed the contents and service of the pay less notice in their email dated 14 March 2025.

Furthermore, Akenhead J in Cantillon v Urvasco [2008] EWHC 282 (TCC) was considered:

“The ambit of the reference to arbitration or adjudication may unavoidably be widened by the nature of the defence or defences put forward by the defending party in adjudication or arbitration.”

Decision

Humphreys J decided that the adjudicator did have jurisdiction to decide on the matter. NIHE’s failure to pay the notified sum, which was the key dispute in the notice of adjudication, is an obligation set out in Construction Contracts (Northern Ireland) Order 1997 (as amended) (the “1997 Order”). The only way in which NIHE would not be obliged to pay the notified sum would be if they served a valid pay less notice.

Therefore, the question of whether the pay less notice was valid (as set out in the contract and the 1997 Order) was essential for the adjudicator to decide upon. This is because, if the notice was invalid then NIHE had failed to pay the notified sum, which would decide the key dispute detailed in the notice of adjudication.

Furthermore, Humphreys J decided that even in the absence of the above, the adjudicator had the jurisdiction to hear the dispute. This is on the basis that NIHE expressly stated that there were no defects in the notices, which widened the scope and brought the determination of this question within the jurisdiction of the adjudicator.

Key takeaways

In order for a payless notice to be valid it must clearly state the basis upon which the sum certified has been calculated.

Adjudicators do have jurisdiction to consider matters relating to both service and content of pay less notices when they form part of the dispute referred.

The judgment once again reinforces the importance of strictly complying  with contractual and statutory payment regimes