BDP Construction Limited v Cygnet Behavioural Health Limited
| Court | High Court of Justice, King's Bench Division, Business and Property Courts in Leeds, Technology and Construction Court |
| Judge | Mr Justice Constable |
| Judgment | 16 July 2026 |
| Hearing | 7 July 2026 |
| Jurisdiction | England and Wales |
| Claimant | BDP Construction Limited, the design and build contractor |
| Defendant | Cygnet Behavioural Health Limited, the employer |
| Contract | JCT Design and Build Contract 2016 as amended, never executed |
| Works | A hospital at 140 Wolverhampton Road, Wolverhampton, practical completion 18 July 2024 |
| Adjudication | Adjudicator appointed by the Royal Institution of Chartered Surveyors on 22 January 2026, decision 9 March 2026 |
| Case reference | HT-2026-LDS-000008 |
| Sum enforced | 136,769 pounds, with 4,779 pounds of the adjudicator's fees and interest |
Summary
An employer deducted 141,000 pounds of liquidated damages from its design and build contractor. The contractor said the deduction notice was invalid because the completion date and the daily rate in it were wrong. Each side produced a different set of contract amendments, each said its own set fixed the date and the rate, and each said it had never seen the other's. The contract was never executed.
The adjudicator held that neither party had proved its rate. No liquidated damages could be claimed and the retention balance fell to be paid. The employer resisted enforcement on the ground that the only answers open were its rate or the contractor's. The court enforced the decision.
Background and facts
The works were a hospital at Wolverhampton under a JCT Design and Build Contract 2016 as amended. On 8 July 2025 the employer served a notice of liquidated damages deductions putting the completion date at 29 February 2024, the delay at 141 days and the rate at 1,000 pounds per day. The contractor answered on 4 September 2025 that the date and the rate were both wrong and that the employer had caused delay.
The contractor referred the dispute on 19 January 2026. Its case was that the contract included amendments sent to it in March 2024, giving a completion date of 26 April 2024 and liquidated damages of 14,500 pounds per week, a higher rate than the notice had used. It sought a declaration that the notice was invalid.
The employer relied on a different set of amendments, provided in September 2022, which gave the February date and the daily rate. It said in terms that nothing in its response accepted the contractor's version. Each side denied ever seeing the other's document. The decision came on 9 March 2026. The completion date was 29 February 2024, the extension of time claim failed for want of proved causation, and neither party had proved its rate.
The issue
The employer said the reference had a fence around it. Both sides accepted that the contract carried a liquidated damages mechanism and had put only the date and the rate in issue, so the only answers open were the daily rate or the weekly one. A third answer was an excess of jurisdiction, and if it was not, the adjudicator had to warn the parties before taking it.
The contractor said the reference was set by its notice. Each side carried the burden of the case it chose to run, and one side failing to prove its rate did not prove the other's.
The decision
The court began with the notice and the redress it sought. The contractor had to prove that its own rate, the higher of the two, was the agreed rate.
The failure by BDP to establish its case did not necessitate a finding that Cygnet had discharged the evidential burden upon it.Mr Justice Constable, paragraph 27
A fence around an adjudicator's jurisdiction has to be built, not assumed. It can be built by assertion followed by admission, which is what took the contract terms out of the adjudicator's reach in an earlier case. There was no admission here. Each party reserved its position on the other's documents.
It would require clear words in the documents by which the jurisdiction of the Adjudicator is established to remove from the Adjudicator the potential of finding, in the ordinary way, that a party has not proven its case.Mr Justice Constable, paragraph 28
The adjudicator's own language about the evidence he needed was loose, and neither side defended it as an orthodox statement of the civil standard of proof.
It was not an error in relation to jurisdiction; it was an error in answering the question the Adjudicator had jurisdiction to decide.Mr Justice Constable, paragraph 31
On natural justice the first argument depended on the agreement that did not exist. The second failed because the adjudicator was not adopting a positive answer for which neither side contended, and was not relying on evidence that had not been canvassed.
The failure to have reverted to the parties was not a breach of natural justice.Mr Justice Constable, paragraph 34
The court added, in the alternative and expressly in case it was wrong on natural justice, that any breach would not have been material. The employer never said what further evidence it would have produced. Its fallback, that the amended clause let it state a lesser rate in the notice, failed: with no proved contractual rate there is nothing for a lesser rate to be less than.
The Adjudicator had jurisdiction to resolve the dispute in the manner he did. There was no, or no material, breach of natural justice.Mr Justice Constable, paragraph 40
Practical implications
The employer lost its whole liquidated damages claim and its hold on the retention because it proved nothing beyond its own case. Where the rate and the completion date come from a document whose transmission is contested, the deduction notice stands or falls with that document. Plead the alternative in terms.
Two competing figures do not confine an adjudicator. The boundary is set by the notice of adjudication and the redress it seeks, and it narrows only on clear words or on an assertion the other side admits.
The court did record one limit. An adjudicator minded to reach a positive answer for which neither side contended would ordinarily have to put it to the parties first. Rejecting both cases for want of proof is a different act and needs no warning.
Practice points
- Check the completion date and the rate in a deduction notice against the contract document you can prove was agreed, before the notice goes out.
- Where the contract was never executed, build the trail of transmission: who sent which version, on what date, through what system, and what the other side did with it.
- Plead in the alternative. If your rate is not accepted, state the rate that applies if you are wrong and the basis for it.
- Do not assume that a dispute about two figures obliges the adjudicator to pick one of them. It does not, unless the documents that set the reference say so.
- A restriction on jurisdiction by assertion and admission needs a real admission. A response that reserves your position on the other side's version preserves your case and removes the fence.
- An adjudicator's loose statement of the standard of proof is an error within jurisdiction, and errors within jurisdiction are enforced.
- If you say you were denied the chance to make a submission, file evidence of what you would have submitted and what it would have achieved. Materiality fails without it.