Westgreen Construction Limited v Mrs Irina Kiryukhina
| Judge | Mrs Justice O'Farrell DBE |
| Hearing | 11 August 2026 |
| Judgment | Handed down remotely at 10.30am on 18 August 2026 |
| Court | Technology and Construction Court (KBD), Business and Property Courts of England and Wales |
| Jurisdiction | England & Wales |
| Claimant | Westgreen Construction Limited |
| Defendant | Mrs Irina Kiryukhina |
| Case reference | HT-2026-000164 |
Summary
Westgreen Construction was engaged to build and refurbish a residential property in St John's Wood on a JCT Standard Building Contract without Quantities, 2016 edition, with bespoke amendments. The contract sum was £9,989,324.55, and two advance payments totalling £650,000 were certified and paid early.
Clause 4.7 and the Contract Particulars fixed when that money came back. None of those conditions had occurred when the contract administrator left both advance payments out of the gross valuation in Interim Certificate 25. The contractor adjudicated and won, the employer resisted enforcement on jurisdiction and natural justice and asked for a stay, and Mrs Justice O'Farrell rejected every ground and ordered indemnity costs.
Background and facts
The advance payments were £350,000 certified on 6 March 2024 on appointment and £300,000 on 19 August 2024 at 25 per cent of the contract duration. Both were included in the gross valuation and the totals certified, and both were paid.
The Contract Particulars set out when the money came back: the final account agreed and paid in full less retention; the Making Good Defects Certificate and Final Certificate issued together with payment under the latter; or termination by either party, valued under clause 8.12.
On 1 May 2025 the contract administrator asked the contractor to amend clause 4.7 so the employer could draw them down against late interim certificates. The contractor refused the same day, saying the drafting protected its surety until it was paid in full. From Interim Certificate 23 the second advance payment was left out anyway. In Interim Certificate 25, dated 25 March 2026, both were left out while held constant in the amounts previously certified. Practical completion was certified two days later.
The issue
The adjudicator decided on 7 May 2026 that the payment due under Interim Certificate 25 should have been £756,062.40 rather than £106,062.40, and that the sum in the employer's pay less notice should have been £733,062.40 rather than £83,062.40, payable within seven days without abatement or set-off.
The employer said the adjudicator had gone outside the dispute referred, by deciding how the parties had treated the advance payments in earlier certificates, and had breached natural justice twice: by finding a breach of clause 4.7 nobody had asked him to find, and by allowing a new case in the reply. She also sought a stay under CPR 83.7(1).
The decision
On jurisdiction the judge held the essential claim was for the £650,000 the contractor said belonged in the gross valuation. Once the employer answered that clause 4.14 did not list the advance payments among its components, the course of dealing came in with it.
The Adjudicator was required to resolve that dispute but could consider any additional argument, evidence or other material deployed by the parties in their submissions to resolve such dispute.Mrs Justice O'Farrell, paragraph 39
The reliance on the earlier certificates was not a new case either. It was made first in the referral, and the judge held the employer had an adequate opportunity to answer the reply.
On the finding of breach the judge went part of the way with the employer, accepting there was force in the complaint that the adjudicator went further than he needed to, since neither party had invited a finding of breach of clause 4.7. It changed nothing: he had put the point to both parties, and the judge gave two more reasons.
Secondly, although the Adjudicator made a finding of breach at paragraph 85, he was careful to note that no claim was made for damages for any breach. Thirdly, it did not form part of the formal decision reached or the basis of any relief awarded.Mrs Justice O'Farrell, paragraph 58
The stay failed on the clause wording. The employer argued that her common law termination of 24 June 2026 gave an immediate right to repayment in a termination account.
I reject that argument. It ignores the express terms of clause 4.7 of the Contract Particulars, which makes provision for the circumstances in which the advance payments will be reimbursed. Those circumstances include contractual termination but not common law termination.Mrs Justice O'Farrell, paragraph 69
Practical completion did not help her either: the conditions require the final account to be agreed and paid, and neither has a fixed timetable. The employer had already paid the £83,062.40 in her pay less notice, so the £650,000 balance was enforced, with VAT of £43,615, the adjudicator's fee of £19,866, interest of £2,493.12 and £155.82 a day running, plus indemnity costs.
Practical implications
Enforcement is not review. The court did not decide whether the advance payments belonged in the gross valuation, only that the adjudicator's answer binds for now. The warning stands either way: taking the money out of the gross valuation while holding it constant in the sums previously certified is repayment by another route.
Refusing to vary a clause is not the end of the argument, it is the start of the evidence. The request to amend clause 4.7 and the refusal, both on 1 May 2025, are set out in the judgment, and the certificates that followed are read against them.
An adjudicator who decides more than he was asked does not lose the decision for that alone. What carried it here was that both parties were invited to address the point, and it formed no part of the relief.
Practice points
- Read what an interim certificate does to the sums previously certified, not only what it puts in the gross valuation. A reduction on one side with no change on the other recovers money without announcing it.
- Where advance payments are conditioned on the final account, diarise the conditions rather than the programme. Practical completion, a suspension or a purported termination move nothing until the named events occur.
- If a contract administrator asks to amend a payment clause, answer in writing and keep the exchange. It is the first document anyone reads if the clause is later worked around.
- When an adjudicator raises an authority of his own motion, ask for time and then use it. Here both parties were invited to respond and the judge found the opportunity adequate, which left the natural justice complaint with nothing to bite on.
- Common law termination and contractual termination are not interchangeable when a clause names one of them. Resisting enforcement on thin grounds also carries a costs risk on the indemnity basis.