The contractor carried out works to a residential home. The contract was, therefore, not a "construction contract" as defined in the Housing Grants, Construction and Regeneration Act 1996. However, the contract was the JCT Minor Works, 1998 edition including MW11. The amendment incorporated adjudication provisions and so the parties were contractually obliged to adjudicate if one of the parties commenced adjudication in accordance with the contract. On 10 September 1999 the architect certified the sum of £13,558 due to the contractor. On 14 September 1999 the employer served a withholding notice under the contract seeking to withhold amounts for defective work, non-performance and liquidated damages. The contractor disputed the amount withheld, and referred the dispute to adjudication. The adjudicator reduced the sum due to the contractor, but nonetheless decided that the employer should pay an amount together with costs to the contractor. The employer did not pay.
The employer argued that it was entitled to withhold sums due by way of liquidated damages against the adjudicator's decision.