Mead General Building Ltd v Dartmoor Properties Ltd
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE COULSON |
| Judgment Date | 04 February 2009 |
| Neutral Citation | [2009] EWHC 200 (TCC) |
| Docket Number | Case No: HT-09-10 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 04 February 2009 |
[2009] EWHC 200 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House
133-137 Fetter Lane
London EC4A 1HD
Before: Mr. Justice Coulson
Case No: HT-09-10
MS. LYNNE McCAFFERTY (instructed by Contract Construction Consultants) for the Claimant
THE DEFENDANT did not appear and was not represented
MR. JUSTICE COULSON:
The claimant, Mead, seeks summary judgment for about £350,000 pursuant to CPR Part 24 by way of enforcement of an adjudicator's decision. The claim is contested by the defendant, Dartmoor, and there is evidence from them in response to the application for summary judgment. Yesterday, however, their solicitors informed Mead and the court that the defendant would not be attending today's hearing. Despite that non-attendance, a point arises from Dartmoor's evidence which, so it seems to me, I must address in some detail. The point is this: because Mead is subject to a CVA, should a stay be granted on any judgment otherwise awarded to them?
In November 2006 Dartmoor engaged Mead to carry out a development scheme at a site in Okehampton in Devon. The contract incorporated the JCT Intermediate Form of Building Contract, 2005 Edition. In 2008, a significant dispute arose between the parties, in connection with claims made by Mead and rejected by Dartmoor, which was referred to an adjudicator, Mr. Peter Simpson.
By a decision in writing dated 19 th December 2008, the adjudicator decided the dispute substantially in Mead's favour. He ordered Dartmoor to pay Mead £332,026.64, plus interest of £6,345, together with a contribution to his fees of £9,341.25. That made a total due of £347,712.89. Dartmoor has failed to pay any part of that sum and, accordingly, Mead now seek summary judgment in that amount.
In his statement of 23 rd January 2009, Mr. Birchmore, the relevant director of Dartmoor, alleges that the adjudicator was wrong in a number of respects and that, in particular, he erred in deciding that Mead were entitled to an extension of time of 27 weeks, with 23 of those weeks carrying loss and expense. He refers in his statement to the arbitration claim that Dartmoor intend to pursue against Mead, although no such claim has yet been commenced.
It is trite law that the TCC will enforce the decision of an adjudicator whether it is right or wrong, unless he did not have the jurisdiction to reach his decision or where there has been a material breach of the rules of natural justice (see Macob Civil Engineering Ltd. v. Morrison Construction Ltd. [1999] BLR 93; Bouygues UK Ltd. v. Dahl-Jensen UK Ltd. [2000] BLR 522; and Carillion Construction Ltd. v. Devonport Royal Dockyard [2005] BLR 310.
In the papers before me, the defendant Dartmoor has taken no jurisdiction points and has not alleged that the adjudicator was in breach of any of the rules of natural justice in conducting the adjudication. There would therefore appear to be no basis on which the defendant could seek permission to defend the claim based on the adjudicator's decision.
Mr. Birchmore's complaints about the adjudicator's alleged errors are, of course, nothing to the point. The paying party will often complain that the adjudicator has awarded too much or that he should not have awarded anything at all. That may be relevant, of course, in subsequent arbitration proceedings, or subsequent litigation, but it cannot prevent summary enforcement; otherwise, the whole rationale for adjudication is lost. Furthermore, adjudication enforcement proceedings will not usually be stayed pending the outcome of subsequent arbitration or litigation, even if that arbitration or litigation has in fact been commenced: see Herschel Engineering Ltd v. Breen Property Ltd [2000] BLR 272. Although the diligent pursuit of a substantive remedy is a factor to which the court will have regard, it is only one of a number of such matters: see AWG Construction Ltd. v. Rockingham Motor Speedway [2004] EWHC 888. Enforcement proceedings will certainly not be stayed merely because the paying party intends, at some point in the future, to commence arbitration or litigation.
Accordingly, as I have indicated, there would appear to be no defence to this claim. But there is one final point raised in Mr. Birchmore's statement which does require further consideration. Mr. Birchmore notes that Mead are subject to a CVA and that this is the best evidence of the claimant's insolvency or, at the very least, their likely inability to pay back any of the sums awarded to them by way of judgment if, following the subsequent arbitration, the arbitrator decides that Mead have been overpaid. For that reason Mr. Birchmore contends that Mead are not entitled to judgment.
It seems to me that, even if Mr. Birchmore is right and the CVA is relevant in the way that he suggests, it could not prevent judgment being entered in Mead's favour. On the other hand, the CVA is, I think, relevant to whether or not, pursuant to RSC Order 47.1, there should be a stay of execution in respect of that judgment. Mr. Birchmore's statement does refer to the possibility of a stay and it seems to me that I should address this issue, despite the absence of what might be described as a formal application for such a stay. Quite properly Ms. McCafferty, who appeared on behalf of Mead, did not object to that course.
I attempted to summarise the earlier authorities dealing with the interaction between adjudication enforcement and a stay of execution pursuant to RSC Order 47 at paragraph 26 of the judgment in Wimbledon Construction Co. 2000 Ltd. v. Derek Vago [2005] BLR 374. The summary was as follows:
“(a) Adjudication (whether pursuant to the 1996 Act or the consequential amendments to the standard forms of building and engineering contracts) is designed to be a quick and inexpensive method of arriving at a temporary result in a construction dispute.
(b) In consequence, adjudicators' decisions are intended to be enforced summarily and the claimant (being the successful party in the adjudication) should not generally be kept out of its money.
(c) In an application to stay the execution of summary judgment arising out of an Adjudicator's decision, the Court must exercise its discretion under Order 47 with considerations (a) and (b) firmly in mind (see AWG Construction Services).
(d) The probable inability of the claimant to repay the judgment sum (awarded by the Adjudicator and enforced by way of summary judgment) at the end of the substantive trial, or arbitration hearing, may constitute special circumstances within the meaning of Order 47 rule 1(1)(a) rendering it appropriate to grant a stay (see Herschel v. Breen).
(e) If the claimant is in insolvent liquidation, or there is no dispute on the evidence that the claimant is insolvent, then a stay of execution will usually be granted (see BouyguesUK and Rainford House Ltd. v. Cadogan Ltd. [2001] BLR 416.
(f) Even if the evidence of the claimant's present financial position suggested that it is probable that it would be unable to repay the judgment sum when it fell due, that would not usually justify the grant of a stay if:
(i) the claimant's financial position is the same or similar to its financial position at the time that the relevant contract was made (see Herschel); or
(ii) The claimant's financial position is due, either wholly, or in significant part, to the defendant's failure to pay those sums which were awarded by the adjudicator (see Absolute Rentals v. Glencor Enterprises CILL...
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