TRIDENT MAINTAIN LTD v FALCON INVESTMENT LTD (2016)

The claimant contractor applied for summary judgment to enforce an adjudicator’s decision in its favour and the defendant applied for a stay of execution.

 

The parties had entered into a building contract. Disputes arose concerning in particular the value of an interim payment application. The claimant referred the matter to adjudication and the adjudicator gave a decision in its favour ordering the defendant to make an interim payment of £207,000 including interest. The claimant issued proceedings to enforce the decision. The defendant sought time to pay and alleged that the claimant’s work was defective. At the hearing the defendant accepted that the decision was enforceable but sought a stay of execution. The defendant said that there were real concerns about some of the material placed before the adjudicator and relied on by the claimant to demonstrate that it had made payments to suppliers. It also relied on cross-claims for defects under the underlying contract to show that at the end of the day there was likely to be a balance in its favour; the claimant’s financial position was such that it would not be able to repay the amount of the decision if called upon to do so, since the defendant was its sole or main source of work. In order to demonstrate its ability to repay if necessary, the claimant relied on a letter of intent from a third party to show that it had work in the pipeline. The defendant said that that project was not going ahead and the letter of intent could not be relied on.

 

HELD: 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 might constitute special circumstances rendering it appropriate to grant a stay. However, if the evidence of the claimant’s financial position suggested that it was probable that it would be unable to repay the judgment sum, if necessary, that would not usually justify the grant of a stay if the claimant’s financial position was the same or similar to its financial position at the time that the relevant contract was made, Wimbledon Construction Co 2000 Ltd v Vago [2005] EWHC 1086 (TCC), [2005] B.L.R. 374 applied. The defendant failed to show that it would suffer real hardship if required to make the payment, or that there was a real risk that it would not recover any overpayment, RMC Building & Civil Engineering Ltd v UK Construction Ltd [2016] EWHC 241 (TCC), [2016] B.L.R. 264 considered. The instant case was not exceptional and there was no suggestion that it was impossible for the defendant to make the payment it was being asked to make pursuant to the decision or that it would prevent pursuit of further proceedings, Galliford Try Building Ltd v Estura Ltd [2015] EWHC 412 (TCC), [2015] B.L.R. 321 considered. The later cases had restated, but not widened the ambit of, the test in Wimbledon v Vago, Hillview Industrial Developments (UK) Ltd v Botes Building Ltd [2006] EWHC 1365 (TCC) considered. It would be exceptionally unusual for the court on such an enforcement application to consider the underlying disputes and there was no reason to do so in the instant case. Nor would the court consider the documents relating to the alleged failure to make payments to suppliers, since that issue had been argued before the adjudicator and decided by him, Speymill Contracts Ltd v Baskind [2010] EWCA Civ 120, [2010] B.L.R. 257 applied. The letter of intent had not been before the adjudicator but it was not possible to read it as making any positive representation. The claimant’s financial position was not materially worse than when the contract was made. If the defendant was the claimant’s main employer then that was something of which it had been aware at the time and of which it could not complain.

 

Summary judgment granted, stay refused

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