Herschel Engineering Ltd v Breen Properties Ltd [2000] BLR 272

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

Where a court has ordered summary judgment enforcing an adjudicator’s decision, the defendant will not be able to obtain a stay of execution on the ground that the claimant does not and may not have the money to repay the sum awarded if repayment was subsequently ordered in the final determination of the dispute by a court or arbitrator, unless the claimant is insolvent or of doubtful insolvency, in which case a stay may be ordered. 

His Honour Judge LLoyd QC – Queen’s Bench Division, Technology and Construction Court

Background

The claimant obtained summary judgment enforcing a decision of an adjudicator.  The defendant then applied for a stay of execution of that judgment on the ground that recent searches on the Companies Registry revealed that the claimant had no money to repay the sum awarded if it were subsequently decided that the money was not due and should be repaid.

Decision

HHJ LLoyd QC concluded that the court did have jurisdiction to entertain an application for stay of execution of a summary judgment of an adjudicator’s decision under the Civil Procedure Rules.  The material (the Companies Registry search results) relied upon by the defendant was new material that had not been available at the time that the original judgment awarding summary judgment was handed down. 

HHJ LLoyd QC noted that, where the court upheld the existence of a debt pursuant to an adjudicator’s decision, it was a judgment debt like any other.  The only difference was that the judgment upholding the adjudicator’s decision was not a judgment that the dispute was correctly resolved, but only that there were no grounds in fact or law under the HGCRA for concluding that the defendant has realistic prospects of success in challenging the validity of the decision itself.

In order for the court to order a stay of execution, it would be necessary for it to reach the conclusion that the enforcement of that decision would result in such injustice to the defendant that it would not be a just way of dealing with the case consistent with the overriding objective (for example, if the claimant was insolvent or of doubtful solvency).

In this case, the judge was dealing with a routine adjudicator’s decision on a small company where a small company is entitled to be paid some £17,000, where it ought to have been paid that money some time since.  The defendant did not succeed in making out a sufficient case for a stay of execution, therefore its application was dismissed.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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