Southern Electric v Mead Realisations [2009] EWHC 2947 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit


In this case the Court held that the winning party to an adjudication was entitled to recover costs incurred in chasing the losing party for payment, when the losing party had failed to pay the sums due within the time period ordered by the adjudicator.   No agreement had been reached that did not require the payment of such costs and the Court had a broad discretion to make a costs award in these circumstances.

Technology and Construction Court, Mr Justice Akenhead


Southern Electric Contracting Ltd (“Southern Electric”) provided mechanical and electrical installation work for Mead Realisations Ltd (“Mead”) pursuant to a written construction contract.  Disputes arose in relation to the contract and the disputes were referred to adjudication.  The adjudicator ordered that Mead pay Southern Electric £124k plus VAT and interest within 7 days of his award.  It was clear from elsewhere in the decision that interest would continue to accrue if payment was late.  The money was not paid within time.  After correspondence between the parties, solicitors for Southern Electric informed Mead that it would seek its costs of pursuing the money unless the sums due were paid forthwith.  Southern Electric subsequently issued a claim against Mead for enforcement of the adjudicator’s decision.  This claim also included a claim for costs.  Mead filed a standard form of admission admitting “the full amount claimed as shown on the claim form”.  Southern Electric and Mead subsequently entered into further correspondence in which Mead offered to pay the outstanding sums in instalments.  Southern Electric argued that it was also entitled to the costs of the legal proceedings.  Mead disputed this, asserting that full and final settlement had been reached that did not require it to pay these costs.


The Court was asked to rule on whether a full and final settlement agreement had been reached between the parties which did not require Mead to pay the costs incurred by Southern in relation to the enforcement proceedings.


The Court found:

  • When considering whether or not a contract has been formed, the Court will consider matters primarily in an objective way.  Thus it is not generally of any great assistance to the Court to attach much weight, if any, to the subjective beliefs of the individual parties in any negotiation unless and to the extent those subjective beliefs have been expressed to the other party.  It is necessary to review the factual background in determining whether or not a contract has been formed.
  • The factual background in this case was that this was a claim in the TCC to enforce an adjudication decision, costs were expressly claimed in that action and it must have been clear to Mead that Southern Electric would incur substantial costs in relation to the enforcement proceedings.
  • Although there was nothing in principle to stop the parties to enforcement proceedings agreeing a settlement that included costs, on the facts of this case no such agreement had been reached.  What had been agreed was that Mead would pay Southern Electric’s costs as part of the final instalment although no agreement had been reached as to the amount of those costs.
  • The principles set out in Amber Construction Services ltd v London Interspace HG Ltd [2007] EWHC 3042 (TCC) relating to the recovery of costs incurred in relation to enforcing an adjudicator’s decision were approved.  In Amber Construction the Court indicated that it had a broad discretion to make a costs award against the losing party to enforcement proceedings. 
  • Accordingly, Mead was ordered to pay the costs of Southern Electric’s enforcement claim (and of the application before the Court).  Such costs would be summarily assessed by the Court.  

This summary was provided by CMS Cameron McKenna LLP.

For more information visit


Click here to read full-screen | Click here to print the case