Gray & Sons Builders (Bedford) Ltd. v Essential Box Company Ltd.

Adjudication decisions should ordinarily be enforced unless it is plain that the adjudicator decided a question outside the reference or acted in an obviously unfair manner. A party that resists enforcement without a real defence, and concedes only immediately before the hearing, will ordinarily face indemnity costs. Concurrent arbitration or litigation does not prevent enforcement of an adjudicator’s decision. Cash-flow difficulties and offers proposing delayed or instalment payments do not ordinarily justify withholding enforcement costs where the adjudicated sum has long been due.

The claimant obtained adjudication decisions determining that the defendant had wrongfully repudiated a demolition and rebuilding contract and ordering payment of £101,988.87 plus interest. The defendant failed to pay, and the claimant commenced enforcement proceedings.

The defendant initially indicated that enforcement would be resisted on jurisdictional grounds, but conceded the enforcement application on the day before the hearing. The issues were the appropriate basis for costs, the effect of the defendant’s settlement offer, and the amount of costs reasonably incurred.

1. Enforcement and indemnity costs. Judgment was entered for the claimant for £115,436.04. The defendant had no defence to enforcement. The court applied the approach in Carillion Construction Limited v Devonport Royal Dockyard Limited [2005] EWCA Civ 1358: adjudication decisions should be respected and enforced except in the plainest cases involving excess of jurisdiction or obvious unfairness.
2. The defendant’s suggestion that concurrent arbitration deprived the adjudicator of jurisdiction was rejected. Following Herschel Engineering Ltd v Breen Property Ltd [2000] BLR 272, concurrent litigation or arbitration did not prevent enforcement. Any contrary approach would frustrate the purpose of the Housing Grants Construction and Regeneration Act 1996.
3. The defendant’s conduct in maintaining the appearance of resistance, causing the claimant and the court to prepare for a contested hearing, and conceding only immediately beforehand was unreasonable. Applying Reid Minty v Taylor [2002] 1 WLR 2800 and Wates Construction Ltd v HGP Greentree Allchurch Evans Ltd [2005] EWHC 2174 (TCC), indemnity costs were appropriate. Cash-flow difficulties were irrelevant because the sums had been due for months.
4. The claimant was not deprived of costs because it rejected offers involving delayed or instalment payments. It had obtained judgment for the full amount, payable within 14 days, and its rejection of the defendant’s offer was not unreasonable.
5. The claimant’s costs were assessed at £11,842.85. Judgment was payable by 25 October 2006, with interest continuing at £34.93 per day until payment. The assessed costs were also payable by the defendant.