Harlow & Milner Ltd v Teasdale

An adjudicator’s decision should ordinarily be enforced by prompt enforcement proceedings in the Technology and Construction Court. A party cannot generally resist summary judgment by raising a disputed counterclaim or set-off relating to defective work. A complaint that adjudication was conducted too quickly does not establish unfairness where the party had a fair opportunity to present and answer the issues. A possible inability to repay the judgment sum may support a stay, but is not a defence to enforcement. Indemnity costs may be ordered where a party unreasonably forces enforcement proceedings despite having no viable defence.

The claimant obtained an adjudicator’s decision awarding £90,194.53 under a building contract. The defendant did not appear at the enforcement hearing and was not represented, although her solicitors indicated that they had no instructions to defend the application.

The defendant had raised alleged defective work, unfairness in the adjudication, and a risk that the claimant could not repay sums later found due. The claimant also sought the costs of earlier bankruptcy proceedings, including a statutory demand which had been set aside by consent. The court had to determine enforcement, interest, costs, and the proper costs order for the bankruptcy proceedings.

1. Enforcement. The claimant was entitled to summary judgment enforcing the adjudicator’s decision. The judgment sum was £90,194.53, with £4,830.32 interest, making £95,024.85 payable by 13 February 2006.
2. Defective work and set-off. The alleged defects could have been raised in the adjudication and could not be deployed as a defence of set-off to enforcement of an existing adjudicator’s decision. The court applied VHE Construction v RBSTB Trust Company [2000] BLR 107.
3. Fairness. The speed of adjudication was not itself unfairness, since speed is a central feature of the process. The relevant question was whether the adjudicator had denied the defendant a fair opportunity to raise or answer the claimant’s points, or had ignored her submissions. No breach of natural justice was shown.
4. Repayment risk and stay. A risk that the claimant might be unable to repay was not a defence to summary judgment. It could, at most, justify a stay. Applying the principles summarised in Wimbledon Construction v Vago [2005] BLR 374, there was no evidence warranting a stay.
5. Costs. The claimant’s enforcement costs were assessed on the indemnity basis because it was unreasonable for the defendant to force proceedings in circumstances where she had no defence. Applying Reid Minty v Taylor [2002] 1 WLR 2800, the costs were summarily assessed at £9,000.
6. Bankruptcy proceedings. Both parties were ordered to bear their own costs of the earlier bankruptcy proceedings. The court emphasised that, save in exceptional circumstances, enforcement proceedings in the TCC are the most efficient means of enforcing an adjudicator’s decision. A statutory demand and bankruptcy proceedings are ordinarily a blunt and inappropriate instrument for that purpose, particularly where they generate issues unrelated to the adjudication.

This was a first-instance decision. The judgment records earlier statutory-demand and bankruptcy proceedings in the Bradford County Court, which were set aside by consent, but no appeal from a judgment on the merits.