Mead General Building Ltd v Dartmoor Properties Ltd

Adjudicators’ decisions should be enforced summarily unless there is a jurisdictional defect or material breach of natural justice. A pending arbitration or an allegation that the adjudicator was wrong does not ordinarily prevent enforcement.

A claimant’s company voluntary arrangement is relevant to an application for a stay of execution, but it does not automatically establish inability to repay. The court must assess the arrangement, the claimant’s current trading position, and whether the financial difficulty was caused substantially by the defendant’s failure to pay the adjudicated sum.

Mead sought summary judgment under CPR Part 24 to enforce an adjudicator’s decision requiring Dartmoor to pay £347,712.89 under a construction contract. Dartmoor alleged errors in the adjudication and referred to intended arbitration proceedings, but raised no jurisdictional or natural justice challenge.

Dartmoor also argued that Mead’s company voluntary arrangement meant that judgment should not be entered, or alternatively that execution should be stayed under RSC Order 47. The central issues were whether enforcement should proceed and whether Mead’s financial position justified a stay.

1. Enforcement. Judgment was entered for Mead for the adjudicated sum. The TCC will enforce an adjudicator’s decision whether right or wrong unless the adjudicator lacked jurisdiction or materially breached natural justice. Complaints about the merits belonged, if at all, to subsequent arbitration or litigation and could not prevent summary enforcement.
2. Stay of execution. A company voluntary arrangement was relevant to the discretionary question under RSC Order 47, but its existence did not automatically establish that the claimant could not repay the judgment sum. The court had to consider the circumstances of the arrangement, the claimant’s current trading position, and whether the financial position or arrangement resulted wholly or substantially from the defendant’s failure to pay the adjudicated sums.
3. The authorities indicated that inability to repay might constitute special circumstances. A stay would usually be appropriate where insolvency was established, subject to the qualification that insolvent liquidation might prevent judgment being entered at all. The evidence showed that Mead remained a viable trading concern, that its financial difficulties were principally caused by Dartmoor’s non-payment, and that it could repay any overpayment found in later arbitration. No stay was therefore ordered.
4. Costs. Mead was not entitled to indemnity costs. The CVA argument was arguable in relation to the stay, and Mead had incurred unnecessary costs by filing extensive material concerning the underlying contract and adjudication when no jurisdiction or natural justice issue was raised. The costs were reduced to £15,000.
5. Judgment was entered for Mead in the total sum of £364,177.46, inclusive of interest and costs, payable within 14 days.