True Fix Construction Ltd v Apollo Property Services Group Ltd

Adjudication decisions should generally be enforced promptly because adjudication is intended to maintain cashflow. A stay of execution may be justified where the successful party would probably be unable to repay the award after a final determination. The court must consider the overall financial position, including whether it was already similar at the relevant contractual date and whether the defendant’s non-payment contributed to the claimant’s difficulties. A possible future adjudication does not justify delaying enforcement of an earlier decision that has not been successfully challenged.

The claimant sought summary judgment to enforce an adjudicator’s award of £125,124.41 plus VAT and interest arising from a subcontract for roofing works. The defendant accepted that the adjudicator’s decision could not be challenged, but applied for a stay of enforcement on the basis that the claimant might be unable to repay the award if a later final account determination required repayment.

The court considered the claimant’s accounts, credit reports, outstanding debts and sums allegedly due from the defendant and another insolvent subcontractor. The central issue was whether the evidence justified a stay under the principles stated in Wimbledon Construction Company v Vago [2005] BLR 374.

1. Summary judgment granted. The adjudicator’s award was enforced in the sum of £125,124.41.
2. The principles governing a stay were those summarised in Wimbledon Construction Company v Vago [2005] BLR 374. Adjudication is intended to provide a quick and inexpensive temporary result, and its decisions should generally be enforced so that the successful party is not kept out of money.
3. A stay may be appropriate where the claimant would probably be unable to repay the judgment sum following a final judgment or arbitration. Insolvent liquidation will normally justify a stay. However, the court must exercise its discretion in the light of the overall circumstances. A claimant’s unchanged financial position, or financial difficulties caused in whole or part by the defendant’s failure to pay, weighs against a stay.
4. The credit reports were of limited assistance because they were based on limited information and required allowance for the position of the construction industry. The accounts showed increased turnover, substantial turnover overall and a profit exceeding £101,000. The evidence did not establish with sufficient probability that the claimant would be unable to repay the award.
5. The claimant’s financial position when it undertook additional work in May 2012 was not substantially better than its current position. The defendant had given that additional work knowing of the claimant’s financial difficulties following the insolvency of another subcontractor. That was a further factor against a stay.
6. The court could not speculate about the result of a forthcoming adjudication. A possible later award in favour of the defendant could not alter the need to enforce an earlier, presently binding adjudication decision. Maintaining cashflow was an important consideration in the construction industry.