Triuva Kapitalverwaltungsgesellschaft v Galliford Try Construction Ltd

On an application for an interim payment, the court must be satisfied on the balance of probabilities that, on the evidence presently available, the claimant would obtain judgment for a substantial sum if the claim went to trial. It is unnecessary and inappropriate to conduct a mini-trial. A payment may be ordered where the claimant establishes an irreducible minimum of recoverable damages, even though other issues of liability or quantum remain for trial. The payment must be a reasonable proportion of the likely final judgment. Once the statutory conditions are met, the court should ordinarily order payment unless there is a sufficient specific reason not to do so.

Triuva claimed damages from Galliford Try Construction Ltd under a collateral warranty concerning defects in the glazing, curtain walling and cladding of a Birmingham office building. Galliford Try sought an indemnity or contribution from Alumet Systems (UK) Ltd, its subcontractor.

Triuva applied under Part 25 of the Civil Procedure Rules for an interim payment of £1,250,819.37. Galliford Try disputed liability, the adequacy of the defect case and the reasonableness of the remedial costs. The central issues were whether Triuva would obtain judgment for a substantial amount, whether an interim payment should be ordered, its appropriate amount, and whether a corresponding order should be made against Alumet.

1. Threshold for payment. Under Civil Procedure Rules 1998, CPR 25.7(1)(c), the court had to be satisfied on the balance of probabilities that Triuva would obtain judgment for a substantial amount if the claim proceeded to trial on the evidence then available. A showing that success was merely likely was insufficient. Whether the amount was substantial had to be assessed in the context of the total claim.
2. Scope of the application. The court should not conduct a mini-trial, particularly where factual and legal issues were complex. Nevertheless, an application could be determined if the claimant established an irreducible minimum part of the claim. The evidence established, with no real defence, defects involving water ingress, fire stopping, defective fixings and missing anti-rotation pins, and inadequate thermal insulation. The allegation concerning the fire rating of the Alucobond panels remained triable and was excluded.
3. Quantum. The starting point for defective work was the reasonable cost of reasonable reinstatement. The claimant was entitled to recover only reasonable remedial costs, but the defendant had to identify any failure to mitigate. A line-by-line assessment was inappropriate at the interim stage. The court assessed the evidence and concluded that Triuva would obtain substantial damages on the established defects. The likely judgment was £430,000, of which £300,000 was a reasonable proportion.
4. Discretion and third party payment. Once CPR 25.7(1)(c) was satisfied, an interim payment should be ordered unless there was a sufficient specific reason not to do so. The technical complexity of the case did not provide such a reason because an irreducible minimum had been established. Galliford Try and Alumet had each had a reasonable opportunity to investigate and respond to the allegations. Alumet was therefore ordered to make a corresponding £300,000 payment to Galliford Try.
5. Galliford Try was ordered to pay Triuva £300,000, and Alumet was ordered to pay Galliford Try £300,000, by 5 pm on 3 March 2017. The fact and amount of the payments were not to be disclosed to the trial judge until liability and quantum had been determined.