Gosvenor London Ltd v Aygun Aluminium UK Ltd

Adjudicators’ decisions are ordinarily enforced summarily, even where errors of fact or law are alleged. Fraud may resist enforcement only where supported by clear and unambiguous evidence and directly affecting the subject matter of the adjudicator’s decision. Fraud independent of that subject matter will generally not prevent enforcement. A stay of execution may nevertheless be granted as a special circumstance where there is a real risk that the judgment will go unsatisfied because the successful party intends to dissipate or dispose of the adjudication sum. This is exceptional and requires evidence broadly comparable to that required for a freezing order.

Gosvenor obtained an adjudicator’s decision for £553,958.47 plus VAT against Aygun under a construction subcontract. Gosvenor sought summary judgment to enforce it. Aygun alleged fraudulent inflation of labour invoices and sought a stay of execution if enforcement succeeded. It also relied on alleged threats and intimidation and discrepancies in Gosvenor’s statutory accounts.

The fraud allegations concerning the works had not been raised in the adjudication. The court considered whether they could resist enforcement, whether the later allegations were relevant, whether there were special circumstances justifying a stay under CPR Part 83.7(4), and whether the applications could be reopened after circulation of the draft judgment.

1. Summary judgment. Gosvenor was entitled to summary judgment on the adjudicator’s decision. Adjudicators’ decisions ordinarily have temporary finality and are enforced summarily.
2. Fraud. The principles in SG South Ltd v Kingshead Cirencester LLP [2009] EWHC 2645 (TCC), applied in GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2010] EWHC 283 (TCC) and approved in Speymill Contracts Ltd v Eric Baskind [2010] EWCA Civ 120, were followed. Fraud must be supported by clear and unambiguous evidence and argument. Matters which were, or could have been, raised before the adjudicator ordinarily cannot be used to obtain a second enforcement hearing.
3. Fraud directly affecting the subject matter of the decision may be relevant to enforcement. Fraud independent of that subject matter generally should not prevent enforcement. The alleged threats to a witness were independent of the decision and did not affect summary judgment.
4. Stay. Under Civil Procedure Rules 1998 Part 83.7(4), a stay may be justified where there is a real risk that a future judgment will go unsatisfied because the claimant has organised its financial affairs, other than in the ordinary course of business, to dissipate or dispose of the adjudication sum. The test is exceptional and requires a high evidential standard.
5. The evidence established the necessary risk. The contradictory accounts and unsatisfactory explanations reinforced that conclusion. Aygun was therefore entitled to a stay of execution.
6. Draft judgment. A judge may alter a judgment before it is entered and perfected, but circulation of a draft is not an opportunity to reargue the case or introduce evidence which could have been served earlier. The court corrected a factual error concerning the period covered by the adjudication claim, without altering the result.
7. The applications to adduce further evidence, impose conditions on the stay, and require payment into court were refused.

First-instance decision. The judgment records no appeal from an earlier decision in the same proceedings.