Assesmont Ltd v Brookvex IMS Ltd

On enforcement of an adjudicator’s decision, the court should address a substantive issue only where it is short, self-contained, requires no further evidence and has clear-cut consequences. A jurisdictional objection not taken promptly in the adjudication is generally too late. Fraud which could have been raised in the adjudication will ordinarily not prevent enforcement, although it may remain relevant to a stay of execution. Any fraud relied on at enforcement or on an application for a stay must be supported by clear and unambiguous evidence. A defendant seeking a stay because the claimant may be unable to repay the award bears the evidential burden; enforcement does not impose a separate burden on the claimant to prove solvency.

Assesmont obtained an adjudicator’s decision requiring Brookvex to pay £59,763.11 plus VAT for construction works. Brookvex participated in the adjudication without raising a jurisdictional objection and advanced valuation arguments, but did not raise its later allegations that the claim was fraudulent.

On an application for summary judgment to enforce the decision, Brookvex argued that there were separate contracts, that the payment regime had not been engaged, and that Assesmont had submitted fraudulent labour records. It also sought a stay of execution on the basis that Assesmont might be unable to repay the award. The issues were whether those matters could properly be raised on enforcement and whether the evidence justified refusing enforcement or granting a stay.

1. Enforcement jurisdiction. A jurisdictional objection must be taken promptly. Brookvex had participated in the adjudication without reservation and had asked the adjudicator to determine the lower works. Its later argument that separate contracts required separate payment applications was therefore too late. In any event, the issue could not be resolved summarily.
2. Limited substantive review. The court may determine a short and self-contained issue arising in the adjudication where no oral evidence or further elaboration is needed, and where the consequences are clear-cut. The alleged distinction between the contracts and its effect on the payment regime did not satisfy that test, as reflected in [2017] EWHC 517 (TCC).
3. Fraud. The allegations concerned the valuation of the works and could have been raised in the adjudication. Applying the principles identified in [2010] BLR 47, they were treated as having been decided there and did not provide a defence to enforcement. Even if the allegations could be considered, enforcement or a stay required clear and unambiguous evidence of fraud.
4. The discrepancies in time sheets, alleged signature irregularities, references to time and a half, and an unsubstantiated email fell far short of that standard. They might justify investigation at a substantive trial, but were equally consistent with error or misunderstanding.
5. Stay of execution. The defendant had to show sufficient evidence that the claimant could not repay the judgment sum. Requiring the claimant to prove its ability to repay would impose an unjustified additional test for enforcement. Brookvex had not discharged its burden.
6. Summary judgment was entered for Assesmont and execution was not stayed. The defence and counterclaim required substantial amendment, but their continuation was not made conditional on payment of the adjudication award.