Broseley London Ltd v Prime Asset Management Ltd

Adjudication decisions are ordinarily enforced summarily because adjudication provides a rapid, interim resolution of construction disputes. A stay of execution requires evidence of a very real risk that the successful party will be unable to repay the judgment sum. The court must also consider whether the applicant has pursued the underlying dispute with diligence.

A stay may be justified by insolvency, materially changed financial circumstances, or a real risk that the adjudication payment will be dissipated. The latter ground is exceptional and requires evidence broadly equivalent to that required for a freezing order. A party cannot use a further true-value adjudication to circumvent the prompt-payment consequence of an earlier adjudication without first paying the sum awarded.

Broseley London Ltd obtained an adjudicator’s decision requiring Prime Asset Management Ltd, as trustee of the Mashel Family Trust, to pay £485,216.17 plus VAT and interest. Broseley applied for summary judgment to enforce the decision. Prime accepted that judgment should be entered but sought a stay of execution for approximately two months, pending determination of the true value of the parties’ final account.

The court considered whether Prime had shown a probable inability to recover the judgment sum, whether Broseley’s financial position had deteriorated, whether the sum was at risk of dissipation, and whether Prime could commence a further true-value adjudication without first paying the amount awarded in the earlier adjudication.

1. Judgment was entered for Broseley London Ltd for £485,216.17 plus VAT, with interest at 5.75 per cent from 1 August 2019 until payment. Prime’s application for a stay of execution was refused.

2. The principles in Wimbledon Construction Co 2000 Ltd v Vago [2005] B.L.R. 374, as supplemented by Gosvenor London Ltd v Aygun Aluminium UK Ltd [2019] B.L.R. 99, applied. The successful adjudication party should not generally be kept out of its money. The burden lies on the party seeking a stay to establish a very real risk of future non-payment.

3. Prime had not pursued litigation to determine the true value of the final account with due diligence. That failure was itself sufficient to justify refusal of the stay. The court also considered that Prime had delayed in seeking a final determination while pursuing other procedural and jurisdictional tactics.

4. Following S & T (UK) Ltd v Grove Developments [2018] EWCA Civ 2448, Prime could not challenge the amount awarded in the first adjudication through a further true-value adjudication without first paying the amount awarded. Permitting that course would allow the adjudication process to override the prompt-payment regime.

5. Prime had not established that Broseley would probably be unable to repay the judgment sum. The evidence concerning Broseley’s accounts and current projects did not satisfy the burden of proof, and the effect of the Covid-19 emergency measures remained uncertain. The court did not need to determine all the other financial grounds.

6. The alleged risk of dissipation was not established. The guidance in Gosvenor London Ltd v Aygun Aluminium UK Ltd [2018] EWHC 227 (TCC) requires exceptional circumstances and a high evidential threshold broadly equivalent to that for freezing relief. Ordinary use of adjudication proceeds in business is not enough.

First-instance decision. No prior appellate decision is stated in the judgment.