J & B Hopkins Ltd v A & V Buildings Solution Ltd

A stay of execution under CPR 83.7 requires the applicant to establish inability to pay or special circumstances. Where inability to pay is alleged, the applicant must address the company’s resources and the probable availability of funds from owners or other closely associated persons. The court assesses the underlying financial realities and retains a separate discretion whether to grant the stay. A no-set-off provision or equivalent pay-now-argue-later arrangement is a powerful factor against a stay. A failure to comply with a pre-action protocol does not itself justify default judgment, although the claimant may commence its substantive claim.

Two related actions arose from a subcontract for mechanical works. J & B Hopkins Limited had obtained summary judgment enforcing an adjudication decision requiring A & V Building Solution Limited to pay money. A&V subsequently brought a claim concerning the final account, adjudicator’s fees and legal costs, and sought default judgment. J&BH applied to strike out or require proper particulars, stay the claim, and obtain security for costs. A&V sought a stay of execution of the enforcement judgment.

The court determined the strike-out and default-judgment issues and considered the applicable principles governing A&V’s stay application, adjourning final determination of that application to permit further financial evidence.

1. Action 6 of 2023. The claim form did not set out a claim in a form to which a defence could sensibly be pleaded or which provided an agenda for trial. It was not appropriate to strike out the substantive final-account claim entirely because A&V appeared to have a bona fide dispute. A&V was instead required to plead how the sum claimed was calculated, including quantities, variations, contractual breaches and resulting losses.
2. A failure to comply with the Pre-Action Protocol for Construction and Engineering Disputes did not entitle a claimant to default judgment. It permitted the claimant to commence its substantive claim without further protocol compliance. The application for default judgment was therefore dismissed.
3. The claim for adjudicator Mr Blizzard’s fees could proceed only to the extent of the 50% awarded against J&BH. The balance and the claims for legal costs already adjudicated upon by the court or Court of Appeal were struck out for want of jurisdiction.
4. Stay of execution. CPR 83.7 confers a discretion where special circumstances exist or the applicant is unable to pay. Under the inability-to-pay ground, the burden rests firmly on the applicant to establish inability to pay, including that funds would not be made available by its owner or another closely associated person. The court must then separately decide whether to exercise its discretion. A no-set-off clause, or an equivalent adjudication pay-now-argue-later arrangement, is a very strong discretionary factor.
5. The evidence indicated that A&V was highly unlikely to satisfy the judgment debt from its own resources, but material questions remained concerning its current accounts, liabilities, tax position and funding from its director or others. It was just to permit further evidence addressing those matters before final determination of the stay application. The remaining applications were adjourned, save that time for service of the defence was extended to allow re-pleading.

The judgment records that an earlier judgment of Eyre J in the related proceedings was substantially overturned by the Court of Appeal in [2023] EWCA Civ 54. That decision concerned the same project and litigation but was not the decision under appeal in this judgment.