J & B Hopkins Limited v A & V Building Solution Limited

A stay of execution of a judgment enforcing an adjudicator’s decision is exceptional. The court must nevertheless exercise its discretion under CPR 83.7 where enforcement would cause manifest injustice, including where the judgment debtor cannot pay and enforcement would probably destroy an arguable claim concerning the true account between the parties. The usual pay now, argue later policy remains important, particularly between commercial parties, but the court may consider whether the adjudicator’s decision is likely to be modified at a final trial when deciding a stay.

A stay of related true-value proceedings is also exceptional and normally concerns deliberate non-payment. Security for costs should be refused where it would stifle an arguable claim.

Two related actions arose from a construction project. J & B Hopkins Limited sought enforcement of an adjudicator’s decision requiring A & V Building Solution Limited to pay money. Summary judgment had been entered in Hopkins’s favour. A&V then pursued a separate claim concerning the final account, variations, alleged prevention from completing the works, losses and interest.

The court considered the adequacy of A&V’s amended pleading, A&V’s application for a stay of execution, Hopkins’s application to stay A&V’s action pending payment, and Hopkins’s application for security for costs.

1. Pleading. A&V’s pleading was inconvenient and insufficiently particularised in several respects. It was ordered to replead the surviving claims in a Scott Schedule, separating factual allegations, contractual claims, variations, loss and quantum. Claims for previously determined legal costs and for directors’ mental suffering, distress and physical inconvenience were struck out or excluded.
2. Non-pecuniary loss. The general contractual rule is that damages are not recoverable for distress, anxiety or aggravation caused by breach. The recognised exception applies where the very object of the contract is pleasure, relaxation, peace of mind or freedom from molestation, and in appropriate cases for physical inconvenience and directly related mental suffering. A commercial construction contract, including any agreement to adjudicate, could not sensibly be treated as having that object, especially where the alleged victim was a director rather than the contracting party.
3. Stay of execution. CPR 83.7 confers a discretion where special circumstances make enforcement inexpedient or the applicant is unable to pay. There is a strong presumption against staying a money judgment, reinforced in adjudication cases by the statutory pay now, argue later policy. The discretion nevertheless extends to cases where enforcement would or might cause manifest injustice. The applicant need not prove that its financial condition was caused by the judgment creditor, although that connection strengthens the case.
4. The court granted a stay of execution. A&V’s corporate resources were effectively exhausted; its arguable final-account claim could be destroyed by execution; Hopkins’s conduct had exacerbated A&V’s financial difficulties; and the second adjudicator’s decision was open to substantial argument, including because oral evidence would be available at trial. Enforcement was unlikely to produce a financial recovery for Hopkins and might lead to A&V’s winding-up.
5. Stay of proceedings. A&V’s action was not stayed. The authorities concerning deliberate refusal to honour an adjudicator’s award were distinguishable because A&V was unlikely, and in practical terms unable, to pay. It would also be inconsistent to stay execution to avoid manifest injustice while preventing A&V from pursuing its arguable claim.
6. Security for costs. Security was refused because it would stifle an arguable claim.

The surviving action was directed to proceed, subject to further directions.

• High Court (Technology and Construction Court): summary judgment was previously entered in Hopkins’s favour in [2023] EWHC 301 (TCC). The present judgment supplemented an earlier judgment in [2023] EWHC 1483 (TCC).
• Court of Appeal: an earlier decision of Eyre J was substantially overturned in [2023] EWCA Civ 54.