Melton Town Football Club Limited v Hunts Contractors Limited

An application for security for costs may be heard before adjudication-enforcement proceedings where doing so will not delay or derail the enforcement hearing. The right to seek security under CPR Part 25 must be balanced against adjudication’s requirement for swift enforcement. A stay should not be granted merely because security is sought if the application can be listed and determined in sufficient time. The court retains a discretion after the relevant condition is established, including whether the claim is bona fide, whether it has reasonably good prospects, and whether security would oppressively stifle a genuine claim.

The claimant obtained an adjudication award of approximately £934,000 arising from alleged defects in a synthetic football pitch. It issued adjudication-enforcement proceedings. The defendant applied for security for costs and sought an earlier hearing and a stay of enforcement proceedings pending determination of that application.

The court considered the interaction between the security-for-costs jurisdiction under CPR Part 25 and the policy requiring adjudication decisions to be enforced promptly. The central issue was whether hearing the security application before the summary judgment enforcement hearing would impermissibly undermine that process.

1. Application allowed in part. The security-for-costs application was listed for an earlier hearing, but the requested stay of the adjudication-enforcement proceedings was refused.
2. Under CPR 25.12, a defendant may apply for security at any stage, but the application should be made promptly once the relevant facts are known. Under CPR 25.13(1) and CPR 25.13(2)(c), the court must be satisfied that it is just to make an order and that the claimant is a company or other body which there is reason to believe will be unable to pay the defendant’s costs.
3. Once the relevant condition is established, granting security remains discretionary. Relevant considerations include whether the claim is bona fide, whether it has reasonably good prospects of success, admissions that money is due, and whether the application is being used oppressively to stifle a genuine claim. The court should not ordinarily try the merits unless the likely outcome is perfectly clear, as explained in Sir Lindsay Parkinson v Triplan Ltd [1973] 2 WLR 632.
4. Adjudication is intentionally summary and swift. Its provisional decisions are generally to be enforced pending final determination. The possibility of unfairness in an individual case does not determine the proper construction or effect of the adjudication scheme: Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93; Bouygues v Dahl-Jensen [2000] BLR 522.
5. There was no inherent inconsistency between hearing the security application and the adjudication-enforcement process. The decisive consideration was case management: the available dates permitted the security application to be heard without affecting the summary judgment hearing listed for 14 August 2023. A stay would have risked delaying enforcement and was therefore refused.
6. The defendant was the successful party on the application and was awarded its costs, subject to reductions for unnecessary attendance and an excessive brief fee.

First-instance decision. The judgment records that directions for the adjudication-enforcement proceedings had previously been made by O’Farrell J on 6 June 2023.