4) Stay of execution - manifest injustice: JRT Developments Ltd v TW Dixon (Developments) Ltd HT-2020-BMH-000010 The defendant, TW Dixon (TWD), engaged the claimant JRT Developments (JRT), to design and build a residential development in Shropshire. Following a break down in relations, JRT purported to terminate the contract in June 2019. The parties corresponded over financial matters, and in November 2019 JRT issued what it claimed was a payment notice in default of any payment notice from TWD. The notice claimed JRT was entitled to a sum just shy of £1m. TWD did not serve a pay less notice nor make payment. JRT referred the dispute over payment to adjudication. The adjudicator found TWD was liable for the whole of the sum claimed by JRT who now issued proceedings to enforce the decision and TWD issued separate proceedings under Part 7 CPR to determine the true value of the sum (if any) due to JRT. Before the court TWD accepted that JRT was entitled to summary judgment, but sought a stay of execution pursuant to CPR 83.7(4) on the basis of the following ‘special circumstances’. First, in accordance with the criteria laid down in Wimbeldon Construction Company 2000 v Derek Vago[10] that a stay should be granted on the grounds of JRT’s probable inability to repay the judgment sum if called upon to do so after a trial of the true value issue.
Second that there would be “manifest injustice” to TWD based not just on probable inability to repay, but having regard to all the circumstances of the case, citing Galliford Try Building Ltd v Estura Ltd[11]. In reply, JRT said that the test Wimbledon was not met, and that, for the court to find that there would be manifest injustice, the circumstances would have to be exceptional and the court would have to consider what sum TWD was able to pay. The court considered detailed evidence of JRT’s financial position, its accounts, balance sheets and bank statements and had regard to its other liabilities. Although JRT could not be said to be insolvent the court concluded it was unlikely to be able to repay the judgment sum if later ordered to do so after a trial of the part 7 claim. Applying the other part of the Wimbledon test, the financial position of JRT was substantially different than it had been when the contract was entered into and posed a higher risk; and the present financial position was not due wholly or in significant part to failure to pay the sum awarded in the adjudication.
On the question of manifest injustice, the court found the facts of the case to be very unusual.
It took into account the following facts and matters as relevant circumstances, listed overleaf.
[10] [2005] EWHC 1086 (TCC); and Broseley London Ltd v Prime Asset Management Ltd [2020] EWHC 944 (TCC) [11] [2015] EWHC 412 (TCC)
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