Summary For all these (above) reasons it was only be in exceptional circumstances that a company in insolvent liquidation (and facing a cross claim) could refer a claim to adjudication, and having succeeded, obtain summary judgment and avoid a stay of execution. Thus even though the adjudicator may technically have jurisdiction, it is something that could lead to a meaningful result. Solution to the incompatibility problem TheCourt held the answer was that adopted in this case namely the grant of an injunction to restrain the further continuation of the adjudication if it would be a futile exercise. Whether the Court will grant an injunction will depend on the facts of the case. Primus Build Ltd v Cannon Corporate Ltd The facts of this case were more complicated but are only set in summary below. Cannon engaged Primus to design and build a new hotel. In July 2016 Primus served a payment notice for £261,222. Cannon served pay less notice putting the amount due at “nil”. Cannon served a notice of termination and ordered Primus to leave site. Each side alleged the other had repudiated the contract. That dispute became the subject of the second adjudication between the parties in which the adjudicator held Cannon were in repudiatory breach. In a third adjudication, the same adjudicator held Cannon liable to pay Primus £222,542. That sum was not paid. Primus issued proceedings in Court claiming damages for breach of contract together with the unpaid sum from the third adjudication and a freezing order to the value of £750,000. An undertaking was given by Cannon not to deal with the hotel in such a way as to reduce its value below £2.7 million. Cannon made its own claims for breach of contract, defects and other matters and that litigation was on going at the date of the appeal. Primus entered into a CVA. Though Primus was insolvent, the directors’ proposal was that Primus would trade out of its difficulties and pay creditors in full, based on a belief that Primus would make a very significant recovery from debtors including Cannon. Primus then referred its claim for damages for repudiatory breach, to adjudication (the fourth adjudication). The adjudicator found a sum of £2.128m due to Primus, plus interest. In arriving at that figure he addressed and rejected almost all of Cannon’s cross claims. In the litigation Cannon made an unsuccessful application for security for costs. In refusing the Order, O’Farrell J. noted Primus had “a very strong case that its financial difficulties have been caused in large part by Cannon’s wrongful termination.”
Primus sought to enforce the fourth adjudication decision by summary judgment. The application was heard before HHJ Waksman. At first Cannon expressly accepted in writing that Primuswas entitled to summary judgment but wouldseek a stay of execution. They later sought to withdraw that concession, then, later still, reinstate it. HHJ Waksman reserved judgment. He referred the parties to a decision of Akenhead J. 12 on which he invited submissions, whereupon Cannon asked and were allowed to withdraw their concession for a second time. HHJ Waksman decided that if Primus was to make all or most of its recovery it would emerge solvent from the CVA. After considering the judgment in Westshield , HHJ Waksman concluded was no procedural bar to summary judgment, merely because that because a company with an adjudication decision was in a CVA and there was a counterclaim; nor did it follow there must be a stay of execution. His Honour then went on to consider the application for a stay on Wimbledon 13 principles. Like O Farrell. J., before him, 14 he concluded that Primus’ financial position was due wholly or in part to Cannon’s repudiation and failure to pay relevant sums. He declined to order a stay. Waiver Cannon’s point that the adjudicator lacked jurisdiction because of the existence of the CVA failed for the reasons given in Bresco (above). But the Court held it was not open to Cannon to take the point in any case. It held in short, that Cannon’s general jurisdictional reservation was insufficiently clear and irrelevant to the specific point. Having distilled the principles from previous cases, and having regard to the facts of the instant appeal, and not least because the point was taken for the first time on appeal, when it was too late for Cannon to do so, the Court ruled: a) That any proper jurisdictional objection was limited to the two points which the adjudicator had already decided against Cannon. b) The general reservation was too vague to be effective; c) It was in any event superseded by the two specific objections; d) Cannon knew or must be taken to have known about the ‘insolvency’ argument as the case law in support was decided in 2010 and they had specialist legal advice and were to be taken as having waived any objections beyond those specifically raised.
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