1. Introduction The Enforcement of Adjudicators’ Awards under the Housing Grants, Construction and Regeneration Act 1996: Part 5 of 2019. Kenneth T. Salmon, Consultant Solicitor, Katy Ormston, Trainee Solicitor and Tiffany Low, Paralegal at Slater Heelis LLP. The law is stated at 31 May 2019. 2. Enforcement when another decision imminent MTD Contractors Ltd v Willow Corp SARL 6 The Defendant employer, Willow, engaged the Claimant, MTD, to construct a hotel. Willow failed to pay MTD the balance of the final account and retention. In a first adjudication the adjudicator ordered Willow to pay part of the retention. Willow’s agent issued a pay less notice claiming an entitlement to withhold the costs of remedying defects. MTD brought a second adjudication to challenge the pay less notice and the second adjudicator decided that claim in MTD’s favour. Willow brought proceedings in Court to challenge the second adjudicator’s decision and judgment on that claim was awaited. In a third adjudication, MTD claimed a declaration as the certificate of making good should have been issued and payment of the balance of the retention. The third adjudicator found for them awarding them £699,695 and MTD now sought to enforce that decision. Willow issued a Part 8 claim challenging the third decision. The Court had previously ruled, contrary to the usual practice, that the enforcement proceedings and the Part 8 claim should not be heard together. Willow argued that there was an important connection between the final judgment expected on the retention due pursuant to the second adjudication and the question of the validity of the third adjudication decision, on the balance of the retention. Effectively, if the second decision were set aside or the findings as to the deductions for defects were set aside or determined to be unenforceable, then the third decision would be unenforceable. Pursuant to authority, the Court held that the third decision would be enforced whether it was right or wrong unless there was no jurisdiction to make it or there was a breach of the rules of natural justice. It was all about interim cash flow and decisions were routinely enforced on this basis. The fact that the decision was to be challenged in some other forum was, of itself, seldom, if ever, grounds for resisting enforcement, see PBS [below]. The fact that judgment in the Part 8 challenge on the second decision was imminent was no more reason than the Part 8 challenge to the third decision itself, not to enforce that decision. The Court practice was not to take into account arguments that the decision might be incorrect. Neither was it right to refuse enforcement because the decision might be vulnerable
to challenge on jurisdictional and / or natural justice grounds because of the imminent judgment on the second decision. It would be contrary to settled practice and authority on enforcement to await the outcome of a Part 8 challenge to the third decision There was no justification for a conditional order, and Willow had not sought to seek a stay and could not satisfy the grounds for a stay. Willow was not entitled to obtain equivalent relief by another route. Judgment for the Claimant (MTD). 3. Fraud PBS Energo A.S. v Bester Generacion UK Ltd 7 This was an application for summary judgment by PBS for the unpaid amount of an adjudication award in their favour by Mr Judkins in the sum of £1.7m plus interest. Background Bester entered into a contract to design and build a biomass- fired energy generating plant in Wrexham for Equitix CHP Wrexham Ltd. They subcontracted certain works to PBS. The subcontract price was £14.23m plus VAT. A dispute arose and PBS gave notice of intention to terminate its employment. Bester who denied PBS was entitled to terminate, at first sought to affirm the subcontract. Later by letter they purported to terminate the subcontract. A dispute as to termination was referred to adjudication before Mr Simon Tolson who found for PBS. He was not required to deal with quantum but was asked to and did order Bester to repay performance security of £2.7m that had been taken by Bester. Bester did not pay and PBS had to take enforcement proceedings which resulted in them obtaining summary judgment in January 2018 and thereafter the return of the security. In those proceedings the judge, Stuart-Smith J. criticised Bester for raising numerous spurious issues and failing to consent to judgment. PBS issued adjudication proceedings before Mr Judkins claiming the balance of the subcontract sum pursuant to the termination provisions. They were specifically required to give credit for the value of equipment that has not been delivered up under the subcontract and which PBS had retained. Based on valuation evidence before him Mr Judkins awarded PBS a net balance of £1.7m and further on the witness evidence of PBS found that they were not required to give any credit as the equipment in question was stored and available and would belong to Bester once they had paid the balance of the subcontract price. In response to PBS’s application for summary judgment Bester said claims made in the adjudication that the equipment was stored to Bester’s order and would be available to them on payment, were simply untrue: some of the items were not stored as claimed; orders placed by PBS for other items had been cancelled; the cancelled order values indicated that the values placed on other items of equipment had been overstated in the valuation claim. Thus Mr Judkins had been misled.
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