had itself contended that the true contracting party was a different and solvent
company. The parties were, however, bound by an earlier adjudication decision
that the claimant was the true subcontractor. In Westshield , the associated
company that claimed to be the true sub-contractor offered to guarantee the
repayment of the judgment sum in the event that it was later determined that it
was the true contracting party.
WRB Energy Ltd offered to guarantee payment here if the court was otherwise
minded to grant a stay.
While finding it was probable that WRB would be unable to repay the judgment
sum, the court refused to grant a stay. On its own case, HCL chose to place the
subcontract with a newly formed dormant company. The risk it now complained of
was "the result for which it contracted". It would be unfair and contrary to the spirit
of adjudication to allow HCL to escape its liability on the basis of WRB's unchanged
financial position. Also, it was HCL who had resisted the argument that the true
subcontractor was WRB and thus had "made its own bed." Finally, the judgment
had been unavoidably delayed, giving HCL ample opportunity to establish its
alleged entitlement upon its cross claims.
Comment There is little new in this case on the question of stay and given the ‘ pay now argue later ’ mantra, the outcome was inevitable. It does, however, act as a reminder that VAT is not awarded automatically and that a claimant must at least
show it is registered for and liable to charge VAT. The comment that the delay in
giving judgment had allowed HCL time to establish its alleged entitlement is,
however, curious; since if HCL expected to obtain a stay, it would presumably not
have paid the judgment; and its entitlement to start another adjudication before
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