The basis of the claim for a stay was that BLL’s financial position rendered it probable that it would be unable to repay the amount awarded in Decision 1 if required (per Wimbledon v Vago and Gosvenor v Aygun[17]). PAML was obliged to accept following S&T v Grove[18], that it was not entitled to commence a true value adjudication in respect of interim application 19 as it had not paid the amount awarded in Decision 1. However, the issue that arose here was slightly different: could PAML start what would be a ‘true value’ adjudication in respect of the final account? The court noted the fact that Decision 3, deciding that BLL had been entitled to terminate, was based on PAML’s failure to pay sums due to BLL, and in particular the amount awarded in Decision 1. The possible subject of the (as yet un-started) adjudication would be the determination of a notional final account, where the amount of that final account would be dependent on the validity of Decision 1. To allow that adjudication to proceed without first requiring payment of the sum decided would be “a remarkable intrusion into the principle established by S&T” and one which would “permit the adjudication system to trump the prompt payment regime...” Accordingly, it was not open to PAML to commence a final account adjudication without first having paid the amount awarded in Decision 1. Therefore, there was no justification for granting a stay.
The court went on to consider whether there was any basis for a stay to permit court proceedings to determine the true value of the account. It would not be right to grant a stay to allow PAML to bring litigation proceedings to determine the final account, because Prime had failed to pursue such claim with diligence, noting that any stay should only be for the shortest possible period to permit the proceedings to be concluded. Such delay could of itself be a bar to a stay[19]. The court also briefly considered arguments put forward by PAML as to BLL’s financial position and ability to repay any sums later found not to have been due. The evidence did not satisfy the court there was such inability. The court observed that the difficulties imposed on by the effects of the COVID-19 epidemic meant it was not easy to know at what date any repayment might occur and therefore at what date to look at the ability or otherwise to repay. There had been what the court described as a ‘serious’ allegation that the directors of BLL had so ordered the company’s affairs as to reduce its ability to repay but that allegation was not proved.
Summary judgment granted and stay refused.
[17] Wimbledon Construction Company 2000 Ltd v Vago [2005] EWHC 1086 (TCC), 101 ConLR 99Gosvenor London Ltd v Aygun Aluminium UK Ltd [2018] EWCA Civ 2695, 182 ConLR 38ct [18] S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448, 181 ConLR 66 [19] See paragraph 17.28 of the 4th edition of Coulson on Construction Adjudication; and HHJ Toulmin CMG QC in ALE Heavylift v MSD (Darlington) Ltd [2006] EWHC 2080(TCC) at paragraph [100].
Made with FlippingBook Online newsletter