G & D BRICKWORK CONTRACTORS LTD v MARBANK CONSTRUCTION LTD
G & D BRICKWORK CONTRACTORS LTD v MARBANK CONSTRUCTION LTD
Technology and Construction Court
Joanna Smith J
14 October 2021
Joanna Smith J in striking out the enforcement proceedings stated that they involved a claim for summary judgment in respect of the same cause of action that was before the Portsmouth County Court and was struck out. There was no material difference between the county court proceedings brought by the sub-contractor and the adjudication it brought since both involved claims for a final account of the sum due to it arising out of the same project and seeking to enforce the same contractual obligations. The mathematical discrepancies in the figures identified in the respective claims did not affect this conclusion.
It was an abuse of process in the enforcement proceedings for the sub-contractor to litigate the same issues which were raised but not adjudicated upon in the court proceedings. This was a case where (i) The sub-contractor’s conduct of the county court proceedings was found to be inexcusable and (ii) A strict approach should be adopted and the court’s discretion should be exercised to strike out the second action save in very unusual circumstances. The fact that this conduct may not have been intentional did not mean that (i) There was a good explanation for it or (ii) The failures were somehow excusable. Equally the fact that the sub-contractor was heavily reliant upon its solicitors and that it was those solicitors who appear to have acted negligently in dealing with the county court proceedings does not affect the position.
The court’s discretion should not be exercised to allow the enforcement proceedings to continue in the absence of any unusual circumstances which militated against a strike out. The sub-contractor submitted that the following factors weighed in its favour (i) Regard should be had to the fact that its solicitors appeared to be to blame for the situation in which it found itself (ii) The outcome of the adjudication had established that the sub-contractor was in fact entitled to a substantial sum of money and (iii) The very nature of enforcement proceedings following an adjudication meant that the court would be inherently unwilling to strike them out and the court should be slow to overturn the established order of things. None of these factors gave rise to unusual circumstances such that the court should permit the enforcement proceedings to continue. These factors were also not sufficient to justify the continuation of the enforcement proceedings in the interests of justice, particularly having regard the extent to which the scarce resources of the County Court were utilised during the county court proceedings.
THE FULL TEXT OF THE JUDGMENT OF JOANNA SMITH J
- I have before me today two matters:
(i) First, an application by G&D Brickwork Contractors Limited (“G&D”) for summary judgment pursuant to CPR Part 24 on its Part 7 claim for enforcement of an adjudication award dated 23 July 2021 (“the Enforcement Proceedings”) under the Housing Grants, Construction and Regeneration Act 1996 (as amended) (“the 1996 Act”) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649) (” the Scheme “); and
(ii) Second, a Part 8 claim made by Marbank Construction Limited (“MCL”) seeking a declaration that it would be an abuse of process for G&D to seek to enforce the adjudicator’s award and inviting the court to strike out the Enforcement Proceedings. The Part 8 claim seeks similar relief in relation to three other adjudications between the parties, but it has been agreed that, for present purposes, the court will consider the Part 8 claim only insofar as it is concerned with the adjudication which is the subject matter of the Part 7 claim.
- The Enforcement Proceedings are supported by a witness statement from Mr Jonathan More of Spencer West LLP, G&D’s solicitors, dated 15 August 2021. The Part 8 claim is supported by a witness statement from Mr Mark Williams of W Davies, MCL’s solicitors, dated 19 August 2021. It is common ground that, in practice, Mr Williams’ statement advances the grounds on which the Enforcement Proceedings are opposed. Mr More has served a further statement in the Part 8 claim dated 6 September 2021, responding to that of Mr Williams. I have read all of these statements and their exhibits and take them into account in this judgment.
- Practitioners in this court know that the grounds on which the court will refuse to enforce adjudication awards are extremely limited and it is usually difficult for defendants to enforcement proceedings to bring themselves within those grounds. As Lord Briggs said in the case of Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited  UKSC 25 at :
”…There is no formal avenue of appeal against an adjudicator’s decision, and the court will in general summarily enforce it, regardless of whether it is correct on the merits, provided that the adjudicator acted independently and within their jurisdiction.”
- However, the grounds on which MCL seeks to strike out the Enforcement Proceedings are extremely unusual, not least because they arise in circumstances where, contrary to the usual run of things, these parties have already been before the court in relation to the very matter which is the subject of the adjudicator’s award. Overwhelmingly, parties to construction contracts who wish to seek a determination of their disputes choose to adjudicate as a first step and will only have recourse to litigation as a second step, if necessary. Section 108(3) of the 1996 Act expressly contemplates that this will be the sequence. If a party exceptionally chooses to litigate first there will usually be no need for subsequent adjudication proceedings, and thus no need for enforcement proceedings, because that party will either obtain a judgment in its favour in the litigation or its claim will be dismissed. In either case the dispute will have been finally determined and there will be no dispute left to adjudicate.
- In this case, however, G&D commenced County Court proceedings against MCL in June 2017 (” the County Court Proceedings “), which were struck out for procedural failings and so never got to trial. G&D says that, in the circumstances, the County Court Proceedings were never finally determined and that it is entitled to a second bite of the cherry by way of adjudication, together with enforcement by the court. MCL disagrees. It contends that the principles that would be applicable to a second action in court must also apply to enforcement proceedings before the court on the basis that the claiming party should not be in a better position than it would have been in if it had commenced a second action in court merely because the adjudication route is available to it instead. A proper application of those principles on the facts of this case, says MCL, supports an order that the Enforcement Proceedings be struck out.
The County Court proceedings
- G&D is a brickwork sub-contractor. Marbank is a building main contractor. By way of a sub-contract agreement MCL engaged G&D to carry out labour only brickwork and associated works at a property known as Hayes 180, 1-3 Uxbridge Road, Hayes, UB4 0JN (“Uxbridge Road”). G&D issued four invoices between November 2016 and January 2017 in respect of the works totalling, it is now said in the adjudication proceedings, £72,814.50, exclusive of VAT. In the adjudication proceedings, it is said that MCL assessed the applications for payment as totalling £35,801.50, exclusive of VAT. There was thus a dispute between the parties as to the balance.
- On 27 June 2017 G&D issued a Part 8 claim form in the County Court for breach of contract in respect of the supply of services by MCL. The claim form stated that MCL had failed to pay G&D’s invoices totalling £106,006.20, and sought a payment of interest and costs. The particulars of claim referred to a contract between the parties for the supply of services at three different sites, including Uxbridge Road, and asserted that, in breach of its contractual obligations, MCL had failed to pay G&D’s invoices in full. The cumulative outstanding debt in respect of the three different sites referred to in the particulars of claim was identified as £106,006.20.
- On 3 November 2017, Deputy District Judge Coppen, sitting at the County Court at Portsmouth, struck out G&D’s claim on the grounds that it should have been commenced under the CPR Part 7 procedure. The order noted that any application by G&D to restore the claim must be accompanied by a fully pleaded particulars of claim in compliance with CPR 16.4.
- On 23 November 2017 G&D applied for permission to restore its claim. The witness statement in support of the application from G&D’s solicitor floated the possibility that it might be appropriate to stay the proceedings “pending the outcome of an adjudication provision”, but nothing appears to have come of this. The application was accompanied by draft particulars of claim in similar form to the original particulars of claim, save that the amounts that were due and owing in respect of the three different sites were now specifically identified. The claim in respect of Uxbridge Road, referred to as the “Hayes contract”, was put at £87,377.40 plus VAT, i.e. £104,852.58. Together with the outstanding sums from the other sites, G&D stated that £211,386.88 was outstanding, less payments received of £105,380.68, i.e. a total of £106,006.20.
- MCL’s solicitors complained about the inadequacy of these particulars of claim, a complaint which appears to have found favour with the court because on 10 January 2018 Deputy District Judge Dack set aside the earlier order, ordered that “this claim be forthwith transferred to CPR Part 7, but also ordered (at paragraph 3) that, unless G&D filed and served an amended particulars of claim, complying with CPR 16.4 by 31 January 2018, the claim would be struck out.
- On 31 January 2018 G&D’s solicitors purported to serve amended particulars of claim on MCL’s solicitors by email, but were met with the response (in a letter dated 9 February 2018) that this service was not effective pursuant to CPR 6, PD 4.1(1)(a), because MCL’s solicitors had not confirmed beforehand that they would accept service by email. MCL’s solicitors expressed the view that, in the circumstances, G&D’s claim had been struck out. Furthermore, they pointed to the numerous deficiencies that they had identified in the amended particulars of claim, including breaches of provisions within the CPR.
- Apparently recognising their error, G&D’s solicitors issued an application on 14 February 2018 for relief from sanctions in respect of paragraph 3 of the order of 10 January 2018. The witness statement in support accepted various errors in relation to the attempted service of the amended particulars of claim and its contents, but asserted that these were “technical breaches of the rules”, and were capable of rectification.
- On 20 April 2018, Deputy District Judge Dack granted relief from sanctions. His order was made by consent. He gave directions for service of statements of case and the listing of a costs case management hearing.
- G&D subsequently served an amended particulars of claim replacing their original particulars of claim. This statement of case was pleaded in a great deal more detail than previously, and in particular the details of the Uxbridge Road project were set out in full. In paragraph 30 of the amended particulars of claim G&D pleaded that it had submitted invoices for the Uxbridge Road project totalling £87,377.40, that MCL had paid £40,813.72 in satisfaction of these invoices, and that accordingly £46,563.68 remained outstanding. It is not clear how these figures marry up with those claimed in the adjudication but, as I shall return to later, this mathematical discrepancy cannot be regarded as a material difference between the County Court Proceedings and the claim made in the adjudication.
- By an amended defence, MCL asserted (amongst other things) that it was embarrassed by the lack of particularity as to the invoices outstanding. The action was then stayed by order of the court dated 13 July 2018 until 23 October 2018, expressly for the purpose of alternative dispute resolution. On 24 October 2018, the matter was listed for a costs case management conference to be held on 12 December 2018. It is unclear whether this hearing ever took place, but the matter seems to have been left in abeyance by G&D until 1 August the following year, 2019, when their solicitors wrote to MCL sending further information about their claim and suggesting mediation.
- On 8 August 2019 an unidentified district judge gave directions by consent up to a further CMC to take place after 17 January 2020. On 28 January 2020, Deputy District Judge Veysey ordered an extension of time for exchange of witness statements by consent, and it would appear from the evidence that on 7 February 2020 witness statements were exchanged.
- On 10 February 2020 District Judge Ball noted that the parties had agreed their respective costs budgets and he ordered that the claim be stayed to 29 May 2020 for the purposes of mediation. Paragraph 2 of his order was in the following terms:
”The parties shall, in the event that the matter does not settle, seek further directions by 21 June 2020, and in default the claim shall stand struck out.”
It must be assumed that this sanction was attached to the order in circumstances where the district judge was alive to the extremely leisurely pace at which the case had been progressing to date, and/or the fact that there had been earlier procedural defaults on the part of G&D, including defaults that had led to the case being struck out twice before, and wished to ensure that, in the event that mediation failed, the matter would swiftly progress to a final hearing.
- On 27 July 2020, over a month after the date on which the parties were to seek further directions from the court, Deputy District Judge Collins ordered that the claim be struck out “upon G&D having failed to comply with the order of 10 February 2020”. This prompted an application from G&D dated 5 August 2020 for relief from sanctions, supported by a witness statement from G&D’s then solicitor, Ms Milner. That statement referred to the lockdown due to the Covid 19 pandemic and explained that Ms Milner’s father had died on 21 June 2020. Ms Milner said that, owing to the pandemic, there had been no one available to monitor files because she had no cover in the office (which consisted of only four people) and she had needed time to grieve for her father’s death. The statement went on to acknowledge that the decision on whether to grant relief would be guided by the principles in Denton v TH White Limited  EWCA Civ 906, and it addressed each of those principles in turn. In essence it was argued by Ms Milner that the delay had not led to serious prejudice to either party, that she and her firm had been subject to unprecedented circumstances in the form of the pandemic and the death of her father, and that the failure to comply with the court order had not been deliberate.
- By order dated 12 November 2020, after hearing from MCL’s solicitor and counsel for G&D, District Judge Ball dismissed the application for relief from sanctions with the costs of the claim to be paid by G&D to MCL. There was no appeal against this order.
- I enquired during the course of the hearing today as to whether a transcript of the judgment is available, but it seems that it is not. However, it was common ground between counsel that it is to be assumed (and I must proceed on the footing) that the court refused to grant relief having regard to the Denton principles, i.e. on the grounds that the failure to comply with the order of 10 February 2020 was serious or significant (stage one of Denton), that there was no good reason for the breach (stage two of Denton), and that in all the circumstances of the case, including presumably the previous history of the proceedings, there was no sufficient reason to grant relief (stage three of Denton). It is no part of this court’s job to second-guess that decision in circumstances where it was not appealed, and Mr Pratt, acting on behalf of G&D, did not invite me to do so. Indeed, he appears to accept that the district judge must have taken the view that there was an inexcusable failure to comply with the court order such that the application for relief from sanctions should be refused.
- The costs awarded in the order dated 12 November 2020 have not yet been paid by G&D. Detailed assessment proceedings are ongoing, but Mr Williams confirms in his statement that there has been no offer in respect of those costs and no payment on account. I note, however, that there is no suggestion that G&D is, in fact, in breach of a court order in relation to these costs.
- Approximately eight months after its relief from sanctions application in the County Court Proceedings was dismissed, G&D commenced four separate adjudications against MCL seeking sums in relation to the three projects identified in the particulars of claim in the County Court Proceedings, including Uxbridge Road. The referral notice in the adjudication in relation to the Uxbridge Road project (referred to in the Part 8 claim as ‘Adjudication 2’) dated 9 June 2021, claims circa £39,000, and states that the dispute referred is “in respect of MCL’s failure to properly pay the G&D account in respect of sums that G&D asserts that it is owed relating to its final account.”
- MCL participated in the adjudication without prejudice to its primary contention that the adjudicator did not have jurisdiction to hear it, and that the adjudication and any subsequent enforcement would circumvent and undermine the sanction imposed by the County Court.
- By his decision dated 23 July 2021, the adjudicator, Mr Haque, awarded G&D £35,218 exclusive of VAT, together with interest of £7,994.65 and £100 compensation. He required MCL to pay his fees in the sum of £7,800. It is this decision that G&D seeks to enforce by way of their application for summary judgment today.
- MCL made an application for an injunction on 23 June 2021 to restrain G&D from proceeding to bring adjudication proceedings in respect of the claims which had been the subject matter of the County Court Proceedings. It asserted, amongst other things, that all of the ongoing adjudications, including Adjudication 2 relating to Uxbridge Road, were unreasonable and oppressive in circumstances where they raised issues which were materially the same as the issues that had been raised in the County Court Proceedings.
- On 29 June 2021, MCL’s application was heard by O’Farrell J, who dismissed it on various grounds, her first being that:
”It is correct that in so far as the adjudications trespass on a decision that has already been made by the court, that effectively prevents the current adjudicator from having jurisdiction to determine the disputes. However, that is a matter that can and should be dealt with at the enforcement stage, as explained by Lord Briggs in Bresco v Lonsdale (above) at .”
- In relation to a submission that the adjudications had only been commenced because G&D had made a mess of the earlier litigation in the County Court, O’Farrell J said that while the point may be well made on the evidence before her:
”…the mere fact that a claim has been struck out does not necessarily preclude a claimant from then re-litigating. It all depends on the circumstances: Hall v The Ministry of Defence  EWHC 4092 QB, and Davies v Carillion Energy Services Limited & Another  EWHC 3206 QB.”
I shall return to those cases in a moment when I come to consider the relevant principles.
- During the course of his submissions Mr Woolgar, acting on behalf of MCL, pointed out that the circumstances of the application before O’Farrell J were very different from the application that I have before me today. She was being asked to exercise a different jurisdiction, and her reluctance to interfere with the adjudication should be seen in that context. It should also be seen against the background of the recent decision of the Supreme Court in Bresco, to which she expressly referred. Whilst the submissions that appear to have been made to O’Farrell J on the part of MCL (which was not represented at that hearing by Mr Woolgar) were focused on the fact that the County Court Proceedings had determined the dispute and deprived the adjudicator of jurisdiction, it does not appear that any submissions were made of the type now being advanced to the effect that the ultimate enforcement action following success on the part of G&D in the adjudication would be an abuse of process. In any event, says Mr Woolgar, the decision made by O’Farrell J to reject the application for an injunction should not influence the court in dealing with the applications now before it. Mr Woolgar is not now running a jurisdiction argument in relation to the adjudicator.
- During the course of his submissions before me today, Mr Pratt helpfully indicated that he agreed with Mr Woolgar’s analysis, and that he was not going to rely on anything in the decision of O’Farrell J in the context of the matters now before the court.
Applicable Legal Principles
- It is common ground that on an application for summary judgment by a claimant, the court must consider whether the defence has a real prospect of success. I was referred by Mr Pratt to the well known passage at  in the judgment of Lewison J (as he then was) in Easyair Limited v Opal Telecom Limited  EWHC 339 (Ch) for the relevant principles. Mr Pratt relied in particular upon paragraph 15(vii) to the effect that where an application under CPR Part 24 gives rise to a short point of law, the court should determine it if it is satisfied that it has before it all the evidence necessary for a proper determination of the question. Mr Pratt’s submission was that there is no dispute between the parties on the relevant facts and no reason in this case that the court should not grasp the nettle.
- Here the defence is that the Enforcement Proceedings themselves are an abuse of process and should be struck out pursuant to CPR 3.4(2)(b). Mr Woolgar very fairly accepts that if he cannot establish an abuse, the burden being on MCL to do so, then the correct order today would be an order enforcing the adjudicator’s award, subject to his submission that any such enforcement should be stayed pending payment of MCL’s costs in the County Court Proceedings.
- In support of his submission that a second action may be struck out as an abuse of process in circumstances where a first action has been struck out on procedural grounds, Mr Woolgar took me with some care through a number of authorities. There was no dispute between the parties as to the principles to be drawn from the authorities, and in the circumstances I do not need to deal with them in any great detail. By way of preliminary comment, I note that the authorities inevitably all turn on their very specific facts.
- Whether a second action is an abuse of process is not a question of discretion but an evaluative assessment to which there can be only one answer. If it is an abuse, the court has a discretion whether to strike it out, but, once satisfied that the second action is an abuse, it is likely that the court will strike it out, although this does not necessarily follow - see Harbour Castle Limited v David Wilson Homes Limited  EWCA Civ 505, per David Richards LJ, at .
- The main principles to be drawn from the authorities as to the question of abuse are to be found in Davies v Carillion Energy Services Limited & Another  1 WLR 1734, one of the authorities referred to by O’Farrell J in her judgment on the injunction application. In Davies, Morris J was concerned with a case in which earlier proceedings brought by the claimant had been struck out for failure to comply with an unless order. It was the defendant’s submission that the second action was an abuse of process. Morris J carried out a detailed analysis of the authorities to which Mr Woolgar has referred me. At  he observed that:
”…the line of cases of Arbuthnot, Securum and Collins are authority for the following:
(1) Where a first action has been struck out as itself being an abuse of process, a second action covering the same subject matter will be struck out as an abuse of process, unless there is special reason: Securum §34, citing Arbuthnot, and Aktas §§48, 52.
(2) In this context abuse of process in the first action comprises: intentional and contumelious conduct; or want of prosecution; or wholesale disregard of rules of court: Aktas §§72 and 90.
(3) Where the first action has been struck out in circumstances which cannot be characterised as an abuse of process, the second action may be struck out as an abuse of process, absent special reason. However in such a case it is necessary to consider the particular circumstances in which the first action was struck out. At the very least, for the second action to constitute an abuse, the conduct in the first action must have been ‘inexcusable’. Collins §§24-25 and Cranway §20.”
At  Morris J went on to conclude as follows:
“(1) Where a first action has been struck out for procedural failure, the Court should apply the Securum/Collins approach I set out in paragraph 52 above. Even if Aldi and Stuart state general principles which are now applicable to all categories of abuse of process, I am not satisfied that there is any case authority which has specifically disapproved of the detailed analysis in Securum, Collins and Aktas of cases of procedural failure. Indeed Securum and Collins were not considered in either Johnson or Aldi . In Aktas, Rix LJ did not indicate disapproval of Securum.
(2) However given the introduction, since those cases, of amendments to CPR 1.1 and given developments in Mitchell and Denton, the ‘special reason’ exception identified in Securum and Collins falls to be more narrowly circumscribed. Where the conduct of the first action has been found to have been an abuse of process or otherwise inexcusable, then the second action will be struck out as an abuse of process, save in ‘very unusual circumstances’. (Other terminology might equally be used to indicate this strict approach). In addition, in a case where the first action was not itself an abuse of process, whether the conduct in that action was ‘inexcusable’ might fall to be assessed more rigorously and in the defendant’s favour. However, even post-Jackson, ultimately, the importance of the efficient use of resources does not, in my judgment, trump the overriding need to do justice: see Aktas §92.
(3) A single failure to comply with an unless order is not, of itself , sufficient to conclude that the second action is an abuse of process.”
On the very particular facts of that case Morris J declined to strike out the second action.
- In so far as Morris J referred in Davies to a “special reason”, that is not a term of art but is:
”…merely an attractive form of shorthand which encapsulates the broad approach to the decision making process to be adopted when an action has failed as a result of an abuse of process and the court is considering whether a second action relating to the same issues should be allowed to continue.” (see C v CPS Fuels Limited  EWCA Civ 1597, per Judge LJ at .
- Mr Woolgar also reminded me of the judgment of Chadwick LJ in Securum Finance Limited v Ashton  Ch 291, a case that was referred to in Davies, which was decided just after the CPR came into force. In Securum the Court of Appeal dealt with an application to strike out second proceedings on the grounds of abuse in circumstances where the first action was struck out for delay. At paragraph 28 Chadwick LJ dealt with the new climate in litigation ushered in by the CPR, referring to the judgment of the Court of Appeal in Arbuthnot Latham Bank Limited v Trafalgar Holdings Limited  1 WLR 1426 (which had specifically focused on the future of litigation) as follows:
”It is therefore in the interests of litigants as a whole, that the court’s time is not unnecessarily absorbed in dealing with the satellite litigation which non-compliance with the timetables laid down in the rules creates …The existing rules contain time limits which are designed to achieve the disposal of litigation within a reasonable time scale. Those rules should be observed.”
At paragraph 30 in the same judgment Chadwick LJ observed that in exercising the power to strike out a case under CPR Rule 3.4(2)(b), the court must seek to give effect to the overriding objective to deal with cases justly, and he noted that dealing with a case justly includes, “allotting to it an appropriate share of the court’s resources while taking into account the need to allot resources to other cases.”
- Finally, I note that in considering whether to strike out a second action on grounds that it is an abuse owing to the conduct of a first action, the stage at which the first action was struck out is of significance - see Lewison J in Cranway Limited v Playtech Limited  EWHC 550 (Pat) at  and  as follows:
”14. The court must, in my view, take a broad view of the reasons why the original action was struck out, the stage at which it was struck out and the consequences of allowing a second action to continue…22. I also bear in mind that the first claim was struck out at a very early stage in its life, indeed before the defendants had put in any defence to the claim. In the Glauser case at paragraph 23 Mance LJ said, ‘It is true that the court’s resources are being taxed twice, but they were taxed relatively little by the first action, and the extra burden imposed on them by a second action can hardly be much greater than the burden which could and would anyway have been imposed if the appellant had managed to get its expert advice and pleading in order.’ That, as I see it, is the position in the present case too.”
- Mr Woolgar does not suggest that the first action in this case was struck out as an abuse of process. However, he contends that it was struck out in circumstances where the conduct of the first action was found to be inexcusable, that in such a case I should adopt a strict approach and that there are no very unusual circumstances or special reasons why G&D’s Enforcement Proceedings should not be struck out as an abuse.
- Mr Pratt rejects this characterisation. In his skeleton argument he appeared to take a preliminary point that the matters being adjudicated are different from the matters in dispute in the County Court Proceedings, but during his oral submissions he very fairly accepted that he could not pursue that point as a defence to the abuse application. As Mr Woolgar rightly said, there was no material difference between the County Court Proceedings on the one hand and the adjudication on the other; both involved claims for a final account of the sum due to G&D from MCL arising out of the same project and both involved seeking to enforce the same contractual obligations. The mathematical discrepancies in the figures identified in the respective claims does not affect this conclusion. There is accordingly no dispute that the Enforcement Proceedings involve a claim for summary judgment in respect of the same cause of action that was before the Portsmouth County Court.
Was the conduct of the County Court Proceedings inexcusable?
- In light of the principles to be drawn from the authorities to which I have been referred, I must consider whether it is an abuse of process in these Enforcement Proceedings for G&D to litigate the same issues which were raised, but not adjudicated upon, in the County Court Proceedings. If the answer to that question is yes, then I must determine whether, in the exercise of my discretion, I should nevertheless allow the Enforcement Proceedings to continue.
- Turning to the first question, I have concluded that it is an abuse of process in these Enforcement Proceedings for G&D to litigate the same issues that were raised in the County Court Proceedings. My reasons are as follows:
(1) The strike out for failing to seek further directions by 21 June 2020, whilst in itself perhaps not arising out of the most serious of breaches, appears to have been imposed following a number of earlier procedural defaults by G&D. It can only be assumed that the judge who made the order on 10 February 2020 had these defaults in mind in imposing such a serious sanction.
(2) In particular, the claim had been struck out twice before, and it had been necessary for G&D to seek relief from sanctions in respect of the second occasion. Against that background, it is not now possible for the court to take a benevolent or indulgent view of G&D’s failure to comply with the order of 10 February 2020.
(3) The application for relief from sanctions in respect of the strike out on 21 June 2020 failed. Mr Pratt suggested in his skeleton that on the strength of Davies (in which he submitted that the court had found that a failure to apply for relief from sanctions would not be sufficient to render a claimant’s conduct inexcusable) it must follow that an application for relief from sanctions which is refused does not render a subsequent claim an abuse of process. However, I disagree. It is clear from paragraph 70 of the judgment in Davies that Morris J thought that a failure to apply for relief from sanctions would fall for consideration at the later stage of considering whether there were any very unusual circumstances to be brought into account. Further, it is also clear that he took the view that in an ordinary case, the failure to apply for such relief might well be good evidence that there were no such unusual circumstances that would militate against a strike out. I did not understand Mr Pratt to maintain the argument set out in his written skeleton during his oral submissions in the face of Mr Woolgar’s submissions as to the true effect of paragraph 70 of Morris J’s decision in Davies.
(4) As Mr Woolgar submitted, and as Mr Pratt accepted must be inferred, the very fact that G&D was unsuccessful in applying for relief from sanctions means that (i) its particular failure to comply with the order of 10 February 2020 was judged by the court to be serious or significant; (ii) there was judged to be no good reason for such failure and it was in that sense “inexcusable”; and (iii) in all the circumstances of the case, taking into account all the prior procedural breaches and failings of G&D, there was no sufficient reason to grant relief.
(5) I therefore accept that this is a case where the conduct of the first action was found to be inexcusable, and that in such a case I must adopt a strict approach and exercise my discretion to strike out the second action save in very unusual circumstances. The fact that this conduct may not have been intentional (and it seems clear from the evidence filed by G&D’s former solicitors in the County Court Proceedings that it was not intentional) does not mean that there is a good explanation for it, or that the failures were somehow excusable. Equally, the fact that G&D was heavily reliant upon its solicitors, and that it was those solicitors who appear to have acted negligently in dealing with the County Court Proceedings, does not affect the position, as Mr Pratt accepted.
- I turn then to the exercise of my discretion, and in particular to the question of whether there are any unusual circumstances in this case which militate against a strike out. I note as an aside that the point I made at the outset of this judgment as to this case being unusual in the context of TCC enforcement actions does not seem to me to be in itself an unusual circumstance for the purpose of the exercise of my discretion.
- In contrast to the facts of Cranway, the first action here (i.e. the County Court Proceedings) was struck out more than three years after it had been commenced. In all, something in the region of ten orders had been made by various district judges over that period, pleadings had closed, costs budgets had been agreed, disclosure had been given, witness statements had been exchanged. MCL’s bill of costs amounts to in excess of £30,000, excluding VAT and the costs of assessment. MCL is proceeding with a detailed assessment of those costs. The resources of the County Court have been (and are being) taxed by the County Court Proceedings to a considerable extent and over a long period of time.
- Mr Pratt submitted that there were a number of factors to which I should have regard in the exercise of my discretion which weighed in his favour.
(i) First, he submitted that I should have regard to the fact that G&D’s solicitors appear to be to blame for the situation in which it finds itself.
(ii) Second, he submitted that the outcome of the adjudication had established that G&D were in fact entitled to a substantial sum of money from MCL.
(iii) Third, he submitted that the very nature of enforcement proceedings following an adjudication means that the court will be inherently unwilling to strike them out, and that I should be slow to overturn the established order of things.
- I have weighed these factors carefully in the balance, but I do not consider that they give rise to unusual circumstances such that I should permit the Enforcement Proceedings to continue. Standing back, I also do not regard these factors as sufficient to justify the continuation of the Enforcement Proceedings in the interests of justice, particularly having regard to the points I have already made about the extent to which the scarce resources of the County Court were utilised during the County Court Proceedings.
- Taking Mr Pratt’s factors in turn: as to his first point, whilst I sympathise with G&D’s perception that they have been badly let down by the conduct of their then solicitors, I do not regard that as an unusual circumstance or a basis on which to exercise my discretion in the interests of justice to permit the Enforcement Proceedings to continue. No doubt many cases in which a first action has been struck out for procedural abuse will involve the negligence of the legal representatives involved, but (insofar as G&D can establish negligence in this case) it will have a means of redress against those legal representatives. I do not see why MCL should be subjected to a second action merely because solicitors have been negligent in the first action where the position would otherwise be that the second action would be struck out.
- As to the second point, it is of course true that I am in a rather unusual position in dealing with this application, in the sense that (unlike the conventional position in court where an attempt is made to pursue a second action following the strike out of a first action) the adjudication has already been litigated and the adjudicator has already arrived at an award in G&D’s favour. It is not difficult to see how a refusal to enforce the adjudication award in such circumstances causes prejudice to G&D – it would have the effect of granting a windfall to MCL in the sense that G&D will be deprived of recovering the sum awarded by the adjudicator. This fact will of course, rather serendipitously, as Mr Woolgar submits, enable G&D to prove its claim (certainly as to quantum) against its former solicitors rather more easily than might otherwise have been the case, but that seems to me to be a rather peripheral point.
- However, in my judgment, G&D should not be able to put itself in a better position than it would have been in if it had sought to bring a second set of proceedings in court simply by resorting to a procedure that would not be open to the majority of litigants. If its second bite of the cherry had been by way of litigation it would not have been able to rely on the fact that its claim had already been determined, and I do not see why the fact that it has been able to take advantage of the Scheme under the 1996 Act should put it in a better position than the average litigant. Put another way, I do not see why enforcement proceedings following an adjudication should be subject to more sympathetic treatment than would have been the case in a second action before the court. It is only because of the very unusual route that G&D has taken in litigating this claim that it is able to come back before the court and rely on an existing award in the adjudication by way of prejudice.
- Finally, as to the third point, although I have already acknowledged the very particular nature of Enforcement Proceedings following an adjudication, it does not seem to me on the facts of this case that their particular nature militates in favour of a finding of unusual circumstances such that I should refuse to grant MCL’s application. It is true that the court will not be troubled with this action beyond today owing to the fact that an enforcement action would ordinarily involve only one hearing at which summary judgment would be granted. Accordingly no further court resources will be consumed by the Enforcement Proceedings. However that must be weighed in the balance against the circumstances of the abortive first action, the extent to which the County Court’s resources were committed to that action and the time period over which that action continued, together with the costs incurred by MCL in defending that action. Having regard to these factors (which I have set out in detail above), I do not consider that it is in the interests of justice or in accordance with the overriding objective to permit the Enforcement Proceedings to continue.
- Further, and in any event, I accept Mr Woolgar’s submission that if the Enforcement Proceedings are an abuse of process (as I have found that they are) then they have always been an abuse of process from the moment of their inception. The Enforcement Proceedings have not become abusive as of today and the parties should not be here at all. Of course this potentially calls into question whether the adjudication was itself an exercise in futility. However, the considerations identified in Bresco by Lord Briggs at paragraphs 59-67 appear to me to dispose of that point: there was potentially utility in G&D exercising its statutory and contractual right to pursue adjudication as a means of achieving resolution of a dispute (as indeed O’Farrell J recognised at the injunction stage). MCL might have prevailed in the adjudication thereby rendering the Enforcement Proceedings unnecessary and, in any event, dispute resolution by means of adjudication is, as Lord Briggs said at  “an end in its own right, even where summary enforcement may be inappropriate or for some reason unavailable”.
- In all the circumstances, I am going to exercise my discretion to strike out G&D’s claim for enforcement.