Multiconcept Developments Ltd v Abacus (CI) Ltd
Technology and Construction Court
His Honour Judge David Wilcox
22 March 2002
The adjudicator decided that the employer should pay the contractor the amount certified on the ground that the employer failed to serve any notice of intention to withhold payment under section 111 of the Construction Act 1996. The contract administrator produced a final certificate showing that there was a sum due to the employer by way of repayment which exceeded the sum awarded to the contractor. The employer did not oppose the decision being enforced by way of summary judgment but contended that execution of the judgment should be stayed.
Judge Wilcox held that execution should not be stayed on the basis that there were no special circumstances justifying a stay. The employer contended that (1) there was a valid and much larger claim of the employer which was still to be determined (2) the regime of payment under the JCT contract had already provided the contractor with reasonable cash flow (3) the contractor’s accounts showed that it had substantial indebtedness to others so that there was a real risk that it would be unable to repay the judgment sum if and when ordered to do so and (4) the adjudicator’s award did not result from any consideration of the merits of the contractor’s claim.
Judge Wilcox rejected these submissions because (1) the accounting evidence before the court was far from satisfactory but it appeared from that evidence that there was no basis on which the court could properly conclude that there was a real risk that the contractor would not be able to repay the judgment sum (2) even though the adjudicator’s award did not result from any consideration of the merits, this was (simply) one possible valid consideration amongst all the other considerations and could not be determinative and (3) even if the employer’s claim based on the final certificate showed the employer’s entitlement to be greater after taking the amount of the adjudicator’s award into consideration, the object of the statutory adjudication scheme was to ensure proper cashflow through speedy payment until the final resolution of the dispute by court or arbitration proceedings.
The courts will look at all the circumstances of the case before deciding whether execution of a summary judgment enforcing an adjudicator’s decision will be stayed but will not order a stay unless there is very good reason to do so.