Rodgers Contracts (Ballynahinch) Ltd V Merex Construction Ltd
RODGERS CONTRACTS (BALLYNAHINCH) LTD V MEREX CONSTRUCTION LTD
Northern Ireland, High Court, Queen’s Bench Division
19th November 2012
Weatherup J held that summary judgment should be entered for the plaintiff for the sum awarded by the adjudicator with a stay of enforcement of the judgment sum on condition that that sum should be paid into court within 21 days. In addition he ordered that the parties should have leave to apply for removal of the stay and payment out as appropriate in light of the award in the arbitration proceedings brought by the defendant to finally resolve the dispute referred.
The plaintiff was in financial difficulties and would probably be unable to repay the money if it was unsuccessful in the arbitration. In such circumstances a stay of enforcement would usually be granted. The circumstances in which a stay would not usually be granted did not arise, namely that the plaintiff's financial position was not as it was at the time that the contract was entered into and was not due in any significant part to the defendant’s failure to pay the sum awarded. The court was not in a position to assess the merits of the dispute between the parties save to recognise that each party may have a reasonable prospect of success. The final outcome of the dispute referred would be decided in a matter of weeks in the arbitration begun by the defendant.
Whilst the defendant relied on the decision of Akenhead J in London Borough of Camden v Makers UK Ltd (2009) in support of a stay without terms, there was the added ingredient in the instant case to the circumstances in that case that the defendant also had financial difficulties. In the light of the both parties’ financial difficulties, there would be prejudice to the defendant if the money was paid to the plaintiff but the defendant was successful in the arbitration and the plaintiff was unable to repay it and to the plaintiff if the money was not paid to it and it was successful in the arbitration but the defendant was unable to pay it. The defendant’s application to have the money paid into court was not a tactical step in the action but was instead was a protective step to secure the payment of the sum awarded to whichever of the parties was ultimately found in the arbitration proceedings brought by the defendant to be entitled to the money.