Sutton Services Ltd v Vaughan Engineering Services Ltd (NI, QBD - 20.5.2013)

Sutton Services Ltd v Vaughan Engineering Services Ltd (NI, QBD - 20.5.2013)

There should be a stay of execution of the judgment entered to enforce the adjudication on conditions in the light of the plaintiff’s probable inability to repay the judgment sum and the unclear nature of its insurance position
 

SUTTON SERVICES LTD v VAUGHAN ENGINEERING SERVICES LTD

Northern Ireland, High Court, Queen’s Bench Division

Weatherup J

20th May 2013

The adjudicator awarded the plaintiff some £350,000 in respect of water treatment contract works at a hospital. The plaintiff brought enforcement proceedings. The defendant, having submitted to judgment expressed its intention to begin court or arbitration proceedings against the plaintiff for defective work and concern that the plaintiff, having received the judgment sum, would be unable to repay the defendant that sum if the proceedings which it intended to bring resulted in a sum due to it. The plaintiff held professional indemnity insurance. The defendant’s solicitors requested (i) copies of the public liability policy and certificate of insurance and the correspondence with the insurer and its loss adjusters in which they purported to give the indemnity on the ground that it was not apparent why any claim would be considered to be a public liability claim (ii) a copy of the proposal form for the professional indemnity and (iii) evidence that the plaintiff had insurance cover under the two policies which was applicable at the relevant dates.

 

Weatherup made findings that (i) The defendant had raised reasonable grounds for concern about the plaintiff's ability to repay if the defendant brought a successful claim against the plaintiff and (ii) The defendant's responses did not remove the reasonable grounds for concern about the plaintiff's finances. In particular the judge found that the application of a relevant insurance policy to cover the plaintiff's potential liability to the defendant had not been established because (i) The indemnity offered under the policy was stated to be in relation to the circumstances notified but it was not clear what the circumstances notified might be (ii) The entitlement under the policy was subject to the terms and conditions of the policy and it was not clear what the impact of the terms and conditions might be and (iii) There had been an issue as to whether the policy applied at the relevant time for the purposes of the defendant's claim. He held in the light of these findings that there should be a stay of execution of the judgment entered to enforce the adjudication on conditions as to payment and as to the progress of the defendant's proposed claim in the light of the plaintiff’s probable inability to repay the judgment sum and the unclear nature of its insurance position.

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