Key Facts
- •Alun Griffiths (Contractors) Limited (Claimant) sought summary judgment against Carmarthenshire County Council (Defendant) for £3,316,487.55 to enforce an adjudicator's decision.
- •The claim arose from civil engineering work on the A48.
- •The Council did not dispute the adjudicator's decision but sought a stay of execution due to the Claimant's insolvency and concerns about the adequacy of a parent company guarantee.
- •Alun Griffiths is a subsidiary of Tarmac Holdings Limited, which is owned by CRH plc.
- •Alun Griffiths' accounts showed significant losses and balance sheet insolvency.
- •Tarmac Holdings Limited provided a guarantee, but the Council questioned its adequacy.
- •The Council's forensic accountant initially misstated Tarmac's solvency, but corrected the error.
- •The Council argued Tarmac's significant net current liabilities indicated cashflow insolvency, despite its positive net asset position.
- •Alun Griffiths' forensic accountant countered with evidence of CRH plc's strong financial health.
Legal Principles
The court may stay execution of a judgment if there are 'special circumstances which render it inexpedient to enforce the judgment'.
Civil Procedure Rules 1998, Rule 83.7(4)(a)
Principles regarding stays of execution of summary judgment arising from adjudicator's decisions, including the consideration of claimant's solvency and the possibility of a bond or guarantee.
Wimbledon Construction Company 2000 Ltd v. Vago [2005] EWHC 1086 (TCC)
A bond or guarantee can defeat a stay application based on solvency concerns.
FG Skerritt Ltd v Caledonian Building Systems Ltd [2013] EWHC 1898 (TCC)
Indemnity costs are appropriate only where the conduct of a paying party is unreasonable to a high degree.
Elvanite Full Circle Ltd v. AMEC Earth & Environmental (UK) Ltd [2012] EWHC 1643 (TCC)
Court considers conduct of parties before and during proceedings when deciding on costs.
Civil Procedure Rules 1998, Rules 44.2(4)-(5)
Outcomes
Summary judgment granted to Alun Griffiths.
The Council did not dispute the adjudicator's decision.
Stay of execution denied.
Tarmac's guarantee, despite concerns about Tarmac's cashflow, adequately protects the Council's position given Tarmac's substantial net asset position and CRH plc's strong financial health. The Council's concerns were deemed unfounded.
Council ordered to pay Alun Griffiths' costs.
The Council's application for a stay was without merit, and its actions regarding the guarantee were deemed unreasonably obstructive.
Council's costs of the stay application assessed on the indemnity basis; other costs assessed on the standard basis.
Council's actions regarding the stay application were unreasonable to a high degree.