Key Facts
- •Malin Industrial Concrete Floors Limited (in administration) sought to enforce a construction adjudication decision against VolkerFitzpatrick Limited for £59,950 plus interest and VAT.
- •VolkerFitzpatrick opposed enforcement, citing a substantial cross-claim due to alleged defective flooring and Malin's insolvency.
- •The adjudicator found in favor of Malin, stating that VolkerFitzpatrick failed to provide evidence supporting its counterclaims.
- •The court considered whether to grant summary judgment despite Malin's insolvency and the existence of a potential cross-claim.
Legal Principles
The court has discretion to grant enforcement of adjudication decisions, even in insolvency cases, potentially with a stay of execution.
Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25; Bouygues v Dahl-Jensen [2001] 1 All ER (Comm) 1041
A cross-claim must be more than shadowy or barely arguable to prevent summary judgment.
Swissport (UK) Ltd v Aer Lingus Ltd [2007] EWHC 1089 (Ch)
Enforcement of adjudication awards should give way to insolvency regimes when there's tension between the two. This can occur through statutory set-off or where enforcement would deprive the defendant of security for a cross-claim.
JA Ball Ltd (in administration) v St Philips Homes (Courthaulds) Ltd [2022] EWHC 3690 (TCC)
In insolvency cases, the court considers whether there's a positive balance owing to the claimant and if the defendant is deprived of security for its cross-claim.
John Doyle Construction Ltd v Erith Contractors Ltd [2021] EWCA Civ 1452
The court may refuse summary judgment or grant it with a stay to address difficulties in insolvency set-off.
Bouygues v Dahl-Jensen [2001] 1 All ER (Comm) 1041
Outcomes
Summary judgment granted, but stayed pending further order.
While the court found a sufficient potential for a substantial cross-claim and acknowledged the risk of depriving the defendant of security, it also considered the need to avoid encouraging tactical use of insolvency to avoid payments. A stay was implemented to allow the defendant to demonstrate a prima facie case for its cross-claim within three months.