WRB (N.I.) Limited v Henry Construction Projects Limited
[2023] EWHC 278 (TCC)
Malin Industrial Concrete Floors Limited (in administration) v Volkerfitzpatrick Limited
22 October 2024
[2024] EWHC 2890 (TCC)
High Court
A company owed money after a construction project but was in financial trouble. The other company argued they shouldn't have to pay because of problems with the work. The judge said they had to pay but could challenge the amount later if they could show strong evidence of problems with the original work. This allows them to get the money while preventing unfairness to the company in financial trouble.
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.