Malin Industrial Concrete Floors Limited (in administration) v Volkerfitzpatrick Limited
[2024] EWHC 2890 (TCC)
WRB (N.I.) Limited v Henry Construction Projects Limited
10 February 2023
[2023] EWHC 278 (TCC)
High Court
A company (WRB) won a payment dispute against another (Henry) through a quick court process. Even though WRB might not be able to pay Henry back if Henry wins later, the judge said Henry knew WRB was risky when they made the deal, so Henry has to pay WRB now.
Key Facts
- •WRB (NI) Limited (WRB) sought to enforce an adjudicator's decision against Henry Construction Projects Limited (Henry Construction) for payment under a sub-contract.
- •WRB is a dormant company and disputes being a party to the sub-contract, with Henry Construction contending otherwise.
- •A prior adjudication determined that WRB was the party to the sub-contract.
- •The adjudicator awarded WRB £120,752.14 plus interest and adjudicator's fees.
- •Henry Construction disputed the sum and sought a stay of execution.
- •Henry Construction claims cross-claims totaling £754,495.72.
- •WRB's financial standing is questionable, raising concerns about repayment.
Legal Principles
Adjudication provides temporary finality; 'pay now, argue later'.
General principle of construction adjudication
Court may stay execution of judgment if 'special circumstances' render enforcement inexpedient.
CPR 1998, Rule 83.7(4)(a)
Factors to consider when deciding on a stay of execution in adjudication cases (including claimant's ability to repay, claimant's financial position at the time of contract, and whether defendant's actions contributed to claimant's financial position).
Wimbledon Construction Company 2000 Ltd v. Vago [2005] EWHC 1086 (TCC)
Entering into a contract with a company of uncertain financial status does not automatically justify a stay of execution.
Herschell Engineering Ltd v. Breen Property Ltd
Unchanged financial position of claimant since the contract does not usually justify a stay.
Granada Architectural Glazing Ltd v. PGB P&C Ltd [2019] EWHC 3296 (TCC)
Dormant status of claimant at the time of contract and enforcement proceedings does not automatically justify a stay, particularly if the defendant was aware of this status and chose to contract with the claimant anyway.
Westshield Civil Engineering Limited v. Buckingham Group Contracting Limited [2013] EWHC 1825 (TCC)
Outcomes
Summary judgment granted for WRB for £139,799.20.
Claim for additional fees and expenses was excluded due to procedural issues. Claim for VAT was dismissed due to lack of evidence.
Application for a stay of execution dismissed.
Henry Construction's choice to contract with a dormant company, its resistance to arguments regarding the true subcontractor, and sufficient time to pursue cross-claims outweighed the risk of non-repayment by WRB. The court found that the risk was a consequence of Henry Construction's choices.