Cases - Wimbledon Construction Company 2000 Ltd v Derek Vago
Record details
- Name
- Wimbledon Construction Company 2000 Ltd v Derek Vago
- Date
- [2005]
- Citation
- BLR 374
- Legislation
- Keywords
- Adjudication - construction contract - stay of execution - principles of adjudication - insolvency - inability to pay - change in financial circumstances
- Summary
-
In this case the judge reviewed the previous authorities and summarised the applicable principles as follows:
'a) Adjudication (whether pursuant to the 1996 Act or the consequential amendments to the standard forms of building and engineering contracts) is designed to be a quick and inexpensive method of arriving at a temporary result in a construction dispute.
b) In consequence, adjudicators' decisions are intended to be enforced summarily and the claimant (being the successful party in the adjudication) should not generally be kept out of its money.
c) In an application to stay the execution of summary judgment arising out of an Adjudicator's decision, the Court must exercise its discretion under [RSC] Order 47 with considerations a) and b) firmly in mind (see AWG).
d) The probable inability of the claimant to repay the judgment sum (awarded by the Adjudicator and enforced by way of summary judgment) at the end of the substantive trial, or arbitration hearing, may constitute special circumstances within the meaning of Order 47 rule 1(1)(a) rendering it appropriate to grant a stay (see Herschel).
e) If the claimant is in insolvent liquidation, or there is no dispute on the evidence that the claimant is insolvent, then a stay of execution will usually be granted (see Bouygues and Rainford House).
f) Even if the evidence of the claimant's present financial position suggested that it is probable that it would be unable to repay the judgment sum when it fell due, that would not usually justify the grant of a stay if:
(i) the claimant's financial position is the same or similar to its financial position at the time that the relevant contract was made (see Herschel); or
(ii) the claimant's financial position is due, either wholly, or in significant part, to the defendant's failure to pay those sums which were awarded by the adjudicator (see Absolute Rentals).'
Applying these principles to the facts of the case the judge concluded that the defendant had not demonstrated that the claimant would be unable to pay the sums back in any future arbitration and that in any event the claimant's financial position had significantly changed from the date on which it was made, and further that any financial problems of the claimant being relied upon by the defendant were largely the defendant's own fault by failing to pay the sums eventually awarded by the adjudicator.