England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		28th September 2009

Mr Justice Coulson :

I. Introduction

1. By proceedings commenced on 20^th August 2009 (Claim No 6411), JPA Design and Build Limited, whom I shall call JPA, seek to enforce an adjudicator's decision in their favour in the sum of £300,000, together with interest. This was one of the very first claim forms issued electronically in any part of the Queen's Bench Division.
2. Pursuant to a separate claim form issued on 2^nd September 2009 (Claim No 6847), Sentosa seek a declaration that another adjudicator's award, this time in their favour and in the sum of £180,000, should be declared to be an enforceable decision, entitling them to set off the £180,000 against the £300,000 claimed by JPA. In addition, Sentosa contend that, whether the sum due to JPA is £300,000 or, on their case, £120,000, enforcement of any such judgment should be stayed pursuant to RSC Order 47. Although the issues are chiefly unremarkable, Mr Jinadu, on behalf of Sentosa, has raised one novel issue in connection with the claim for a stay of execution, arising out of JPA's contractual obligation to repay the £300,000. That point is dealt with in Section 13 below.
3. The hearing on 16^th September 2009 involved 3 full lever arch files of material and exceeded its 2 hour time estimate. As a result there was no time for me to give an ex tempore judgment. The draft judgment was provided to the parties on Monday 21^st September in order for them to provide the court with a list of corrections. It is handed down in final form today, Monday 28^th September 2009.
4. The structure of this judgment is as follows. In Section 2, I deal with the terms of the contract. In Section 3, I provide a short chronology: although this has been largely abstracted from the relevant documents, I am grateful to Mr Jinadu for his assistance in relation to certain aspects of the history of these disputes. At Section 4, I set out the details of the adjudication decision relied on by JPA and, at Section 5, I do the same in relation to the adjudication decision relied on by Sentosa. At Section 6, there is a summary of the issues. Thereafter, at Sections 7 to 13 inclusive, I analyse those issues and set out my conclusions. There is a short summary of those conclusions at Section 14.

2. The Contract

5. By a written contract dated 19^th September 2007, Sentosa engaged JPA to carry out the design and construction of a new medical centre at 941, Great West Road, Brentford. The contract was in the JCT Design and Build Form, 2005 edition, 2007 revision. The contract included detailed adjudication provisions.
6. Clause 4.6 of the contract provided that Sentosa would make an Advance Payment to JPA. The sum stipulated was £300,000. The contract provided the sum would be paid on 7^th October 2007 "and will be reimbursed to the Employer at the time of the agreement of the Final Account as calculated in accordance with Clause 4.12."
7. The contract also contained the usual provisions as to completion by the agreed date; the possibility that JPA might be able to claim extensions of time in certain circumstances if the contract was delayed; and provisions relating both to the payment of loss and expense to JPA in certain circumstances, and the payment to Sentosa of liquidated and ascertained damages if there was a period of culpable delay in respect of which JPA was not entitled to an extension of time.

3. A Short Chronology

8. Following the agreement of the contract, JPA were asked to provide a breakdown of their start-up costs for the purposes of the Advance Payment. On 27^th September 2007 they sent to Tweeds, Sentosa's project quantity surveyors, a breakdown of those costs in the sum of £252,000, which, as they acknowledged in the covering e-mail, was a little less than the £300,000 that had been identified in the contract. The £252,000 was paid by Sentosa as soon as it was invoiced. However, contrary to the mechanism in the JCT contract (which envisaged the reimbursement of the Advance Payment at the Final Account stage), the £252,000 was then deducted by Tweeds from JPA's Interim Valuation 2 in November 2007. JPA did not, however, make any complaint about this at the time.
9. For the next year, the project progressed on site and the relationship between JPA and Sentosa appears to have been quite good. At no time until November 2008 did JPA make the point that, pursuant to the contract, the £252,000 had been reimbursed too soon. However on 25^th November 2008, out of the blue, JPA claimed the sum of £300,000 in accordance with the contract. Although Mr Wygas argued that this claim was the indirect result of a shortfall in the interim payments being made by Sentosa, there is no evidence of that, and it was not a matter which was ever referred to adjudication.
10. From November 2008 onwards, the relationship between the parties deteriorated. One of the major disputes between them was JPA's complaint that Sentosa had failed to pay their Interim Valuation No.12 which Tweeds, the quantity surveyors, had valued in the sum of £0. By April 2009 the relationship between the parties had broken down completely and the contract came to an acrimonious end. Each side blames the other for that break-down.
11. As we shall see in a moment, three separate disputes have been referred to adjudication: the claim for the Advance Payment of £300,000 and the dispute about Interim Valuation 12, which were dealt with by Mr Tony Bingham and the subject of his decision dated 23^rd June 2009; and the dispute as to extensions of time, liquidated damages and the like, which was dealt with by Mr Alway, and the subject of his decision dated 3^rd August 2009.
12. Somewhat surprisingly, JPA have not yet put forward any sort of Final Account claim, despite the fact that the contract came to an end almost 6 months ago. Mr Jinadu submits that this amounts to an unacceptable delay on the part of JPA, and points to clause 8.12 of the JCT contract, which provides that, where the contract is terminated in circumstances envisaged by the contract, the contractor has a maximum of two months after the date of termination to prepare such a Final Account. This delay, so it seems to me, is relevant when I come to consider the provisions of clause 4.6 and the repayment of the £300,000.
13. Furthermore, the only substantial Final Account material before the court is the detailed set of documents prepared on behalf of Sentosa, and provided to JPA, which concludes that JPA owe to Sentosa the sum of £200,000 odd. Although there is also a draft final account, prepared for internal purposes by JPA as long ago as March 2009, it is not the subject of any formal claim. And, although it purports to show that, on JPA's analysis, Sentosa owe them the sum of £445,000 odd, Mr Jinadu is, I think, right to say that the Sentosa analysis is not only more up to date, but appears to be rather more comprehensive. Indeed, Mr Duncan, JPA's witness, is at pains to point out in his statement that JPA's internal document is very much a 'work in progress' and is far from complete.

4. Mr Bingham's Decision Of 23^rd June

14. As noted above, there were two aspects of Mr Bingham's adjudication decision dated 23^rd June 2009. First, he concluded that JPA were entitled, pursuant to clause 4.6 of the contract, to immediate payment of the Advance Payment of £300,000, together with interest. It is that aspect of the Decision which JPA now seek to enforce.
15. The other aspect of the dispute dealt with by Mr Bingham concerned Tweeds' valuation of Interim Valuation12 in the sum of £0. JPA contended that, pursuant to Valuation 12, they were in truth entitled to over £400,000.^[1] Mr Bingham concluded that Tweeds' approach was satisfactory and, in the context of an application for interim payment, "should stand as fair and reasonable". JPA therefore recovered nothing in relation to the claim under Interim Valuation 12.

5. Mr Always's Decision Of 3^rd August

16. The decision of Mr Alway dated 3^rd August 2009 is the subject of Sentosa's separate application. Sentosa had referred to him a dispute in relation to delay and liquidated damages. The referral notice sought a decision as to Sentosa's entitlement to such liquidated damages; it did not seek payment of any sum found due. It is clear from paragraph 6 of Mr Alway's decision that, as one would expect, JPA defended themselves against that claim by setting out their own claim to a full extension of time.
17. Mr Alway dealt carefully with the competing claims and concluded that JPA were entitled to an extension of time. However, the extension that he identified was significantly less than the overall delay to the contract. He consequentially found that Sentosa were entitled to claim liquidated damages for the remaining period of culpable delay. He quantified those liquidated damages in the sum of £180,000.
18. However, he rejected Sentosa's case that they had served a valid withholding notice in relation to the liquidated damages and thus, as he put it at paragraph 66 of his decision, Sentosa "had no right to withhold or deduct monies due to JPA in respect of liquidated damages". He referred back to that paragraph at paragraph 130 of his decision. Thus his conclusions were:

"135. The total liquidated damages is £180,000.

136. Sentosa is not entitled to deduct the sum of £180,000 or any other sum of liquidated damages from JPA.

137. Sentosa is entitled to claim the sum of £180,000 from JPA."

6. The Issues

19. It is accepted by Sentosa that, pursuant to Mr Bingham's decision, JPA are entitled to £300,000 together with interest. The agreed total is £349,784.48. However, they contend that they are entitled to set off against that sum the £180,000 identified as their entitlement to liquidated damages by Mr Alway in the other adjudication. The set off is disputed and is therefore the first issue for me to deal with (Section 7 below).
20. The remaining issues are concerned with the stay of execution sought by Sentosa. Again, there is some measure of common ground. It is accepted that (depending on the outcome of any dispute about the value of the Final Account itself)^[2] the evidence demonstrates that JPA are not in a position to repay the £300,000 when the Final Account comes to be finalised. Thus Sentosa contend that there should be a stay of execution. In answer to that, JPA say that there has been no alteration in their financial position since the commencement of the contract and that, to the extent that there has been a change, it is the result of the non-payment of the £300,000. They therefore say that no stay is appropriate. I deal with those arguments in Sections 10 and 11 below.
21. In addition, there are two other factors in this case which Mr Jinadu submits should lead to the grant of a stay of execution. The first is Sentosa's entitlement to claim £180,000 liquidated damages; if I do not allow Sentosa to set that off against the £300,000, then it is submitted that this entitlement must be given considerable weight when I consider whether or not to grant a stay. I deal with that issue in Section 12 below. Secondly, Mr Jinadu argues that, because the £300,000 is unequivocally due back to Sentosa at the Final Account stage, which arguably should have been resolved by now, the court should stay execution in any event. I deal with that argument at Section 13 below.

7. Can The £180,000 Be Set Off Against The £300,000?

22. The vast majority of the cases dealing with set off against an adjudicator's decision concern the situation where the adjudicator has awarded one side a sum of money but where it is said logically to follow from his decision that the other side would be entitled to a separate sum, often by way of liquidated damages. In Balfour Beatty Construction Limited v Serco Limited [2004] EWHC 3336 (TCC) Jackson J (as he then was) identified the relevant principles as follows:

"a) Where it follows logically from an adjudicator's decision that the employer is entitled to recover a specific sum by way of liquidated and ascertained damages, then the employer may set off that sum against monies payable to the contractor pursuant to the adjudicator's decision, provided the employer has given proper notice (in so far as required).

b) Where the entitlement to liquidated and ascertained damages has not been determined either expressly or impliedly by the adjudicator's decision, then the question whether the employer is entitled to set-off liquidated and ascertained damages against sum awarded by the adjudicator will depend upon the terms of the contract and the circumstances of the case."

23. On the face of it, this case is even stronger than the position postulated at alternative (a) by Jackson J in Balfour Beatty. Not only does it follow logically from an adjudicator's decision that the employer is entitled to recover a specific sum by way of liquidated and ascertained damages, but the second adjudicator, Mr Alway, has decided that there is such an entitlement in clear and unequivocal terms. Thus, in accordance with the authorities, my preliminary conclusion would be that Sentosa can set off the £180,000 against the £300,000 found due by Mr Bingham.
24. Mr Wygas' submission on this issue was two-fold. First, he said that Mr Alway had merely found that Sentosa were entitled to claim the £180,000, and that this was very different to a finding that such a sum was due and owing. He maintained that, now that Sentosa have commenced proceedings in connection with the £180,000, JPA were entitled to defend those proceedings by raising their claim for a full entitlement to an extension of time. Secondly, he submitted that, because the adjudicator had found that Sentosa were not entitled to deduct or withhold the sum of £180,000, they cannot now set it off against the £300,000.
25. I consider Mr Wygas' first point to be misconceived. As I have explained, Mr Alway, the second adjudicator, considered carefully the question of JPA's entitlement to an extension of time. He found that they were entitled to an extension of time, but that there was also a period of culpable delay which generated Sentosa's right to claim the £180,000 liquidated damages. He could not order the immediate payment of that sum because Sentosa had not sought payment in the referral notice; hence the reference to Sentosa's right to claim that amount. Mr Alway's decision is temporarily binding upon all parties and can be enforced by this court. It is not open to JPA to challenge the adjudicator's decision by reference to material or claims (their alleged entitlement to a full extension of time) which the adjudicator has already rejected: see Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93 and the scores of subsequent cases in the same vein.
26. The second submission stems, I think, from a misunderstanding of the nature of Mr Alway's decision. True it is that at paragraphs 66 of his decision, to which he again refers at paragraph 130, the adjudicator concluded that Sentosa were not entitled to "withhold or deduct monies due to JPA in respect to liquidated damages". But that conclusion has to be read in context: it comes at the end of a section in which he has dealt with Sentosa's argument that they served a valid withholding notice. He rejected that part of Sentosa's case. Given that, on the adjudicator's analysis, there was no valid withholding notice, there could be no ability on the part of Sentosa to deduct the £180,000 from sums otherwise due to JPA at the time of the commencement of the adjudication. But this is a different situation. Here, Sentosa are not claiming to be paid the sum of £180,000; they are merely contending that, pursuant to the adjudicator's decision, they are entitled to set off that sum against the £300,000 due pursuant to the decision of Mr Bingham. In my view, there is nothing in Mr Alway's decision which would prohibit any such set-off; neither have any contractual terms been brought to my attention which would or could prohibit that set-off.
27. It is trite law that judgments or orders for payment can be set-off one against the other: see Edwards v Hope [1885] 14 QBD 922, at 926. This has been described as 'a form of equitable jurisdiction possessed by the common law courts for the purpose of preventing absurdity or injustice': see Reid v Cupper [1915] 2 KB 147. There is no reason at all why, on the facts of the present case, the two adjudication decisions should not be set off one against the other in the same way; thus, JPA's entitlement to the £300,000 should be the subject of a set off, in the sum of £180,000, to reflect Sentosa's right to claim £180,000 by way of liquidated damages. Of course, I also consider that such a result is in accordance with Jackson J's test in Balfour Beatty v Serco, for the reasons noted above.
28. Accordingly, I resolve this first issue in favour of Sentosa. Thus, judgment will be entered in JPA's favour in the sum of £169,784.48, being £349,784.48 less £180,000. I now go on to consider the question of a stay of execution.

8. Stay Of Execution/Legal Principles

29. RSC Order 47, preserved in section A of the Civil Procedure Rules 1998, grants the court a wide discretion where there are "special circumstances" which render it inexpedient to enforce that judgment. There have been a number of cases in which an application for a stay of a judgment enforcing an adjudicator's decision, and the particular difficulties that arise in such a situation, have been considered by the courts. Most of these have been concerned with the parlous financial position of the claiming party: see for example Herschel Engineering Ltd v Breen Property Limited No 1 [2000] BLR 272 and No 2, an unreported decision of HHJ Lloyd QC dated 28^th July 2000; Absolute Rentals Ltd v Glencor Enterprises Ltd (28.2.00) CILL July/August 2000; Rainford House Limited v Cadogan Limited [2001] BLR 416; Total M and E Services v ABB Building Technologies Limited [2002] EWHC 248 (TCC); and Wimbledon Construction Co 2000 Limited v Derek Vego [2005] EWHC 1086 (TCC). In the latter case I attempted to summarise the applicable principles as follows:

"In a number of the authorities which I have cited above the point has been made that each case should turn on its own facts. Whilst I respectfully agree with that, it does seem to me that there are a number of clear principles which should always govern the exercise of the court's discretion when it is considering a stay of execution in adjudication enforcement proceedings. Those principles can be set out 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 order 47 with considerations a) and b) firmly in mind (see AWG Construction Services Limited v Rockingham Motor Speedway Limited [2004] EWHC 888 (TCC).

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 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 (Uk) Limited v Dahl-Jensen Limited [2000] BLR 522 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 insignificant part, to the defendants failure to pay those sums which were awarded by the adjudicator (see Absolute Rentals)"

30. As noted above, it is the two possible exceptions to the general rule noted at sub-paragraph (f) above upon which Mr Wygas relies in support of his contention that, notwithstanding JPA's parlous financial position, the stay of execution should not be ordered.

9. JPA's Financial Position

31. As I have said, (subject to the outcome of any dispute as to the value of the Final Account) it is common ground that JPA's current financial position is such that the court must conclude that they would be unable to repay the £300,000. I identify below the aspects of their financial position which I consider to be of particular importance to this application.
32. JPA are a shell company. There is some debate as to whether or not Sentosa were fully aware of the hollowness of that shell when they entered into the contract. It does not appear that they carried out any sort of credit check on JPA. It seems that, if they had done, they would have discovered that, amongst other things, JPA had no fixed assets and, at most, two employees. Their accounts for the period up to 31^st October 2007 (shortly after the contract was let) show a net profit for the year of £53, 237 on a turnover of just under £500,000.
33. JPA's accounts have only just been filed for the year ending the 31^st October 2008. That shows a loss on the year of £307,124 on a turnover of almost £3 million. Within that, the sum falling due to creditors in one year was about £400,000. Although there are no more up-to-date accounts for the period after 31^st October 2008, Mr Duncan of JPA has produced a further analysis which shows that the present position is that creditors are owed around £700,000. I am told that, contrary to Sentosa's pleaded defence, JPA have not ceased trading and they are currently bidding for work, although they have no work on-going.
34. It is also agreed that, in the last year, JPA have become the subject of an unsatisfied County Court judgment in the sum of £47,269. Very recently, another of their unpaid creditors has issued a statutory demand and a winding-up petition. I am told that these will be defended.

10. Has JPA's Financial Position Changed Since The Contract Was Let?

35. It is Mr Wygas' first submission that JPA's financial position is the same as when the contract was let. I certainly accept that some aspects of JPA's financial position remain as they were at the time that the contract was entered into. In particular, JPA was and remain a company with a share capital of one share and a single share holder who is resident overseas. At the time of the contract, Sentosa should have known that JPA represented a greater credit risk than many, perhaps most other, contractors.
36. However I reject the contention that JPA's financial position has not significantly altered during the last two years. Indeed, the accounts which I have summarised above make plain that such a contention is unarguable. At the time of the contract, JPA were making a modest profit on a modest turnover. Since then they have increased their turnover six-fold, but made a significant loss in the year up to 31^st October 2008. Moreover, those losses are set to continue, if not increase, in the current year. There has been a serious and significant deterioration in their financial position. Thus I do not accept that the exception, identified at subparagraph (f)(i) of the extract from Wimbeldon v Vago (set out at paragraph 29 above), is triggered on the facts of this case.

11. Are Sentosa Responsible For JPA's Financial Position?

37. Mr Wygas' second submission is that, to the extent that there has been a change in JPA's financial position, Sentosa were responsible for it, because they did not pay the £300,000, and thus the exception at subparagraph (f)(ii) of the extract from Wimbledon v Vago is engaged. As I pointed out to him during argument, this is not an easy submission for JPA to sustain in circumstances where, for over a year, they did not mention the £300,000 at all, and failed to issue an adjudication claim in relation to that sum until after the underlying contract had been terminated.
38. However, more widely, it seems to me that, for the reasons outlined by Mr Jinadu, the submission cannot be sustained on the evidence. As noted above, the present position is that JPA owe a total of £700,000 to trade creditors (ie not including Sentosa). If they received the £300,000 from Sentosa, then they could reduce that indebtedness to £400,000. But that would not significantly affect their underlying problem: they are and would remain in debt for very large sums. To that extent, therefore, the £300,000, whilst no doubt welcome, would make little difference to their overall position. It certainly cannot be said that the absence of that money has caused their present difficulties. In any event, since the £300,000 must be paid back to Sentosa, the correct analysis must be that, even if the £300,000 was paid out to JPA now, their indebtedness to creditors (including Sentosa) would remain at £700,000^[3].
39. For those reasons, therefore, it seems to me that this exception is not triggered either. That means that, notwithstanding the various principles relating to the enforcement of adjudicator's decisions, the financial position of JPA would justify a stay on the basis of the principles outlined in Herschel v Breen (No 1). However, in this case, I am firmly of the view that there are two further matters which make Sentosa's claim for a stay of execution, whether in relation to £300,000 or the £120,000 (plus interest) that I have found, irresistible.

12. The £180,000

40. If I was wrong to allow Sentosa to set-off the £180,000, so that the judgment sum in favour of JPA should be £349,784.48 and not £169,784.48, it seems to me that Sentosa would have an overwhelming case that the £180,000 ought to be taken into account in the exercise of the court's discretion under RSC Order 47. After all, their entitlement to that sum was the subject of an adjudicator's decision which considered all of the relevant arguments. It would be contrary to common sense for the court to refuse a stay in relation to the £300,000 because it is the subject of an adjudicator's decision, without also having regard to the fact that the £180,000 is itself the subject of a separate adjudicator's decision.
41. Thus, if I am wrong and the judgment sum ought to have been £369,784.48, I would have concluded that the £180,000 itself justified a stay of execution, at least up to that sum, regardless of JPA's financial position.

13. The Relevance Of Clause 4.6

42. Mr Jinadu's final point was that there should be a stay in the present case because the £300,000 is unequivocally due to be paid back to Sentosa at the time of the resolution of the Final Account. He submitted that, but for the unwarranted delays on the part of JPA, the Final Account ought to have been sorted out by now and the £300,000 repaid. He argued that this makes this case different to - and stronger than - those cases in which the court has considered whether or not the existence of a potential cross-claim would make any difference to the enforcement process.
43. An example of the court's approach to a situation where a paying party sought to avoid the consequences of an adjudicator's decision because of its own imminent claim can be seen in the decision of HHJ Toulmin CMG QC in Hillview Industrial Developments (UK) Limited v Botes Building Limited [2006] EWHC 1365 (TCC). In that case Botes were found liable by the adjudicator to Hillview for just under £300,000, but they sought to avoid payment on the basis that they were about to issue legal proceedings in respect of their own final account claim. Judge Toulmin dismissed that approach, saying that the fact that Botes had a separate claim, which was the subject of a future application for summary judgment (which may or may not succeed), could not deprive Hillview of the sum awarded by the adjudicator. Had Botes sought a stay of execution on the same grounds, I have no doubt that that too would have been refused by the judge, and for the same reasons.
44. I accept Mr Jinadu's submissions that clause 4.6 makes this a very different case. The £300,000 found due to JPA in this case, following an adjudication referral not made until after the contract had come to an end, is a sum which JPA are required to pay back to Sentosa when the Final Account is considered and resolved. It is not a claim which may or may not succeed at some point in the future; it is an unquestionable entitlement that Sentosa have and have always had. In my view, the Final Account process should have been completed by now; it certainly should be well underway. Responsibility for the delay would seem to rest with JPA. In those circumstances, the £300,000 must be treated as being imminently repayable to Sentosa in any event. Certainly, JPA cannot rely on their own delays in making a Final Account claim in order to put themselves in a better position in respect of the £300,000.
45. In my view, it would be wholly unjust and inequitable for Sentosa to pay the £300,000 plus interest (or, on my analysis, the net sum of £120,000 plus interest), particularly in circumstances where there is an overwhelming risk that they will not be reimbursed that sum by JPA in accordance with clause 4.6 of the contract. JPA's position is fundamentally flawed because it is seeking to look at one side of the balance sheet only, and to ignore Sentosa's equal and equivalent right on the other side of that balance sheet for the imminent return of the same sum of money.
46. Accordingly, given JPA's dreadful financial position and Sentosa's contractual right to repayment, I consider that it would be wholly unjust and inequitable if the judgment sum was not the subject of a stay of execution.

15. SUMMARY

47. For the reasons set out in Section 7 above, I have concluded that Sentosa are entitled to set-off against the £349,784.48, the sum of £180,000 which was the subject of the second adjudication decision. Thus judgment will be entered for JPA in the net sum of £169,784.48.
48. For the reasons set out in Sections 10 and 11 above, I consider that neither of the exceptions to the general principle (that a claimant in the parlous financial position of JPA will not be entitled to judgment on the enforcement of an adjudicator's decision), have been triggered on the facts. Thus I consider that there are special circumstances which make it just and equitable for there to be a stay of execution.
49. For the reasons set out in Section 12 above I have concluded that, even if I was wrong to set off the £180,000, regardless of JPA's financial position, the second adjudication decision in respect of the £180,000 would justify a stay of execution up to that amount in any event.
50. For the reasons set out in Section 13 above, I conclude that the fact that the £300,000 must be repaid to Sentosa at the Final Account stage, which ought already to have happened, means that there is further separate reason why, in all the circumstances of this case, a stay of execution under RSC Order 47 is the only appropriate course.
51. Finally, I should add this. As I explained to the parties during the hearing, this is a situation where every possible feature of a building case is in play: defects, delays, valuation disputes and termination/repudiation. In such circumstances, absent ADR or a swift settlement, I do not consider that serial (and nakedly tactical) adjudications are the best method of achieving a comprehensive and binding resolution of the disputes between the parties.

20.

Note 1   This would appear, on its face, to be the same sum that is claimed in JPA’s draft final account.     [Back]

Note 2   Such a dispute has, of course, not even crystallised yet, there being no draft Final Account claim by JPA.    [Back]

Note 3   I should add, for completeness, that on the handing down of this judgment, Mr Wygas complained that this analysis ignored the JPA draft Final Account. As I explained to him, it does so for three reasons: first, because there is not yet even a claim by JPA for any sum by way of the Final Account; secondly, because the only evidence from JPA is an internal draft document which is manifestly incomplete; and thirdly because this exception to the usual rule as to the granting of a stay of execution in these circumstances depends on the claiming party showing that the unpaid sums found due by the adjudicator (ie the £300,000) have made all the difference, not other sums that might one day be claimed and may thereafter, if the claim is disputed, be the subject of a referral to adjudication.    [Back]