Final Accounts And The Challenge Of Staying Execution In Adjudication Enforcement ' The Latest Judgment From The TCC

• Published date: 19 May 2020
• Author: Mr Ashley Pigott and Cathy Moore
• Subject Matter: Finance and Banking, Real Estate and Construction, Tax, Financial Services, Construction & Planning, Sales Taxes: VAT, GST
• Law Firm: Gowling WLG

The latest Technology and Construction Court (TCC) judgment on payment and the enforcement of an adjudicator's decision has just been handed down, and has some key lessons, particularly in the current crisis.

We analyse the decision in Broseley (London) Ltd v Prime Asset Management Ltd [2020] and the significant issues covered in relation to adjudication enforcement and the resolution of final accounts.

Background

• PAML appointed Broseley to carry out refurbishment works for PAML at Stanley House in Chelsea under a construction contract (the Contract) governed by the Housing Grants, Construction and Regeneration Act 1996 as amended (the Construction Act). The works were commenced in December 2017.
• In July 2019, Broseley submitted a payment application in the sum of '485,216.17 plus VAT (Valuation 19). PAML failed to give a payment notice and, although it did give a pay less notice this was late, so invalid.
• Accordingly, the amount claimed by Broseley in Valuation 19 should have been paid by 1 August 2019. PAML did not pay and Broseley commenced an adjudication for payment of Valuation 19 and was successful - the adjudicator's decision was issued on 12 September 2019 (Adjudication 1).
• As PAML did not pay the amount awarded by the adjudicator ('485,216.17 plus VAT and interest), PAML commenced these proceedings to enforce that decision. Prior to the hearing, PAML in fact accepted that judgment should be entered against it as claimed, but applied for a stay of execution.
• By way of further background, there were two other adjudications between the parties relating to the Contract - the same adjudicator dealt with all three adjudications. The outcomes of the second and third adjudications are summarised below.
  
  
  • Adjudication 2: decision dated 1 October 2019: declarations relating to Valuation 20.
  • Adjudication 3: decision dated 28 November 2019 - Broseley obtained a declaration that it had lawfully terminated the Contract on 29 September 2019 on the basis that PAML had failed to pay sums due to Broseley, in particular the amount due pursuant to Valuation 19 (confirmed in Adjudication 1).

The TCC proceedings - the context of PAML's application for a stay of execution

As set out above, by the end of March 2020, PAML no longer opposed Broseley's application to enforce, but had applied for a stay of execution for payment.

PAML sought a stay of execution of around two months in order (originally) to allow a "true value" adjudication to take place - PAML's...