Legal Developments In Construction Law

1. Court adds an extra ground for staying adjudication enforcement

   A cladding subsubcontractor, Gosvenor, asked the court to enforce an adjudication award against Aygun, the subcontractor that had employed it. Aygun was unsuccessful in resisting Gosvenor's application, despite making allegations of fraud, as the court ruled that those allegations could and should have been made in the adjudication. Aygun also asked the court, however, to stay enforcement. In granting the stay the court added another principle to the list of principles governing the court's discretion, when considering a stay of enforcement, as set out Wimbledon Construction Company 2000 Ltd. v Vago. The new principle, (g), is:

   "If the evidence demonstrates that there is a real risk that any judgment would go unsatisfied by reason of the claimant organising its financial affairs with the purpose of dissipating or disposing of the adjudication sum so that it would not be available to be repaid, then this would also justify the grant of a stay."

   The court added some important comments, noting that such a feature is only likely to arise in a very small number of cases, and in exceptional factual circumstances. In the vast majority of cases, the existing Wimbledon v Vago principles will suffice. A high test will be applied as to whether the evidence reaches the standard necessary for the principle to apply, the standard being broadly the same as that necessary to justify granting a Freezing Order. Mere assertions and isolated discrepancies on statutory accounts will not be sufficient. The additional principle is not designed to prevent a claimant from dealing with the adjudication sum in the ordinary course of business, or make evidence of what a claimant might be intending to do in the future, in the ordinary course of business, relevant or admissible under this head, as the purpose of adjudication decisions being summarily enforceable would be frustrated if a winning party in adjudication had to place any payment in an account, and not use it, to avoid the risk of a stay of execution being ordered.

   Gosvenor London Ltd v Aygun Aluminium UK Ltd [2018] EWHC 227

2. Interpretation of 'Defect' leaves tunnel contractor with bill for over £100million

   A power station headrace tunnel suffered a catastrophic collapse a few months after take over by the employer and well before the defects period had expired. The cost of the remedial works contract, which involved another contractor constructing a bypass tunnel, came to about...