Adjudication
Ashley House plc -v- Galliers Southern Limited (2002) TCC

© Daniel Atkinson 2002      02 October 2002        

In Ashley House plc -v- Galliers Southern Limited (2002) TCC decision of Judge Seymour QC dealt with an application for summary judgment by Galliers on an amount of £162,042.43 in an adjudicator’s decision. The decision appears to expand the situations (set out by Judge Seymour himself in Rainford House Ltd v Cadogan Ltd) in which the financial circumstances of the party seeking payment, will prevent immediate payment of the sum awarded by an adjudicator.

In the application, Ashley House conceded that Galliers was entitled to summary judgment but submitted that in the light of evidence as to the financial situation of Galliers, it would be appropriate for there to be a stay of execution of the judgment. Ashley House was prepared as a conditions of the imposition of a stay of execution to pay into court the amount of the adjudicator’s award.

Judge Seymour held that the evidence established that Galliers would be unable to repay the amount awarded by the adjudicator in the event that the challenge which had been mounted by Ashley House to that award was successful. Notice of reference to arbitration in relation to, amongst other things, the decision of the adjudicator has recently been given on behalf of Ashley House. The evidence was that the financial situation of Galliers was essentially unchanged since the making of the contract which had given rise ultimately to the claim. It was material that quite a number of the debts which Galliers accepted it owed to others were quite small.

Galliers stated that in the event that it had an immediately enforceable judgement against Ashley House it would intend to settle those debts. The effect of so doing would be to consume all but about £40,000 of the amount for which it is accepted that judgment should be entered. In answer to a question as to how in those circumstances Galliers would intend to repay the amount of the adjudicator’s award in the event that Ashley House was successful in the arbitration proceedings Galliers submitted, in effect, that it was not for Ashley House to complain about that risk because they had brought about that situation themselves.

Judge Seymour referred to his decision in Rainford House Ltd -v- Cadogan Ltd (2001) BLR416. He noted that his decision was technically speaking not binding upon him even though it was his own decision. Galliers did not argue that there were material differences between circumstances of Rainford House v Cadogan and the circumstances of the present case beyond the submission that, on the evidence in the present case, the parlous financial condition of Galliers has been brought about by the failure of Ashley House to make payment to Galliers of sums which it ought to have paid.

Judge Seymour stated that he did not accept the arguments by Galliers. Paradoxically he found that the consequence of the failure of Ashley House to make payments (found as due by the adjudicator) was that Galliers were unable to continue trading.

Accordingly Judge Seymour held that whilst entering judgment for Galliers against Ashley House in the sum of £162,042.43, he ordered stay of execution of that judgment upon terms that the amount be paid into court.