Mead General Building Limited ("Mead") sought to enforce an adjudicator's decision. Dartmoor Properties Limited ("Dartmoor") had engaged Mead to carry out a development scheme in Devon. A dispute arose between the parties and it was referred to adjudication. The adjudicator decided in Mead's favour and ordered Dartmoor to pay Mead £332,026.64 plus interest and a contribution towards his fees. Dartmoor failed to pay these sums and Mead sought to enforce the adjudicator's decision.

Dartmoor resisted enforcement on the basis that, as Mead was subject to a CVA (a company voluntary arrangement), a stay should be granted on any judgment otherwise awarded to Mead. Dartmoor also alleged that the adjudicator was wrong and that it intended to pursue an arbitration claim against Mead although this claim had not yet been commenced. Dartmoor did not appear at the enforcement proceedings.

The Judge dismissed Dartmoor's complaints and enforced the decision, and then considered whether there should be a stay of execution. The fact that Mead was in a CVA was not relevant to judgment being entered in Mead's favour but only relevant to a stay of execution of this judgment. Dartmoor had not taken any jurisdiction points or a breach of natural justice and therefore there was no basis that Dartmoor could seek to defend the claim.

In deciding whether it would be right to order a stay of execution, the Judge referred to his earlier decision in Wimbledon v Vago and his summary of the earlier authorities dealing with the interaction between adjudication enforcement and a stay of execution. There was no previous authority dealing with the position of a Claimant who was the subject of a CVA and who sought to avoid a stay of execution. The Judge therefore decided the following principles were relevant:

1 The fact that a Claimant is the subject of a CVA will be a relevant factor for the Court to take into account when deciding whether or not to grant a stay of execution of the judgment.
2 However, the mere fact of the CVA will not, of itself, mean that the Court should automatically infer that the Claimant would be unable to repay any sums paid out in accordance with the judgment, such that a stay of execution should be ordered.
3 The circumstances of both the CVA and the Claimant's current trading position will be relevant to any consideration of a stay of execution.
4 It is also relevant as to whether or not the Claimant's financial position and/or the CVA is due, either wholly or in significant part, to the Defendant's failure to pay the sums awarded by the adjudicator.

In this case, Mead's current financial position was that, despite the difficulties created by the non-payment of the adjudicator's decision, Mead was continuing to trade successfully. There was clear and cogent evidence that Mead's financial difficulties began when Dartmoor started to pay less than what was being claimed and in some instances made no payments at all. The Judge accepted Mead's evidence that Dartmoor's failure to pay was the principle reason for Mead's financial difficulties. Further, the CVA's supervisor provided evidence that he believed Mead could trade successfully out of their temporary difficulties. Therefore, there was no reason to believe that Mead would not be in a position to pay back any part of the judgment sum if, in a subsequent arbitration, the arbitrator concluded that they had been overpaid. As Mead's financial difficulties had been caused and/or contributed substantially to, by the Dartmoor, the court was not prepared to grant a stay of execution on the basis of those financial difficulties.

Mead had also claimed interest on the judgement at the full rate of 8%, which the Judge allowed. Further, the judge went on to consider whether Mead were entitled to seek the costs of the proceedings on an indemnity basis in accordance with the Gray & Sons Builders (Bedford) Ltd v Essential Box Company Ltd and Harris Calnan Construction Ltd v Ridgewood (Kensington) Ltd. The Judge decided that, in this instance, costs on an indemnity basis should not be made, as:

1 The issue of the CVA may have been rejected by the Judge, but he regarded it as an arguable point in relation to the stay of execution. It would not be appropriate to award indemnity costs simply where a point raised by a defendant has failed; and
2 Mead's advisors had wasted unnecessary time putting together documents for the enforcement hearing bundle that were irrelevant to the proceedings. In an adjudication enforcement claim, a claimant need only identify the adjudication provisions contained in or arising from the contract, and the adjudicator's decision. Only if the defendant raises points regarding jurisdiction or natural justice, or in this case the CVA, will anything else be relevant.

On that basis the Judge reduced Mead's bill of costs by 25% to account for the unnecessary costs incurred in the trial bundle.