Galliford Try Building Ltd v Estura Ltd

[2015] EWHC 412(TCC)

Here, there was no defence to the application for summary judgment in the sum of £3.9 million; no payment or pay less notices had been served (see ISG v Seevic (Issue 174)). Indeed an adjudicator resigned when a counter-adjudication was commenced about the true value of the application in question. However, Mr Justice Edwards-Stuart did order a stay of part of the sum in question on the grounds that the court had jurisdiction to do so where there was a “risk of manifest injustice”.

The Judge stressed that the facts were “unusual” and “exceptional”. However, he thought that there were two alternatives. First, to take a robust approach and refuse to grant a stay, as to do otherwise would be contrary to the usual policy of the court. This would leave the contractor with the choice either of insisting on payment of the award in full with the risk of forcing the employer into insolvency, or negotiating a compromise. The second was to order a stay in part, which the Judge did, even though it was a situation of the employer’s own making. This reduced the sum that had to be paid immediately to £1.5 million. Why was this case “unusual”? Well, the interim application was described as an “indicative final account and valuation summary”. Given the 100% recovery, and the fact that the application was only £4K less than the anticipated final account, there was no incentive on the contractor to submit a final account. Without a final account, there could be no dispute for the employer to refer to adjudication or to the courts.

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