The claimant, South Coast Construction Limited, made two applications before the TCC. The first is a CPR Part 24 summary judgment application to enforce the adjudicator’s decision. The second, an application for permission to proceed with the enforcement hearing pursuant to Rule 43(6) (b) of Schedule B1 of the Insolvency Act 1986 after discovering that the defendant, Iverson Road Ltd, issued three Notices of Intention to Appoint an Administrator (NOI). This case considers the relationship between the Construction Act 1996’s adjudication regime and the administration regime under Schedule B1 to the Insolvency Act 1986.

In September 2013, South Coast (contractor) was engaged by the Iverson (employer) to build 33 apartments and three houses at a site on Iverson Road, north London. By June 2016, the first two phases of the project had been completed, but the contractor had suspended work for non-payment of sums due. Prior to this, there had been problems with the supply of design information to the contractor and the employer had paid prolongation costs. The dispute between the parties was referred to an adjudicator who awarded the South Coast £861,235 which Iverson failed to pay. In the weeks prior to the enforcement hearing, Iverson issued a series of three notices of intention to enter into administration. Under the Insolvency Act 1986, such notices would impose a 10-day moratorium upon any proceedings. The moratorium imposed by the third notice was set to expire the day after the enforcement hearing was due to take place. Iverson did not inform South Coast or the Court of the notices until two days before the hearing. Iverson argued that the adjudicator had exceeded his jurisdiction when dealing with extensions of time and claims for prolongation costs since there was no reference to such claims in the South Coast’s notice of adjudication. Mr Justice Coulson in the TCC had to decide whether he should exercise the court’s discretion to lift the moratorium imposed by the 1986 Act and allow the enforcement proceedings to continue.

Coulson J, applying the principles set out in Re Atlantic Computer Systems plc, [1992] Ch 505, held that adjudication enforcement proceedings are unique and without parallel in other divisions of the High Court. In particular, a party that has a favourable decision from an adjudicator is “in a much better position than most to argue that the court should exercise its discretion to continue to an enforcement hearing”. Coulson J also expressed his disapproval of the use of a notice to enter into administration as a ‘tactic’ in an attempt to avoid adjudication decision enforcement. Therefore, he gave a clear indication that the TCC will allow adjudication enforcement proceedings to continue during a moratorium imposed by the 1986 Act. However, Coulson J noted that the judgment would not give the contractor a preference or special status over other creditors and remain an unsecured creditor. Further, he outlined that an administrator or liquidator would be assisted by the determination, as it would provide “an answer to the only issue between the claimant and the defendant".