Ashfords LLP act for South Coast Construction Limited in Landmark Construction Case
Thursday, 9th February 2017
Ashfords LLP's Construction and Engineering Team has recently won a landmark adjudication case for a construction company in the Technology and Construction Court in the case of South Coast Construction Limited v Iverson Road Limited  EWHC 61 (TCC).
The case concerned proceedings for the enforcement of an adjudicator's decision and is likely to have wide ranging implications in respect of the interplay between the Insolvency Act 1986 and the enforcement of adjudicators' decisions, in particular what happens when a company which has an adjudication decision against it issues a notice of intention to enter into administration or enters into administration.
One effect of a notice of intention to enter into administration is to impose a statutory moratorium on the commencement or continuation of court proceedings against the company. In this case, the defendant issued a series of notices of intention to enter administration without informing the claimant or the court. The defendant notified the claimant of the existence of the third of the notices only two days before the hearing of the claimant's application for summary judgment to enforce the adjudicator's decision in its favour. By coincidence, the ten business day moratorium expired on the same day as the hearing of the claimant's application, being 18 January 2017.
Coulson J reserved his judgment to the following day, 19 January 2017, and as such a decision on the moratorium issue was not strictly necessary. However, Coulson J still gave judgment on this point as it had been fully argued before him and the issue has wide ramifications.
In summary, Coulson J concluded that he would have granted permission to lift the moratorium due to the very nature of an adjudicator's decision. As such, the judgment gives clear guidance that adjudication enforcement proceedings will trump a statutory moratorium imposed by the Insolvency Act and that the courts are likely to exercise their discretion to lift a moratorium, allowing adjudication enforcement proceedings to continue.
Stephen Homer, Partner in the Construction and Engineering Team at Ashfords LLP, commented: "This is a hugely important win for our client, South Coast Construction Limited, and we are delighted with the outcome of this case. It also sends an important message to the industry that the courts won't allow a notice of intention to enter into administration to derail adjudication enforcement proceedings and is consistent with the courts' backing of adjudication generally."