Enforcement—threat of insolvency
See Bernards Sports Surfaces Ltd v Astrosoccer4u Ltd20
The claimant contractor Bernards, sought enforcement of an adjudicator’s award in its
favour for £175,962.47. Because the defendant employer Astrococcer subsequently threatened to
give and purported to file notice of intention to appoint an administrator, Bernards also
applied for permission to continue the proceedings to enable them to obtain judgment.
Had such a notice of intention been properly filed in court it would have imposed a
five day moratorium on proceedings.
The judge’s attention was drawn to his previous decision in South Coast Construction Ltd v Iverson
Road Ltd21. In that case Coulson J had given permission for the proceedings to be continued
applying the relevant principles including proprietary interests, questions of conduct, and the
stage the proceedings had reached. Adjudication enforcement proceedings were also to be
regarded as exceptional, as in
the majority of cases, they were bound to succeed.
All those same reasons applied here; the administration process would not be frustrated;
the proceedings were effectively at an end; there was no risk of unfair or
unreasonable preference. Therefore the court granted permission to continue the
proceedings in this case.
The Court was at pains to point out that in this case the conduct of Astrosoccer was far more
serious than the conduct of South Coast. Astrosoccer had sought to avoid paying the debt by a
number of devices including the giving of an “entirely bogus” purported notice of intention to
appoint an administrator. The court identified and enumerated eight separate particular points
of conduct designed to avoid payment or thwart the enforcement process. Singularly, it
also criticised Astrosoccer’s solicitors for their “connivance” in that conduct amounting to
an “intention to misuse the insolvency proceedings”.
There was no real justification for the threat to invoke the insolvency jurisdiction in order to
avoid compliance with the adjudicator’s decision. Accordingly judgment was entered
for Bernards.
This article was originally written and published on the internet by Slater Heelis on 07/06/18.
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