On 19 January 2017, Coulson J gave judgment in the case of South Coast Construction Limited v Iverson Road Limited.
The case is likely to have wide ranging implications in respect of the interplay between the Insolvency Act 1986 and enforcement of Adjudicators’ Decisions.
The facts are that South Coast Construction was in receipt of an Adjudicator’s Decision awarding it the principal sum of £861,235.00. Iverson Road failed to pay. In the weeks leading up to the enforcement hearing Iverson Road issued a series of three notices of intention to enter into administration. The effect of each notice (under the Insolvency Act 1986) was to impose a 10-day moratorium upon any proceedings, with the moratorium imposed by the third notice set to expire the day after the enforcement hearing was due to take place. Iverson Road did not inform South Coast Construction or the Court of the notices until two days before the hearing. As such Mr Justice Coulson 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 decided that the court should exercise this discretion and importantly held that adjudication enforcement proceedings are unique and without parallel in other divisions of the High Court and that a party that has a decision in its favour 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 such notices as a ‘tactic’ to avoid enforcement. As such the head of the TCC has given a clear indication that the TCC will allow adjudication enforcement proceedings to continue during a moratorium imposed by the 1986 Act.
Related barrier: Lucie Briggs instructed by Ashfords LLP for the Claimant
19 January 2017