The defendant purchased three terraced properties with her husband.The properties were affected by asbestos contamination. With the assistance of a grant from Leeds City Council the defendant intended to refurbish the properties, keeping two and selling off the third property. The defendant entered into a contract with the claimant for the refurbishment of those properties.
Problems arose during the refurbishment works and the claimant did not receive full payment for the works. The council did not make payments of all outstanding amounts to the claimant, and it is unclear whether the defendant could make any substantial payments if the council did not pay the amount expected.
As a result of the non-payment the claimant suspended work and issued adjudication proceedings. The adjudicator’s decision was the first of three decisions in this case. This was in January 2006 when the adjudicator found in favour of the claimant in the sum of £90,194.53 including interest.
The defendant did not pay the judgment sum and so in March there was a second hearing as a result of non-payment by the defendant of the amount awarded by the adjudicator and enforced by the court in January.
In February the claimant made an application for an interim charging order, which the court approved. The claimant requested that the interim charging order be made final. The defendant did not attend and was not represented, however their solicitor raised in correspondence some technical issues, which the judge considered. Judge Coulson made it quite clear that the defendant should have honoured the court judgment and that the order should be made final.
In the current proceedings the claimant sought an order for sale of property arising out of the final charging order, due to the defendant’s continued non-payment of the debt.
The court considered whether there should be a stay of the order for sale. The claimant argued that to do so would frustrate the adjudication and enforcement process. The defendant argued that as there was an on-going arbitration between the parties, no order for sale should be made.
Reference
This court noted that if it did not grant the application for an order for sale of property because there was an on-going arbitration between the parties it would mean “that any unsuccessful party in adjudication would know that, if they refused to pay up for long enough, and started their own arbitration, they could eventually render the adjudicator’s decision of no effect. It would be condoning, in clear terms, a judgment debtor’s persistent default…”
The court therefore held that in light of the defendant’s on-going refusal, or inability, to meet the judgment sum the claimant was entitled for an order for sale.
* Full case details: HARLOW & MILNER LIMITED VS MRS LINDA TEASDALE, [2006] EWHC 1708, 7 JULY 2006, TCC, HHJ COULSON QC
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Postscript
This case highlights that a judgment will be enforceable regardless of whether there are other on-going proceedings between the parties. It confirms the case law that a party who is ordered to make payment, in accordance with an adjudicator’s decision cannot seek to avoid payment by setting off other claims it might have.
It also highlights that the court is prepared to take the necessary action including an order for sale of property if a debtor continues to refuse to pay their debt.
