Packman Lucas was engaged from April 2005 by Anglo Swiss to provide engineering services at a number of properties in London and at a hotel in Buckinghamshire. The terms of engagement provided that payment would be made by reference to the stages of work reached.

 

By mid 2007 payments to Packman Lucas had stopped and in April 2009 it commenced four adjudications for the outstanding fees. Anglo Swiss argued that not only was nothing due to Packman Lucas but it had been overpaid. The Adjudicator decided that in each case that valid notices under sections 110 and 111 of the Act had not been served in time or at all and Anglo Swiss should pay Packman Lucas.

 

Anglo Swiss declined to pay the sums due and Packman Lucas started enforcement proceedings. In August 2009 judgment was entered against Anglo Swiss and interim charging orders were made on Anglo Swiss’ properties. Charging orders on three properties were made final on 16 October 2009. On 15 October, however, Anglo Swiss commenced three sets of proceedings claiming the alleged overpayments in respect of these properties.

 

Packman Lucas then applied to have the three proceedings consolidated – which was agreed; for a stay pending compliance with the Pre-Action Protocol; and for a stay pending compliance with the Adjudicator’s decision and that Anglo Swiss provide security for costs.

 

The Judge refused to grant a stay on the basis that Anglo Swiss had not complied with the Pre-Action Protocol because the dispute related to the same or substantially the same issues as the previous adjudications: this is an exemption provided in the Protocol. Even if he were wrong in his decision to refuse the stay on this ground the Judge refused it in any event as a matter of discretion. The exchange of information during the adjudication process meant that going through the pre-action process would be unnecessary and a waste of costs.

 

Regarding a stay on the failure to comply with the Adjudicator’s decisions and the court’s judgment, the Judge stated that CPR 3.1(2) gives the court wide powers to “stay the whole or part of any proceedings or judgment either generally or until a specified date or event”. This power must be balanced with the overriding objective to “deal with cases justly” and “ensuring that the parties are on an equal footing”, but with this in mind he still thought it correct to grant the stay.

 

He also noted that there was little case law dealing with proceedings in which one party seeks a stay because the claimant has not complied with its contract or judgments against it. Yet from the little authority to which he could refer, and in light of the CPR and overriding objective, he drew certain principles:

 

 

In this case Anglo Swiss were acting unreasonably and oppressively by ignoring the contractual and statutory requirements to honour the Adjudicator’s decisions, and they were trying to avoid the “pay now, argue later” principle that the Act had intended to be in operation. Furthermore, as Packman Lucas was not insured with regard to fee recovery claims, Anglo Swiss were trying to keep sums of money that were properly due to Packman Lucas by claiming “relatively modest sums on three projects” and putting pressure on Packman Lucas. There was also evidence of bad faith as Anglo Swiss had put forward claims that were heavily exaggerated or that they had since become aware were heavily exaggerated.

 

The Judge was of the view that as Anglo Swiss was able to fund expensive litigation there was no reason why they should not pay the sums the Adjudicator had awarded. This was therefore an appropriate case to order a stay until Anglo Swiss had done so.

 

The Judge also granted a stay until Anglo Swiss provided security for costs.