CG Group Ltd v Breyer Group plc (No 2)

The claimant should not be awarded its costs of the successful enforcement proceedings on an indemnity basis.



Technology and Construction Court
Akenhead J
3rd October 2013

Akenhead J rejected the claimant’s contention that it should be awarded its costs of the successful enforcement proceedings on an indemnity basis.
The first ground relied on by the claimant in support of its contention was that the defendant acted unreasonably both in raising and maintaining defences on jurisdictional and natural justice grounds in the adjudication and the enforcement proceedings. The judge stated that although the challenge on jurisdictional grounds was weak, the challenge on the ground of an alleged failure to comply with the rules of natural justice was not without some merit. The issue arose during the adjudication on the basis of what the defendant (as respondent) argued in its response. Having effectively been told by the defendant that the "payment terms of the sub-contract conditions would prevail", the adjudicator could not really be criticised for proceeding on the basis that he could have regard to such terms despite the claimant was arguing that such terms did not apply for one reason or another.
The second ground was that the defendant and its counsel submitted further written submissions after the hearing in the enforcement proceedings. The judge stated that the provision of the further written submissions was unfortunate because it had always been open to the defendant to make these points towards the end of the oral hearing. This added to the cost because it would have been cheaper for it to have been dealt with at the end of the oral hearing. However, the further submissions addressed a point which was raised by counsel for the Claimant in her oral reply submissions.
The third ground was that the claimant made settlement offers before and during the enforcement proceedings which were not accepted by the defendant. The judge stated that the offers were not to settle the pending and later issued proceedings which simply involved seeking the enforcement of the adjudicator's decision and related to a full and final settlement in effect of all issues between the parties arising out of or in connection with the underlying contract. It is open to a party to adjudication enforcement proceedings to make an offer which is "without prejudice save as to costs" to settle those proceedings. It would therefore have been open to the claimant to offer to accept a sum less than it was claiming in the enforcement proceedings and then to pray that in aid in seeking indemnity costs.