Pro-Design Ltd v New Millennium Experience Company Ltd
The adjudicator's decision awarding the sub-contractor a sum in respect of the value of its works should not be enforced by way of summary judgement on the basis of the contractor's unanswered allegations that the money awarded was brought about by an unlawful and fraudulent conspiracy
26 September, 2001
-The adjudicator made a decision in the sub-contractor's favour. The sub-contractor brought court proceedings against the contractor to enforce to the decision by way of summary judgement. The contractor alleged unlawful and fraudulent conspiracy against one of the sub-contractor's employees. The contractor's allegations were that (1) The sub-contractor company was a fraudulent vehicle owned, operated, managed, controlled, supervised and executed by a person employed by the contractor who was responsible for the contractor's works (2) The employee wrongfully and in breach of his contract of employment conspired with other persons to create a company to carry out work on the basis that he was in a position to ensure that that company got the work (3) The shares in the company were owned by his mother and (4) The employee's wife took a leading role in the performance of the conspiracy and was herself employed by the contractor. Judge Mackay held that the decision should not be enforced by way of summary judgement on the basis that the contractor advanced unanswered allegations at the enforcement hearing that the money represented by the adjudicator's award was brought about and created by an unlawful and fraudulent conspiracy. The main effect of the caselaw in relation to insolvency was that there was no overriding objective upon the court to ensure that fraudulent claims should benefit from their fraud. The fact that the sub-contractor was unable at the enforcement hearing to answer any of the contractor's allegations was of fundamental importance meant, as a matter of doing justice in the real world (rather than as a matter of the burden of proof), that the court had no option but to refuse the application for summary judgment. Finally the sub-contractor's mere refutation of the allegations at the enforcement hearing put a needless and unhelpful legal gloss on what was a real situation. Advice Note Even though decisions will normally be enforced by the courts by way of summary judgment, they will not be enforced where there is a prima facie case that the decision was in some way obtained by fraud.