Absolute Rentals Limited -v- Gencor Enterprises Limited
The decision should be enforced despite the employer having begun arbitration proceedings against the contractor and execution of the judgement should not be stayed
16 July, 2000
The contract was for work on the house owned by the employer company which was occupied by the company's owner. The contractor applied for summary judgement to enforce the adjudicator's decision that the employer should pay it a specified sum. The employer resisted enforcement on various grounds. Judge Wilcox held that a limited company could not be the residential occupier of a dwelling house within the meaning of section 106 of the Housing Grants, Construction and Regeneration Act 1996 which provided for exceptions to what constituted a ?construction contract? under that Act with the result that the Act did apply. He also held that the decision should be enforced by way of summary judgement notwithstanding the fact that the employer had already commenced arbitration proceedings against the contractor in relation to a dispute arising out of the contract. This was on the basis that the Act required the parties to a construction contract to make provision for the adjudication of disputes and in the absence of such provisions the Scheme for Construction Contracts was to be implied. In addition the adjudicator's decision and its enforcement was without prejudice to the final merits of the dispute and its determination by any arbitrator. Lastly he held that execution of the summary judgment should not be stayed pending the outcome of the employer's claims against the contractor arising out of the same contract in the arbitration proceedings it had begun on the ground that the contractor's financial position meant that it would not be able to repay the sum in the event of the final determination of the parties? disputes being in the employer's favour. This was on the basis that to do so would frustrate the Scheme for Construction Contracts whose purpose was to provide a speedy mechanism for settling disputes on a provisional interim basis. Also the court was not in a position to judge the financial standing of either party on the basis of the limited evidence before it. Advice Note The courts will be very unwilling not to enforce a judgment simply because a defendant has other proceedings outstanding against the claimant. This is because the statutory scheme of adjudication is that it is always open to challenge the merits of the decision and have the dispute finally resolved by subsequent court or arbitration proceedings.