Harlow & Milner Ltd v Teasdale (Part I)

No costs order should be made in relation to the bankruptcy proceedings brought by the contractor to enforce the sum awarded in its favour by the adjudicator against the homeowner which resulted in its statutory demand being set aside by consent

Technology and Construction Court
His Honour Judge Peter Coulson QC
16 January 2006
The contractor obtained an adjudicator's decision in its favour and sought to enforce it by serving a statutory demand for the sum awarded on the homeowner. The homeowner prepared a lengthy affidavit in support of her application to set the statutory demand aside. The statutory demand was set aside by consent and the parties agreed that the question of the costs of the bankruptcy proceedings would be reserved to a judge of the Technology and Construction Court. The hearing before the court dealt with the contractor's application to enforce the decision as well as the costs application. The grounds on which the homeowner relied in opposing the enforcement of the award in her affidavit should clearly be rejected with the result that the decision should be enforced by way of summary judgment in the court enforcement proceedings.
Judge Coulson held that no costs order should be made in relation to the bankruptcy proceedings on the basis that whilst such proceedings were not the appropriate (or efficient) way in which to enforce adjudicators' decisions, the principal product of the proceedings was the homeowner's affidavit in which she set out her grounds of defence to the enforcement of the decision, all of which should be rejected in enforcing the decision in the court enforcement proceedings.
In coming to this conclusion the judge made observations on the appropriateness of enforcing adjudicators' decisions by court enforcement proceedings in the Technology and Construction Court and the inappropriateness of trying to do so by other means, such as bankruptcy proceedings. He stated that whilst a statutory demand was not of itself the wrong way to enforce an adjudicator's decision, there was a procedure expressly tailored by the Technology and Construction Court to allow the prompt and efficient enforcement of decisions. The second edition of the Technology and Construction Court Guide published in October 2005 made it clear that that court would deal with applications to enforce decisions regardless of their value and quickly and efficiently in accordance with a procedure worked out in consultation with the construction industry and court users. Other ways of enforcing adjudicators' decisions, such as bankruptcy proceedings, were something of a blunt instrument and raised potential issues which had little or nothing to do with the decision.