Gosvenor London Ltd v Aygun Aluminium UK Ltd

Case reference: 
[2018] EWCA Civ 2695
Monday, December 3, 2018

Key terms: 
Adjudicators’ decisions- Construction Contracts- Dissipation of assets- Enforcement- Stay of Execution

By way of background, on 28 March 2018, Fraser J found in favour of the Claimant, Gosvenor London Ltd (“Gosvenor”) in the sum of £553,958.47 on their application for summary judgment to enforce the decision of the adjudicator. Fraser J, in handing down the judgment, noted that Aygun Aluminium UK Ltd (“Aygun”) knew about the fraudulent invoices at the time of the adjudication and therefore should have brought this issue up during the adjudication and so added a new principle “(g)” to the case of Wimbledon Construction Co 2000 Ltd v Derek Vago [2005]. He simultaneously ordered a stay of execution which forms the basis of this appeal. Gosvenor appealed Fraser J’s decision on the basis that he had erred in awarding the decision that he had and creating the new principle “(g)”.

In relation to the principle (g), the Court considered that this issue was a narrow one. Gosvenor’s complaint was that the judge erred in failing to qualify the addition (g) by stating that it could not be based on evidence that was, or could have been, deployed in the adjudication whilst Aygun disagreed noting that there was no hard-edged principle. In giving the leading judgment, LJ Coulson preferred the submissions made by Dr Sampson, noting that it is for the judge in the case to assess the extent (if at all) to which there is a material overlap between the evidence that was, or could have been, deployed at adjudication. 

As for the specific disputes on appeal and Fraser J’s application of the principle (g), the Court held that Fraser J had acted within his discretion in determining that “the risk of dissipation” of the assets was a consideration. Again, attention was drawn to the judgment of Fraser J which drew attention to the high bar that had to be met.

The Court of Appeal upheld the judgment of Fraser J stating that he “was entitled to come to the view that he did” and that, in exercising his discretion, he was entitled to grant a stay of execution. Therefore, the appeal against the stay of execution was dismissed. 

This case is important as it confirms the introduction of a new principle (g) to the test set out in Wimbledon Construction v Derek Vago. It permits judges to grant a stay of execution in adjudication enforcements when there is a real risk that there could be a dissipation of the assets. It also confirms that the right of stay is not hindered by the absence of supporting evidence and provides clarity on when claims of fraud can be made. 

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