Wednesday, 15 June 2022

Nicholas James Care Homes Ltd v Liberty Homes (Kent) Ltd

[2022] EWHC 1203 (TCC)

By a pre-action letter of claim, Liberty claimed sums in the total of £1.15million. By reply, NJCH asserted a right to recover overpayments in the sum of £2.6 million. On 21 October 2021, NJCH started a “true value” adjudication in respect of the value of work carried out. On 18 February 2022, the adjudicator ordered Liberty to repay some £2.5million. Liberty did not pay and NJCH issued summary enforcement proceedings on 29 March 2022. The court issued a standard directions order on 1 April 2022. The hearing was listed for 15 June 2022.

On 21 April 2022, NJCH obtained a freezing injunction, without notice, that Liberty must not remove or in any way dispose of the value of any of its assets up to the value of £2.9million. At the full, on-notice hearing, Mrs Justice O’Farrell  was satisfied that NJCH had a good arguable case in relation to the substantive adjudication enforcement claim: 

“It is well-established that the court’s approach to adjudication enforcement is a robust one. The applicant has the benefit of a ‘true value’ adjudication decision in its favour for a substantial sum of money. Generally, the court will enforce such adjudication decisions, even where it can be shown that there are errors of fact or procedure. The only defences that will usually succeed are a breach of the rules of natural justice or the absence of jurisdiction on the part of the adjudicator.”

It was common ground that Liberty had transferred assets, with a total value of almost £6 million, to related third-party entities in November 2020, despite knowing at that time that NJCH claimed an entitlement to re-payment of very substantial sums. NJCH did not find this out until 2022. There was therefore a very real risk that Liberty would be unable to satisfy any judgment against it. NJCH did not have to establish that Liberty intended to deal with its assets with the purpose of ensuring that any judgment would not be met. The test was an objective  assessment of the risk that a judgment may not be satisfied because of an unjustified dealing with assets. 

Accordingly, the freezing injunction was kept in place until after the adjudication enforcement hearing on 15 June 2022.

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