Styles & Wood v GECIF is the first adjudication enforcement decision for a company in administration based on the recent Bresco ruling.
In June the Supreme Court ruled in favour of the liquidators of Bresco Electrical Services Ltd in its case against Michael J Lonsdale (Electrical) Ltd. [See our previous report here.]
Myerson Solicitors represented Styles & Wood (in administration) using the principles laid down in Bresco.
Styles & Wood (S&W) entered into a building contract with GE CIF Trustees (GECIF) acting through DTZ Investors for an office to residential conversion project at St Ann’s Square in Manchester. Following completion of the works, a dispute occurred regarding the final account of the multi-million-pound account.
Having started an adjudication process, S&W went into administration in February 2020, but the proceedings continued and S&W was awarded a substantial sum by the adjudicator. However, GECIF refused to comply with the adjudicator’s decision on the grounds of futility. In response, S&W brought enforcement proceedings before the courts.
Using the Supreme Court’s judgement on Bresco as the basis for the case, Myerson argued that the insolvency set-off rules do not trump a construction contract party’s right to adjudicate. S&W proposed to fulfil the conditions of enforcement (as set out in Meadowside Building Developments v 12-18 Hill Street Management) by ringfencing the awarded sums for three months and taking out an after-the-event (ATE) insurance policy to cover any potential adverse costs in subsequent proceedings.
The court accepted these arguments and, on 4th September 2020, decided in favour of Styles & Wood.
The Myerson Solicitors team was led by Neil Armstrong and Jack Duncanson with Riaz Hussain QC of Atkin Chambers as Counsel.
Having represented Styles & Wood in both the adjudication and enforcement proceedings, Neil Armstrong, said: “It’s always exciting to test new precedents in court and this decision will be of significant interest to parties involved in adjudication and the insolvency of construction companies.”