Gray & Sons Builders (Bedford) Limited v Essential Box Company Limited
In Gray & Sons Builders (Bedford) Limited v Essential Box Company Limited, Essential Box engaged Gray to demolish and rebuild an industrial unit in Bedford. In a first decision the adjudicator decided that Essential Box had repudiated the contract. In a second decision he decided that over £100,000 plus interest was due to Gray.
Essential Box did not pay. Gray commenced enforcement proceedings. Essential Box did not submit any evidence in opposition but did not state that the claim was accepted. Its solicitors wrote raising technical points. Essential Box offered payment of the sum by four instalments, which was not accepted. The day before the hearing Essential Box submitted its written argument stating that the application to enforce the adjudicator’s decision would not be opposed.
The issue before the court was liability for costs. The court does not normally award full costs on an indemnity basis. Instead it assesses costs taking into account guideline rates and the proportionality of the costs to the amount in dispute.
However, in this case, the court said that the right basis for assessment of costs where a defendant resists enforcement of an adjudicator’s decision until the date of the enforcement hearing is indemnity costs, since the defendant knew or ought to have known that it had no defence. Gray was not to be deprived of any of its costs only because an offer to pay by instalments had been made. Gray had done better by obtaining judgment for the full amount, than by accepting instalments.
