COMPANY VOLUNTARY ARRANGEMENT NOT IN ITSELF A GROUND FOR A STAY OF EXECUTION

Mead General Building Ltd v Dartmoor Properties Ltd [2009] EWHC 200 (TCC), 4 February 2009

In Mead General Building Ltd v Dartmoor Properties Ltd [2009] EWHC 200 (TCC), 4 February 2009, the defendant sought to resist enforcement of an adjudicator’s decision on the ground that the claimant was subject to a Company Voluntary Arrangement (‘CVA’). While Mr Justice Coulson held that this was a relevant factor to take into account when deciding whether or not to grant a stay, he concluded that the mere fact that a claimant is subject to a CVA does not, in and of itself, entitle a defendant to a stay. In concluding that a stay was not appropriate on the facts, Mr Justice Coulson had regard to the fact that the CVA was the result of the defendant’s failure to pay the sums due to the claimant, the supervisor of the CVA believed that the claimant was a viable concern which could trade its way out of its difficulties and the fact that there was no reason to believe that the claimant would not be in a position to pay back any part of the judgment if it was subsequently held that it had been overpaid.