Joanna Smith J emphasised the fact that there are only limited circumstances in which the Court will refuse an application for summary judgment, one of which may be where it is within the Court's discretion to permit a set-off.
By reference to various authorities, she summarised the general position relating to set off as follows:
- Unless there is a valid jurisdictional or natural justice ground which renders enforcement inappropriate, the adjudicator's decisions regarding direct payments of money should be enforced "summarily" and "expeditiously".
- Where the parties have engaged in numerous successive adjudications, in the absence of special circumstances, the losing party cannot withhold payment on the ground of anticipated recovery in a future adjudication based upon different issues.
- There are three limited exceptions to the general position.
The exception that ISG sought to rely on was where there were two valid, enforceable adjudication decisions involving the same parties and one party sought to set off one adjudicator's decision against the other.
Joanna Smith J referred to Akenhead J's Judgment in HS Works Ltd v Enterprise Managed Services Ltd ("HS Works").
In applying Akenhead J's four steps set out in HS Works, the TCC concluded that ISG was not permitted to resist enforcement of the Wood Decision.
Joanna Smith J applied the steps set out in HS Works as follows:
- Validity – The Court confirmed that ISG fell at the first hurdle of validity, as the Court was unable to declare the validity of the Molly Decision on enforcement proceedings relating specifically to the Wood decision.
- Enforceability/Effect – the TCC concluded that it was unable to give effect to the Molloy decision as it had not yet been declared enforceable.
- Separate Proceedings – The Court noted that separate proceedings had not been issued in respect of the Molloy Decision.
- Discretion – the TCC denied the suggestion that they had any discretion to permit a set-off or withholding as the facts of the case were not within the territory of the exception that was envisaged by HS Works, as referred to above.
In relation to the Project Triathlon adjudication decisions, the TCC summarised the position briefly as their financial impact was relatively small.
Joanna Smith J rejected the submission that it would be appropriate to apply the net result of the decision on Project Triathlon to the Wood Decision by way of set-off as the steps set out in HS Works were once again not satisfied.
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