Providence Building Services Limited v Hexagon Housing Association Limited – The case for a stay

Peter Jansen talks readers through the recent Court of Appeal decision to overturn a Technology and Construction Court concerning the validity of the termination of the contract.

On the 15^th August 2024, the Court of Appeal (“CA”) made a ground breaking decision in Providence Building Services Limited v Hexagon Housing Association Limited [2024] EWCA Civ 962: overturning the first instance judgment in the Technology and Construction Court concerning the validity of the termination of the contract.

See our article for further information here.

Since that judgment, Hexagon (the “employer”) sought to obtain leave to appeal to the Supreme Court. Leave was granted on 24 November 2024.

On 10 November 2025, the Supreme Court heard the employer’s appeal against the CA’s judgment, and that decision is still eagerly awaited.

This article concerns Providence (the “contractor”) application to stay enforcement of a separate subsequent adjudicator’s award, which the employer obtained following the CA judgment.

The CA’s decision cleared the way for the contractor to proceed with terminating its employment and providing its termination account.

The employer rejected the contractor’s termination account and on 17 January 2025 the contractor started an adjudication for the amount due.

On 30 April 2025 the adjudicator ordered payment of the amount due, but the employer did not pay.

The contractor started summary judgment proceedings in the Mayor’s and City of London Court to enforce the adjudicators award.

The employer did not contest the application but sought a stay of the judgment pending the Supreme Court determination arguing that the contractor’s impecuniosity meant that, if the appeal was allowed by the Supreme Court, it would be unable to repay the amount of the summary judgment.

The contractor argued that if a stay was ordered, it would face winding up, prejudicing its participation in the Supreme Court appeal and giving the employer a “victory by default”.

The court granted the employer’s stay until the Supreme Court makes its decision. In coming to that decision, the court considered a number of principles.

“Special Circumstances”

CPR 83.7(4) of the Civil Procedure Rules provides the court a discretion to stay enforcement of a judgment if:

• There are special circumstances which render it inexpedient to enforce the judgment or order; or
• the applicant is unable from any reason to pay the money,

then…the court may by order stay the execution of the judgment or order, either absolutely or for such period and subject to such conditions as the court thinks fit.

The judge considered that any question of a stay should balance the interests of the judgment creditor and judgment debtor and consider whether payment can be better achieved by the court controlling the creditor’s rights of enforcement.

Adjudication enforcement and stay: Wimbledon Construction Company 2000 Limited v Derek Vago [2005] EWHC 1086

The application for a stay was based on the principles set out in Wimbledon v Vago which included that:

• Adjudication awards are debts due and a claimant (being the successful party in the adjudication) should not be kept out of its money.
• The probable inability of a party to repay the judgment sum may constitute “special circumstances” within CPR 83.7(4).

In this case, a claimant’s probable inability to repay might make a stay appropriate under “special circumstances” as if the contractor lost in the Supreme Court, then it would need to, but not be able to, repay those sums.

The court considered the worsening financial position of the contractor since it entered the contract, albeit ultimately the risk of the employer facing an irrecoverable loss was considered greater than the risk of the contractor’s insolvency.

“Manifest Injustice”

The contractor argued that to grant a stay would, given its looming insolvency, cause “manifest injustice”. The court considered the following:

1. The contractor had been aware since 24 November 2024 that the employer had obtained permission from the Supreme Court to bring its appeal. It was fully aware of the risk that the Supreme Court might allow the appeal.  It was the contractor alone who had decided to incur the cost of the second adjudication, knowing that the award might be clawed back by the appeal.
2. The contractor had the merits of the case and this should be relevant to the court’s discretion to grant a stay. Given that this was a summary application, the relevant “merits” of a decision to grant or to refuse a stay, was based on the likely outcome of the appeal. The judge accepted that the question of merits had in effect already been decided because the Supreme Court had granted permission for the employer’s appeal to proceed. This meant that the employer had already met the threshold for bringing an appeal by having an arguable point of law of general public importance. That also meant that the employer’s case met the test on a summary judgment application of having a reasonable prospect of success.
3. The proposed order for the stay was modest and limited to the minimum period necessary to align with any decision from the Supreme Court. Again, if the contractor was entitled to the award, the risk of winding up was low.

Key Takeaways

• Absence special circumstances, the courts will try to enforce adjudication awards as debts due and the principles in Wimbledon v Vago remain pertinent where there are arguments of staying an enforcement and the risk of insolvency.
• The contractor was deemed to have taken the risk of incurring significant cost in the knowledge that the employer had already obtained leave to appeal. Initiating an adjudication in similar circumstances therefore should not be taken lightly.
• Being able to seek a stay of a definitive and limited duration may sway the court towards granting a stay particularly where the reasons for this are related to appellate proceedings which could impact on the outcome.