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London Build

21 Sep 2023

Welsh county ordered to pay Alun Griffiths £3.3m

Welsh county ordered to pay Alun Griffiths £3.3m

The High Court has ordered a Welsh council to pay Alun Griffiths £3.3m – and dismissed its argument for postponing payment as “spurious”.

In an earlier adjudication, Carmarthenshire County Council was found to have owed £3,316,487.55 to Alun Griffiths in relation to the contractor’s work on the A48 road.

Carmarthenshire originally agreed to pay the sum if it was provided with a VAT invoice and a guarantee from Alun Griffiths’ parent company Tarmac that any money the council was owed by the firm would be paid.

However, the council later argued that it should not be forced to pay the amount pending the outcome of a separate ‘true value’ adjudication it is seeking against Alun Griffiths.

Alun Griffiths launched legal action to have the adjudication enforced through a summary judgement, but the council applied for a ‘stay of execution’ to have enforcement delayed until it had brought its own adjudication proceedings.

The council argued that Alun Griffiths is insolvent and that a guarantee from Tarmac did not adequately protect it against future losses if a subsequent adjudication found in its favour, as Tarmac is also “balance-sheet insolvent”.

A witness for Alun Griffiths, though, pointed out that Tarmac’s parent company, CRH, made a post-tax profit of £2.18bn in 2022, with net assets of £18bn and cash reserves of £4.76bn. He said there was no clear commercial reason why CRH would withdraw financial support from Tarmac.

Ruling on the case, Justice Pepperall said that Tarmac’s guarantee “more than protects the council’s position”, and that Carmarthenshire’s argument had “no merit whatsoever”. He said the adjudication of £3.3m should be enforced, with Carmarthenshire paying costs for the proceedings.

He added: “It was unreasonable [of the council] to a high degree to promise payment in the event that it was provided with a VAT invoice and correct calculation, only then to raise spurious objections to the guarantee provided.”

A spokesperson for Carmarthenshire County Council said: “The award related to a ‘smash and grab’ adjudication.

“The council is currently pursuing a true value claim in relation to the proper value of Alun Griffiths’ works. In these circumstances it would be inappropriate to comment at this time.”

Alun Griffiths has not responded to a request for comment.

Source: Construction News

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