Interim payment under CPR 25 ordered in construction case

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    Interim payment under CPR 25 ordered in construction case

    O’Farrell J in the TCC has granted a claimant’s application for an interim payment (under CPR 25) in a defects case.

    In doing so, the court identified the relevant principles to be applied in such applications, as follows:

    • The court must be satisfied on the balance of probabilities that, if the claim went to trial on the basis of the evidence currently before it, the claimant would obtain judgment for a substantial amount of money. It is not sufficient for the claimant merely to show that it is likely that it will do so (Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners [2012] EWCA Civ 57).

    • Whether the amount of money is substantial or negligible must be determined in the context of the total claim made (FII Group Litigation).

    • The court should not conduct a mini trial, and an application for interim payment is not appropriate where the issues of fact and/or law are complex, but the application may be entertained if the claimant can establish that it would succeed on an “irreducible minimum part” of the claim (Schott Kem Ltd v Bentley [1991] QB 61 and Trebor Bassett Holdings Ltd v ADT Fire and Security plc [2012] EWHC 3365 (TCC)).

    The court was satisfied, on the evidence before it, that there was no defence to several allegations and that a deed of collateral warranty appeared to impose an obligation on the defendant. The defendant could not point to further investigations that it wished to carry out. It was incumbent on a respondent to an application for interim payment to provide details of the case that it relied on as giving it a real prospect of successfully defending the claim.

    As the claimant would likely obtain judgment for £430,000 (against £511,212 claimed), a reasonable proportion for an interim payment was £300,000.

    Interim payments are not common in commercial litigation. However, this case indicates that even in what seem like factually and technically complex cases they may be appropriate.

    Case: Triuva Kapitalverwaltungsgesellschaft v Galliford Try Construction Ltd [2017] EWHC 275 (TCC).

    Practical Law PLC 7.12.17