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England and Wales High Court (Technology and Construction Court) Decisions
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Cite as:  EWHC 936 (TCC)
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
London, EC4A 1NL
B e f o r e :
| BEXHEAT LIMITED
|- and -
|ESSEX SERVICES GROUP LIMITED
Lucie Briggs (instructed by Druces LLP) for the Defendant
Hearing date: 13th January 2022
Crown Copyright ©
"Covid-19 Protocol: This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Tuesday 19th April 2022 at 2:00pm"
Mrs Justice O'Farrell:
i) the true value of the application payment the subject of the Second Adjudication Decision had already been determined in an earlier adjudication by another adjudicator, Mr Cope ("the First Adjudication");
ii) ESG has a contractual entitlement to set off or make deductions against the adjudicator's award in respect of any amounts which may at any time be due or have become due from BHL to ESG;
iii) BHL deprived ESG of its contractual right to elect to have the true value of the application payment in dispute determined at the same time by the same adjudicator as the notified sum dispute;
iv) the adjudicator had no jurisdiction to award compensation pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 ("the 1998 Act") and that part of the award should not be enforced.
i) there is a real risk that any subsequent determination requiring return of any part of the judgment sum would go unsatisfied by reason of BHS's financial position; and/or
ii) BHL has organised its financial affairs with the purpose of dissipating or disposing of the judgment sum.
"19.4 In accordance with the dates specified in the Second Schedule (or as the Parties otherwise agree), the Sub- subcontractor shall as a condition precedent to being paid submit an application for payment for work carried out specifying the sun the Sub-subcontractor considers to be due and the basis on which it has been calculated 7 days before the end of the calendar month ("Interim application"). The payment due date in relation to each payment to be made under this Sub-subcontract will be the last calendar day of the month of a valid interim application (the "Due Date").
19.5 Within 15 days of the last calendar date of the month of a valid Interim Application, the Sub-Contractor may give to the Sub-subcontractor a notice specifying the sum that the Sub-Contractor considers to be due as at the payment due date and the basis on which it has been calculated ("Payment Notice").
19.6 Subject to clauses 19.7 and 19.8, the Sub-Contractor shall pay to the Sub-subcontractor on or before the final date for payment the amount specified in the Payment Notice in accordance with clause 19.5 or, if no such notice is given, the amount specified in the Interim Application.
19.7 Not later than one working day before the Final Date for Payment, the Sub-Contractor may give to the Sub-subcontractor a notice of its intention to pay less than the amount which becomes due under clause 19.6 specifying the sum that the Sub-Contractor considers to be due on the date the notice is given and the basis upon which it has been calculated ("Pay-Less Notice"). In such a case the amount due will be the amount specified in the Sub-Contractor's notice under clause 19.7.
19.8 The final date for payment of any amount which becomes due under an Interim Application is 45 days after the Due Date ("Final Date for Payment"). The Sub-Contractor shall pay to the Sub-subcontractor the sum stated in the Pay Less Notice on or before the Final Date for Payment.
19.9 For the avoidance of doubt all payments made in respect of and in response to Interim Applications shall be on account only and not conclusive as to the final value of any part thereof."
"30.1 Any dispute or difference between the Parties arising from, under or in connection with this Sub-Subcontract may be referred to adjudication at any time by either Party and the adjudication shall be conducted in accordance with the Scheme for Construction Contracts (England and Wales) Regulations 1998 (or as amended), save that the appointed Adjudicator shall also have the power to decide how the Party's legal costs of the adjudication shall be paid.
30.2 The Sub-Contractor shall be entitled to set off or make deductions against an Adjudicator's award in respect of any amounts which may at any time be due or have become due from the Sub-Subcontractor to the Sub-Contractor under the Sub-Subcontract or otherwise.
30.3 If the Sub-Contractor shall so elect the Adjudicator shall be entitled to adjudicate on more than one dispute at the same time and the parties agree that the Adjudicator shall so have jurisdiction and shall be entitled to set off one decision against another."
The First Adjudication
"1. That the true value of BHL's Application for Payment Number 22 dated 16 July 2021 is £2,010,121.83, plus any applicable VAT or such other value as the Adjudicator shall decide.
2. That the Respondent, ESG, shall pay to BHL on 13 September 2021 (the final date for payment of AFP22) the sum of £797,423.01 plus any applicable VAT or such other sum as the Adjudicator shell determine.
. Should ESG fail to make payment of the sum due to BHL on 13 September 2021 that BHL is entitled to payment of interest in accordance with clause 19.18 of the Sub-Subcontract.
. That BHL is entitled to be reimbursed compensation of £100.00 as compensation in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, as amended, or such other sum as the Adjudicator shall determine.
. That the Respondent immediately pays or reimburses the fees and expenses of the Adjudicator. "
"10.1.1 That the true value of BHL's application for payment 22 is £8,740.553, or such other sum as the adjudicator may decide;
10.1.2 That BHL is not entitled to any further payment at this time under application for payment 22 dated 19 July 2021;
10.1.3 That BHL pay the adjudicators fees and expenses; and
10.1.4 The adjudicator gives reasons for his decisions."
"4. The dispute concerns the true value of BHL's interim application for payment 22 dated 19th July 2021 ("AP22"), and BHL's entitlement to payment.
5. BHL valued the Sub-Subcontract Works, including the measured works, preliminaries, variations and claims, in the gross sum of £1,832,071.87 in AP22 and sought payment of the sum of £678,885.78. In ESG's Payless Notice issued on 13th August 2021 ESG valued the Sub-Subcontract Works in the sum of £1,170,729.19, and stated that the sum due for payment was £4,808.44. There is no dispute as to the validity of ESG's Payless Notice.
6. BHL now claims that the true value of the Sub-Subcontract Works set out in AP22 is £2,010,121.742 and that, taking into account the sums previously paid by ESG, it is entitled to payment of £797,423,01 in this adjudication. ESG now submits that the true value is £1,031,700.00, and that the resulting sum due is £3,932.11.
7. The difference between the parties' valuations mainly results from differing valuations of the variations and BHL's claims in the form of direct additional costs …
8. ESG notes that it currently has a contra-charge account against BHL in the current sum of £75,252.04, but it accepts that as this was not deducted in its Payless Notice issued against AP22 it falls outside the scope of this adjudication."
i) the true value of Interim Application 22 was £1,319,830.61;
ii) BHL was entitled to payment of £141,646.35 plus VAT;
iii) BHL was entitled to interest pursuant to the Contract but not under the Late Payment of Commercial Debts (Interest) Act 1998;
iv) BHL should pay 35% of the adjudicator's fees and ESG should pay 65% of the adjudicator's fees.
The Second Adjudication
i) that the notice given on 13 October was in form and substance an effective Pay Less Notice;
ii) that BHL was not entitled to any further payment;
iii) that BHL pay the adjudicator's fees and expenses; and
iv) the adjudicator gives reasons for his decision.
i) ESG failed to issue a valid Pay Less Notice in response to Interim Application 23;
ii) ESG should pay BHL the sum of £706,029.62 plus VAT;
iii) BHL was entitled to contractual interest and statutory compensation of £100 under the 1998 Act; and
iv) ESG was liable for the adjudicator's fees and expenses.
Abortive third adjudication
i) whether the 'true value' of Interim Application 23 was determined in the First Adjudication, with the result that Mr Silver had no jurisdiction to determine the payment due under Interim Application 23 in the Second Adjudication Decision and/or ESG satisfied its payment obligations in respect of the same;
ii) whether ESG has an entitlement under clause 30.2 of the Contract to set off or make deductions against the Second Adjudication award in respect of any amounts which may at any time be due or have become due from BHL to Essex;
iii) whether ESG was entitled under clause 30.3 of the Contract to elect to have the 'true value' of the application payment in dispute determined at the same time by the same adjudicator as the 'notified sum' dispute;
iv) whether Mr Silver had jurisdiction to award to BHL £100 compensation pursuant to the 1998 Act; if not, whether that part of the award should be severed;
v) whether enforcement of any judgment should be stayed, having regard to any risk that any subsequent judgment requiring return of the sum paid would go unsatisfied, or to avoid any manifest injustice.
i) Andrew Bailey, the managing director of BHL – first statement dated 23 November 2021 and second statement dated 30 December 2021;
ii) Anthony Cassidy, the commercial director of ESG – statement dated 16 December 2021;
iii) Daniel Djanogly, forensic accountant – report on the financial affairs of BHL dated 15 December 2021;
iv) Andrew Hider, managing director of ESG – statement dated 6 January 2022.
Applicable legal principles
"(a) The parties are bound by the decision of an adjudicator on a dispute or difference until it is finally determined by court or adjudication proceedings or by an agreement made subsequently by the parties.
(b) The parties cannot seek a further decision by an adjudicator on a dispute or difference if that dispute or difference has already been the subject of a decision by an adjudicator.
(c) The extent to which a decision or a dispute is binding will depend on an analysis of the terms, scope and extent of the dispute or difference referred to adjudication and the terms, scope and extent of the decision made by the adjudicator. In order to do this the approach has to be to ask whether the dispute or difference is the same or substantially the same as the relevant dispute or difference and whether the adjudicator has decided a dispute or difference which is the same or fundamentally the same as the relevant dispute or difference.
(d) The approach must involve not only the same but also substantially the same dispute or difference. This is because disputes or differences encompass a wide range of factual and legal issues. If there had to be complete identity of factual and legal issues then the ability to re-adjudicate what was in substance the same dispute or difference would deprive Clause 39A.7.1 of its intended purpose.
(e) Whether one dispute is substantially the same as another dispute is a question of fact and degree."
" In my view, the purpose of the 1996 Act would be substantially defeated if a responding party could, as a matter of course, reserve its position on jurisdiction in general terms at the start of an adjudication, thereby avoiding any ruling by the adjudicator or the taking of any remedial steps by the referring party; participate fully in the nuts and bolts of the adjudication, either without raising any detailed jurisdiction points, or raising only specific points which were subsequently rejected by the adjudicator (and the court); and then, having lost the adjudication, was allowed to comb through the documents in the hope that a new jurisdiction point might turn up at the summary judgment stage, in order to defeat the enforcement of the adjudicator's decision at the eleventh hour. …
 In my view, informed by that starting-point, the applicable principles on waiver and general reservations in the adjudication context are as follows:
i) If the responding party wishes to challenge the jurisdiction of the adjudicator then it must do so "appropriately and clearly". If it does not reserve its position effectively and participates in the adjudication, it will be taken to have waived any jurisdictional objection and will be unable to avoid enforcement on jurisdictional grounds (Allied P&L).
ii) It will always be better for a party to reserve its position based on a specific objection or objections: otherwise the adjudicator cannot investigate the point and, if appropriate, decide not to proceed, and the referring party cannot decide for itself whether the objection has merit (GPS Marine).
iii) If the specific jurisdictional objections are rejected by the adjudicator (and the court, if the objections are renewed on enforcement), then the objector will be subsequently precluded from raising other jurisdictional grounds which might otherwise have been available to it (GPS Marine).
iv) A general reservation of position on jurisdiction is undesirable but may be effective… Much will turn on the wording of the reservation in each case. However, a general reservation may not be effective if:
i) At the time it was provided, the objector knew or should have known of specific grounds for a jurisdictional objection but failed to articulate them (Aedifice, CN Associates);
ii) The court concludes that the general reservation was worded in that way simply to try and ensure that all options (including ones not yet even thought of) could be kept open (Equitix)."
Impact of the First Adjudication Award
"(1) … where a payment is provided for by a construction contract, the payer must pay the notified sum (to the extent not already paid) on or before the final date for payment.
(3) The payer or a specified person may in accordance with this section give to the payee a notice of the payer's intention to pay less than the notified sum.
(4) A notice under subsection (3) must specify –
(a) the sum that the payer considers to be due on the date the notice is served, and
(b) the basis on which that sum is calculated.
It is immaterial for the purposes of this subsection that the sum referred to in paragraph (a) or (b) may be zero.
(6) Where a notice is given under subsection (3), subsection (1) applies only in respect of the sum specified pursuant to subsection (4)(a)."
"The Sub-Contractor shall be entitled to set off or make deductions against an Adjudicator's award in respect of any amounts which may at any time be due or have become due from the Sub-Subcontractor to the Sub-Contractor under the Sub-Subcontract or otherwise."
"(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.
(3) The contract shall provide in writing that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.
(5) If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts apply."
"21 In the absence of any directions by the adjudicator relating to the time for performance of his decision, the parties shall be required to comply with any decision of the adjudicator immediately on delivery of the decision to the parties.
23(2) The decision of the adjudicator shall be binding on the parties, and they shall comply with it until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement between the parties."
"The intended purpose of s.108 is plain… The contract must be construed so as to give effect to the intention of Parliament rather than to defeat it. If that cannot be achieved by way of construction, then the offending clause must be struck down. "
"Drawing all these threads together, I reach the following broad conclusions on the issues arising where a party seeks to set-off against or withhold from sums which an adjudicator has said are to be paid or are payable:
(a) The first exercise should be to interpret or construe what the adjudicator has decided. In that context, one can look at the dispute as it was referred to him or her. That can involve looking at the Notice of Adjudication, the Referral Notice, the Response and other "pleading" type documents. One can have regard to the underlying construction contract. Primarily, one needs to look at the decision itself.
(b) In looking at what the adjudicator decided, one can distinguish between the decisive and directive parts of the decision on the one hand and the reasoning on the other, although the decisive and directive parts need to be construed to include other findings which form an essential component of or basis for the decision (see Hyder).
(c) The general position is that adjudicators' decisions which direct that one or other party is to pay money are to be honoured and that no set-off or withholding against payment of that amount should be permitted.
(d) There are limited exceptions. If there is a specified contractual right to set-off which does not offend against the statutory requirement for immediate enforcement of an adjudicator's decision, that is an exception albeit that it will be a relatively rare one. Where an adjudicator is simply declaring that an overall amount is due or is due for certification, rather than directing that a balance should actually be paid, it may well be that a legitimate set-off or withholding may be justified when that amount falls due for payment or certification in the future. (See Squibb).
(e) Where otherwise it can be determined from the adjudicator's decision that the adjudicator is permitting a further set-off to be made against the sum otherwise decided as payable, that may well be sufficient to allow the set-off to be made (see Balfour Beatty)."
Joinder of disputes
"If the Sub-Contractor shall so elect the Adjudicator shall be entitled to adjudicate on more than one dispute at the same time and the parties agree that the Adjudicator shall so have jurisdiction and shall be entitled to set off one decision against another."
"8(1). The adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract.
20. The adjudicator shall decide the matters in dispute. He may take into account any other matters which the parties to the dispute agree should be within the scope of the adjudication or which are matters under the contract which he considers are necessarily connected with the dispute."
"… Both the HGCRA and the Amended Act create a hierarchy of obligations, as discussed earlier. The immediate statutory obligation is to pay the notified sum as set out in section 111. As required by section 108 of the Amended Act, the contract also contains an adjudication regime for the resolution of all disputes, including any disputes about the true value of work done under clause 4.7. As a matter of statutory construction and under the terms of this contract, the adjudication provisions are subordinate to the payment provisions in section 111. Section 111 (unlike the adjudication provisions of the Act) is of direct effect. It requires payment of a specific sum within a short period of time. The Act has created both the prompt payment regime and the adjudication regime. The Act cannot sensibly be construed as permitting the adjudication regime to trump the prompt payment regime. Therefore, both the Act and the contract must be construed as prohibiting the employer from embarking upon an adjudication to obtain a re-valuation of the work before he has complied with his immediate payment obligation."
" … it seems to me consistent with the policy underlying the adjudication regime that a defendant who has discharged his immediate obligation should generally be entitled to rely upon a subsequent true value adjudication and that a defendant who has not done so should not be entitled to do so. In answer to the question whether a person who has not discharged his immediate obligation should be entitled to rely upon a later true value decision by way of set-off or counterclaim in order to resist the enforcement of his immediate obligation I would give a policy-based answer that, in my view, he should not be entitled to do so since that would enable a defendant who has failed to implement the Payment or Payless Notice provisions to string the claimant along while he goes about getting the true value adjudication decision rather than discharging his immediate obligation and then returning if and when he has obtained his true value decision. In my judgment, the passages I have cited from Harding (at first instance and in the Court of Appeal) are at least consistent with and provide support for the policy-based approach I have outlined. Adopting a phrase from  of the judgment of Coulson J in Grove at first instance "the second adjudication cannot act as some sort of Trojan horse to avoid paying the sum stated as due".
 To my mind these statements are clear and unequivocal: the employer becomes free to commence his true value adjudication when (and only when) he has paid the sum ordered to be paid by the earlier adjudication.
 I recognise that the relevant section of the judgment of the Court of Appeal in Grove is technically obiter. However, it was provided after full argument and was expressly intended to provide authoritative guidance on an issue that Coulson J had decided in the contractor's favour. I would feel obliged to follow it even if I did not agree with it. As it happens I agree with the reasoning and the outcome.
 In my judgment, it should now be taken as established that an employer who is subject to an immediate obligation to discharge the order of an adjudicator based upon the failure of the employer to serve either a Payment Notice or a Pay Less Notice must discharge that immediate obligation before he will be entitled to rely upon a subsequent decision in a true value adjudication. Both policy and authority support this conclusion and that it should apply equally to interim and final applications for payment.
 The decisions of Coulson J and the Court of Appeal in Grove are clear and unequivocal in stating that the employer must make payment in accordance with the contract or in accordance with section 111 of the Amended Act before it can commence a 'true value' adjudication…"
i) where a valid application for payment has been made, an employer who fails to issue a valid Payment Notice or Pay Less Notice must pay the 'notified sum' in accordance with section 111 of the 1996 Act;
ii) section 111 of the 1996 Act creates an immediate obligation to pay the 'notified sum';
iii) an employer is entitled to exercise its right to adjudicate pursuant to section 108 of the 1996 Act to establish the 'true valuation' of the work, potentially requiring repayment of the 'notified sum' by the contractor;
iv) the entitlement to commence a 'true value' adjudication under section 108 is subjugated to the immediate payment obligation in section 111;
v) unless and until an employer has complied with its immediate payment obligation under section 111, it is not entitled to commence, or rely on, a 'true value' adjudication under section 108.
Application for stay of enforcement
"(a) Adjudication (whether pursuant to the 1996 Act or the consequential amendments to the standard forms of building and engineering contracts) is designed to be a quick and inexpensive method of arriving at a temporary result in a construction dispute.
(b) In consequence, adjudicators' decisions are intended to be enforced summarily and the claimant (being the successful party in the adjudication) should not generally be kept out of its money.
(c) In an application to stay the execution of summary judgment arising out of an adjudicator's decision, the court must exercise its discretion under Order 47 with considerations (a) and (b) firmly in mind (see AWG).
(d) The probable inability of the claimant to repay the judgment sum (awarded by the adjudicator and enforced by way of summary judgment) at the end of the substantive trial, or arbitration hearing, may constitute special circumstances within the meaning of Order 47 rule 1(1)(a) rendering it appropriate to grant a stay (see Herschell).
(e) If the claimant is in insolvent liquidation, or there is no dispute on the evidence that the claimant is insolvent, then a stay of execution will usually be granted (see Bouygues and Rainford House).
(f) Even if the evidence of the claimant's present financial position suggested that it is probable that it would be unable to repay the judgment sum when it fell due, that would not usually justify the grant of a stay if:
(i) the claimant's financial position is the same or similar to its financial position at the time that the relevant contract was made (see Herschell); or
(ii) The claimant's financial position is due, either wholly, or in significant part, to the defendant's failure to pay those sums which were awarded by the adjudicator (see Absolute Rentals)."
"(g) If the evidence demonstrates that there is a real risk that any judgment would go unsatisfied by reason of the claimant organising its financial affairs with the purpose of dissipating or disposing of the adjudication sum so that it would not be available to be repaid, then this would also justify the grant of a stay."
"It was, of course, not my intention that this summary should be set in stone. It was simply a summary of the main points established by the cases up to that time. It does not, for example, deal with the position where allegations of fraud are made, particularly in circumstances where those might affect the financial standing of the referring party (who is almost always the party opposing the stay)."
"I believe that, even if ESG is able to obtain an adjudicators decision or court decision, valuing BHLs account, that BHL will not repay the money. Instead they will either have dissipated the money by moving money out of the company or otherwise disposing of the money. BHL is a small company with only one director who is also the sole shareholder and has no employees so is basically one of those small construction companies that is used as a directors personal business. BHL has already made it clear that it will only repay monies "in due course" in the letter from Mr Michael Harris on Friday 10 October 2021, a copy of which is produced at Exhibit AC7. They have refused to provide management accounts, stating that BHL does not have management accounts, and the account information publicly available for BHL is 18 months out of date. BHL should by now be preparing its accounts to file its Corporation Tax returns and therefore there is no reason for it to not provide draft accounts to the court. Nothing that I have seen in the responses from Mr Harris gives me comfort that ESG will ever see the money again."
i) BHL has refused to disclose any financial information to demonstrate the current state of affairs. No accounts have been filed for the last financial year, BHL has refused to provide any draft accounts and no management accounts have been disclosed. The inference is that the financial position of BHL has worsened.
ii) Net current assets as of 2020 accounts were just over £100,000, slightly down on the previous year. Profitability has decreased between 2019 and 2020 from 4.62% of turnover to 2.99%. BHL's latest credit rating recommends a maximum credit of £49,000 and that it is of "Higher than Average Risk".
iii) Over the past 3 years BHL appears to have been mainly financed by debt and BHL admits to currently using a factoring company to finance its operations. There has been correspondence from Shire, the factoring company, informing ESG that all monies due should be paid to them.
iv) Mr Cassidy's evidence is that BHL has only one other live contract which is "in considerable delay". Whilst Mr Bailey's evidence is that BHL has carried out work for other contractors and states his plans to increase turnover, he has not given any details of current projects.
v) BHL has a sole director and there is no protection against Mr Bailey distributing the funds to himself and closing the company. It is noted that in the accounts for year ended 31 May 2020 it appears that almost the entire operating profit of the company (£179,507 against operating profit of £182,113) has been dissipated, presumably to Mr Bailey as sole director, either as remuneration (£12,500), "distributions to owners" (£78,807) or Dividends (£88,200).
"BHL has been running successfully for nearly eight years and has in that time carried out six substantial projects for ESG itself. 4 of these have been over one million in value, a number of them have required more than 20/30 men on site at any one time and two of these BHL have been engaged to help ESG out of trouble as their previous subcontractors have either proved inadequate, walked off the project or gone into liquidation. BHL has never failed to complete a project for ESG.
Outside of its business with ESG, BHL also carries out work for a number of other tier one M&E contractors in the London region. The value of the contracts it has been engaged on vary from £750,000 - £2,000,000. BHL has, at various times, engaged up to 80 subcontractors at any one time plus supervision, management and office staff. Over the years I have turned the company into one with a £3 million plus turnover. My plans are to expand the business with ambitions to double that turnover in the next 3-5 years. Contrary to Mr Cassidy's insinuations, I have absolutely no intention at all to dissipate the hard-won resources or ruin the hard-won reputation of the business whether to spend those sums on my personal lifestyle or for any other reason. I find Mr Cassidy's suggestion that I would do so offensive.
I should also put on record that, in order to build the business over its 8-year history I have done nothing more than take a modest income from the business so as to support a decent living standard for myself and my family. In order to further build the business and provide security for myself and my family in later life, I have no intention to do any more than that for the foreseeable future."
i) BHL has not refused to provide management or other accounts to ESG. BHL is not required to, and does not, keep management accounts. Its next set of accounts are not due until February 2022 (after the date of the hearing), as Mr Djanogly's report confirms, and they have not yet been prepared.
ii) The accounts indicate that BHL's financial position has not changed significantly since the date of the Contract in 2019. Profit for 2019 was c.£104,000 as against profit for 2020 of c.£101,000. Profit as a percentage of turnover decreased between 2019 and 2020 because overall turnover increased, a sign of strength, rather than weakness.
iii) BHL has not sought to hide its use of factoring, which is usual in the industry. Where factoring is used, BHL provides ESG with the account details of the factoring company on the relevant invoices; where factoring is not used, BHL provides its own account details on invoices. That is consistent with the letter from Shire dated 22 November 2021, which requires ESG to make payment to Shire "[w]here the invoices are assigned to Shire."
iv) BHL is not obliged to provide further details of its business.
v) ESG's speculative assertion that Mr Bailey will dissipate any monies that it is required to pay is refuted by Mr Bailey's evidence.