Injunctions & Adjudication

The Technology and Construction Court has granted an injunction preventing a claimant from taking steps in adjudication proceedings. This is a rarely sought application and it is even less likely to be granted. Here's why:

Background

Three Limited companies (Mentmore Towers, Good Start and Anglo Swiss Holdings - 'Mentmore') were set up by a family trust in Jersey. They acquired and sought to develop the 'In and Out Club' in Piccadilly and the Mentmore Towers in Buckinghamshire. They engaged Packman Lucas as their structural engineer.

Work commenced under a consultancy agreement until the developments encountered planning difficulties. By this stage Packman was owed significant amounts and was not being paid.

Adjudication 1

In April 2009 Packman referred the matter of unpaid fees to adjudication. Mentmore had not issued any payment or withholding notices. Packman was successful due to the lack of withholding notices and obtained three awards, against the three companies, amounting to £419,715 in unpaid fees. Mentmore did not pay.

Enforcement

Packman successfully enforced the adjudicator's decisions, outside of jurisdiction, and obtained Charging Orders. Mentmore still refused to pay.

Litigation

Mentmore commenced proceedings alleging that Packman had been overpaid by £420,000. It is apparent that Mentmore did not consider that it was bound to pay the adjudicator's awards, on the grounds of lack of withholding, when it considered that the underlying dispute would swing the balance back toward Mentmore.

Mr Justice Akenhead identified exceptional circumstances and ordered that proceedings be stayed until Mentmore complied with the adjudicator's decisions. Mr Justice Akenhead considered that Mentmore's disregard of the 'pay now argue later' ethos of the Construction Act in order to secure an unfair commercial advantage in the proceedings. This was unacceptable.

Mr Justice Akenhead suspected that the claim was grossly inflated. Mentmore put forward claims they knew nothing of. This was in bad faith. The court restored the equal footing the parties would have been on had Mentmore observed the adjudicator's decisions.

Adjudication 2

Mentmore were not concerned with the court's decision and referred the matter to adjudication in the alternative. This is in spite of Mr Justice...