In this case, Mentmore engaged structural engineers Packman in respect of two developments. However, during the project, Mentmore encountered planningdifficulties, which led to the project being abandoned. This left Mentmore owing Packman significant fees.
Packman sought to recover its outstanding fees by commencing an adjudication against Mentmore. The adjudicator decided that, as Mentmore had failed to issue an
effective withholding notice, it should pay Packman’s fees in the sum of £420,000.
Mentmore failed to comply with the adjudicator’s decision. As such, Packman issued summary judgement proceedings and the court enforced the adjudicator’s decision. Mentmore still failed to pay. Eventually, charging orders were registered.
The day before the charging orders were registered, Mentmore issued court proceedings, claiming that it had overpaid Packman. The judge considered that there were exceptional circumstances involving “bad faith” on the part of Mentmore by its failure to honour the adjudicator’s decision and the court’s judgement. For this reason, the court halted the court case until Mentmore had paid Packman and thereby satisfied both the adjudicator’s decision and the court’s judgement.
A few months later, Mentmore commenced an adjudication against Packman. In the first adjudication commenced by Packman, the adjudicator had not reviewed themerits of Mentmore’s position as to why it considered the fees were not payable simply because he found that there had been no valid withholding. Notwithstanding this, in the second adjudication, Mentmore requested that the adjudicator review and decide the merits of Mentmore’s position.
Understandably, Packman was not content to deal with a further adjudication on substantially, if not the same, issue and sought an injunction from the court to restrain Mentmore from pursuing the adjudication. The question for the judge was whether the court had the power to restrain a party from pursuing an adjudication by way of an injunction.
The judge decided that the court did have the requisite power and ordered that Mentmore be restrained from pursuing the adjudication further, until the adjudicator’s
decision and subsequent judgement in favour of Packman had been satisfied by Mentmore. In doing so, the court effectively curtailed Mentmore’s right to adjudicate “at any time”. The court was not prepared to allow Mentmore to circumvent the machinery and policy of the Construction Act by its attempts to adjudicate.
Kate Onions is a solicitor at HBJ Gateley Wareing.