In Mentmore v Packman Mentmore engaged Packman as project engineers. In December 2007 the works were suspended due to planning issues. In April 2009 Packman commenced adjudication proceedings in respect of unpaid fees up to the date of suspension. As Mentmore had failed to serve any valid Withholding Notices Packman was awarded £400K. When Mentmore failed to pay, Packman issued Court Proceedings and obtained judgment in its favour. Mentmore again failed to pay so Packman obtained charging orders against Mentmore’s assets.
Mentmore then issued its own Court Proceedings seeking declarations in respect of the amounts properly due to Packman. Packman sought and obtained an order staying these Court Proceedings on the basis that the previous judgment in its favour had still not been satisfied. The Court considered that issuing a claim without paying a prior judgment amounted to unreasonable and oppressive behaviour. Mentmore then commenced its own adjudication proceedings. Packman sought an injunction. The injunction was granted.
The Court found that it did have jurisdiction to award an injunction, and there was no reason why an injunction should not be awarded in the same way as for Court Proceedings. However, what amounted to “unreasonable and oppressive behaviour” may be different – it depended on the facts. Here, Mentmore was seeking to avoid the “pay now argue later” approach enshrined in the Construction Act, and it was unjust for Mentmore to pursue its own adjudication when it had failed to pay the previous judgment obtained by Packman.
COMMENT
Whilst the Construction Act states that a party may refer a dispute to adjudication “at any time”, the Court said this was no different to a litigant being able to commence Court Proceedings at any time, subject to any relevant limitation period. Although the Court has previously indicated that seeking an injunction is not the correct approach to take by parties challenging e.g. the jurisdiction of an adjudicator or claiming an anticipatory breach of natural justice, the Mentmore decision is clear authority that an injunction can be sought in certain circumstances.
