Marbank Construction LTD v G & D Brickwork Contractors LTD

In Marbank Construction LTD v G & D Brickwork Contractors LTD (Technology and Construction Court, O'Farrell J, 28 June 2021) the contractor engaged the sub-contractor in relation to a number of projects. The sub-contractor started proceedings against the contractor in the Portsmouth County Court seeking payment in respect of alleged outstanding invoices in respect of three of the projects.

The claim was struck out and was not reinstated. The sub-contractor commenced three separate adjudications against the contractor for sums that it claimed were outstanding in respect of the three projects. Further adjudications had been intimated by the sub-contractor but not yet commenced. The three adjudications were ongoing at the time of the hearing of the contractor's application for injunctions.

O'Farrell J in rejecting the contractor's contention that the existing and the threatened adjudications were unreasonable and oppressive and in refusing to order injunctions stated that she was not satisfied that this would be an appropriate case in which to interfere with the adjudication process and that, applying the American Cyanamid principles, there was simply no serious issue to be tried.

As to the contractor's submission that the adjudications were vexatious because they raised the same or substantially the same dispute, payment for work done in respect of the three projects, that were the subject of the struck out Portsmouth County Court proceedings, the judge said that (i) It is correct that insofar as the adjudications trespassed on a decision that has already been made by the court, that effectively prevents the current adjudicator from having jurisdiction to determine the disputes but (ii) That is a matter that can and should be dealt with at the enforcement stage. As to the contractor's submission that the adjudications had only been commenced because the sub-contractor made a mess of the litigation, the judge said that (i) No doubt that was a point that was well made based on the limited information that the court has from the contractor's witness statement as to the former proceedings but (ii) The mere fact that a claim has been struck out does not necessarily preclude a claimant from then re-litigating. As to the contractor's submission that the adjudications appeared to be tactical, the judge said that (i) This court is alive to the fact that the parties in the context of adjudication will behave in a tactical manner and (ii) The same can be said of parties to litigation but (iii) Tactical behaviour in and of itself does not make the actions of any party either vexatious or oppressive.

The full text of the judgment of O'Farrell J

This the claimant's application dated 22 June 2021 for an injunction to prevent existing adjudications continuing or concluding and to prevent further adjudications from being commenced.

The claim is brought by the claimant, Marbank Construction Limited, against the first defendant, G&D Brickwork Contractors Limited, and the second defendant, Mohammed Haque, who has not played any part in this hearing, as the adjudicator in respect of the relevant adjudications.

The terms of the injunction sought are that:

• the first intended defendant must not take any further steps in relation to the three adjudications commenced against the intended claimant that have been referred to the second intended defendant, or take any steps to commence further adjudications against the intended claimant, that relate to the same or substantially the same dispute as was the subject of the court claim D00P0901;
• the second intended defendant must not take any further steps in his capacity as adjudicator in the existing adjudications referred to him to which Marbank and G&D are parties, including issuing decisions in those adjudications, or accept any further appointments as adjudicator that relate to the same or substantially the same dispute that was the subject of the claim D00P0901.
• The applicant, Marbank, is a construction contractor. The first respondent to the application, the first intended defendant, G&D, is a bricklaying sub-contractor. The second respondent, Mr Haque, is an adjudicator.
• Since about 2013, Marbank has engaged G&D as a sub-contractor in relation to a number of projects including:
• an Aldi Supermarket (the Chichester Project),
• a light industrial building (the Uxbridge Road Project), and
• offices and light industrial buildings (the Waxlow Road Project).

The projects all came to a conclusion by about 2016 to 2017.

A dispute arose between the parties in respect of the three projects. G&D started proceedings against Marbank in the Portsmouth County Court seeking payment in respect of alleged outstanding invoices in the sum of about £88,500. The claim was struck out on 27 July 2020. G&D issued an application for relief from sanctions but that was dismissed on 5 November 2020 following a hearing. G&D was ordered to pay Marbank's costs, to be assessed if not agreed. Marbank has confirmed to the court that the assessment of those costs is ongoing, but has not yet been concluded.

From May 2021, G&D commenced three separate adjudications against Marbank for sums that it claims are outstanding in respect of the three projects: the Chichester Project, the Uxbridge Road Project and the Waxlow Road Project. Further adjudications have been intimated by G&D against Marbank but not yet commenced. The three adjudications are currently ongoing; indeed, a decision in one of the adjudications is due today, with the others to follow over the next few weeks.

Against that background, Mr Shaw, counsel for Marbank, seeks the injunctions from the court to hold the ring, as he put it, pending an application by the claimant for a Part 8 determination of the jurisdiction and vexatious claim issues that it wishes to ventilate in respect of each of the adjudications. The basis for the application is that, as Mr Shaw submits, the adjudications are unreasonable and oppressive in circumstances where they are materially the same as the issues, the subject of the previous Portsmouth County Court proceedings, which were struck out.

The application is on notice, albeit limited notice, and Ms Drake represents the first defendant, G&D Brickwork Contractors Limited. She opposes the applications for the injunctions on the basis that they are properly instituted adjudication proceedings which G&D has a right to pursue, regardless of the previous failed County Court proceedings and regardless of the time that has elapsed since the dispute first arose.

The jurisdiction of the court is not in dispute. Section 37 of the Senior Courts Act 1981 provides that:

The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.

The court's power may be exercised where one party can show that the other party has invaded or threatens to invade a legal law equitable rights of the former for the enforcement of which the latter is amenable to the jurisdiction of the court; or where one party to an action has behaved or threatens to behave in a manner which is unconscionable.

It is not in dispute that that jurisdiction extends to the power to grant an injunction restraining a party from commencing or continuing adjudication proceedings that are unreasonable and oppressive, although the fact that a claim is being pursued by way of adjudication rather than litigation may affect the court's view as to whether or not it amounts to unreasonable and oppressive behaviour: Mentmore Towers Limited v Packman Lucas Limited [2010] EWHC 457 TCC, per Edwards-Stuart J, [14]-[23]; Twintec Limited v Volkerfitzpatrick [2014] EWHC 10 TCC, per Edwards-Stuart J, [63]-[73]; and Jacobs UK Limited and Skanska Construction UK Limited [2017] EWHC 2395 TCC, [31]-[32].

It is also not in dispute between the parties that it is only in very rare cases that the court will interfere in the adjudication process by way of injunctive relief: The Dorchester Hotel Limited v Vivid Interiors Limited [2009] EWHC 70 TCC, per Coulson J, as he then was, at [17]; Skymist Holdings v Grandlane Developments [2018] EWHC 3504, per Waksman J.

The court also has regard to the judgment of the Supreme Court in Bresco Electrical Services Limited (in Liquidation) v Michael J Lonsdale Electrical Limited [2020] UKSC 25, in which Lord Briggs set out in some detail the benefits of adjudication and the courts reluctance to interfere in the process of such proceedings.

Mr Shaw's main submission is that the existing and the threatened adjudications are unreasonable and oppressive. The court rejects that submission for the following reasons.

Firstly, Mr Shaw submits that the adjudications are vexatious because they raise the same or substantially the same dispute, payment for work done in respect of the three projects, that were the subject of the Portsmouth County Court proceedings. It is correct that, in so far as the adjudications trespass on a decision that has already been made by the court, that effectively prevents the current adjudicator from having jurisdiction to determine the disputes. However, that is a matter that can and should be dealt with at the enforcement stage, as explained by Lord Briggs in Bresco v Lonsdale (above) at [64].

Secondly, Mr Shaw submits that these proceedings in adjudication have only been commenced because G&D made a mess of the litigation. No doubt that is a point that is well made based on the limited information that the court has from Mr Williams' witness statement as to the former proceedings. However, as Ms Drake, counsel for G&D, submits, the mere fact that a claim has been struck out does not necessarily preclude a claimant from then re-litigating. It all depends on the circumstances: Hall v The Ministry of Defence [2013] EWHC 4092 QB; Davies v Carillion Energy Services Limited & Another [2017] EWHC 3206 QB.

Thirdly, Mr Shaw submits that there is no urgency in obtaining the adjudication decisions because the works were carried out between 2016 and 2017. The litigation in Portsmouth County Court went on for three and a half years. Even after the failed application for relief from sanctions, no action was taken by G&D for several months before commencing the recent adjudications. However, under the Housing Grants, Construction and Regeneration Act 1996 the defendant has a right to adjudicate at any time in respect of any disputes, subject to issues of jurisdiction, which the court has not been asked to determine. I accept Ms Drake's submission that it is not for the claimant to dictate the timing of the adjudications that have been launched by the defendant.

Fourthly, Mr Shaw submits that the adjudication pleadings are inconsistent with the way in which the case is put in the earlier County Court proceedings. That has prevented Marbank from recycling or reusing its papers from the litigation, involving it in additional costs. That may very well be an issue that arises if enforcement proceedings are necessary, but in and of itself it does not automatically make the current adjudications vexatious or oppressive.

Fifthly, Mr Shaw submits that the costs of the adjudication will be irrecoverable. However, as Ms Drake has submitted, that is simply a feature of adjudication. The adjudication process has been considered by the courts on many occasions and it is accepted that there are some disadvantages for certain parties in the adjudication process, but the benefits significantly outweigh the disadvantages when one considers the adjudication scheme as a whole.

Sixthly, it is submitted by Mr Shaw that the adjudications appear to be tactical. This court is alive to the fact that the parties in the context of adjudication will behave in a tactical manner. The same can be said of parties to litigation. However, tactical behaviour, in and of itself, does not make the actions of any party either vexatious or oppressive.

Further, Mr Shaw submits that the costs of the failed litigation remain unpaid. However, as Mr Shaw clarified for the court this morning, it is not submitted that G&D is in breach of any court order as of today's date. That is a very significant distinguishing feature from the position in Mentmore Towers, a case in which adjudications had been enforced against the claimants, and not only had the adjudications not been satisfied, but costs ordered by the court had not been paid. Those circumstances are absent from this case.

Finally, Mr Shaw submits that the court is being asked to grant the injunctions pending Marbank's Part 8 claim for declarations. However, the Part 8 proceedings can be instituted and pursued either in parallel with or in advance of the ongoing and any further adjudications. It is not necessary for an injunction to be granted to stop the adjudications pending the hearing of a Part 8 claim. Indeed, the court is usually very reluctant to hold up enforcement of adjudication decisions pending the determination of Part 8 claims, although in appropriate circumstances it will deal with them together. In very rare circumstances it will allow the Part 8 claim to proceed in advance, but those are matters for the court to consider if and when it gets to the stage of having competing Part 8 and Part 7 proceedings.

For all those reasons, the court is not satisfied that this would be an appropriate case in which to interfere with the adjudication process. Applying the American Cyanamid principles, there is simply no serious issue to be tried. For that reason the claimant's application is dismissed.