Millchris Developments Ltd v Waters

Interlocutory injunctions preventing an adjudication are exceptional. They should be granted only in very rare and clear cases, such as where the adjudication would inevitably be conducted without natural justice or would serve no useful purpose. The court must assess whether there is a serious issue concerning the continuation of the adjudication, rather than determine the underlying contractual dispute. The short timetable inherent in adjudication does not itself establish unfairness. Practical difficulties caused by the Covid-19 restrictions, pressure on legal representatives, difficulties contacting witnesses, or inability to attend a site visit in person will not suffice where reasonable alternative arrangements remain available.

Millchris Developments Ltd applied without notice for prohibitory and mandatory injunctions preventing Fiona Selski Waters from continuing an adjudication concerning alleged overcharging and defects in residential building works. The contract included an adjudication provision, although the statutory adjudication requirements under the Housing Grants, Construction and Regeneration Act 1996 did not apply to the property.

Millchris argued that the adjudication could not proceed fairly because of the Covid-19 restrictions, the short timetable, difficulties obtaining documents and witness evidence, and the adjudicator’s proposed site visit. The central issue was whether continuation would necessarily breach natural justice and render any decision unenforceable.

1. The application was refused. The injunctions were not granted and the adjudication was to proceed.
2. Interlocutory or declaratory relief interfering with an ongoing adjudication is rarely appropriate. The court endorsed the approach in the first-instance decision in Bresco Electrical Services Limited v Michael J Lonsdale Electrical Ltd: such relief should be granted only in very rare and clear cases.
3. Applying the American Cyanamid principles, the relevant serious issue was not whether Millchris had a substantial underlying claim or defence. It was whether there was a serious issue that the adjudication would necessarily breach natural justice, with the inevitable consequence that the decision would be unenforceable. No such issue arose.
4. The ordinary short timetable of adjudication does not establish unfairness. The solicitor’s isolation, the location of the company file, difficulties contacting one witness, workload pressures and the failure to contact another potential witness did not show that the adjudication could not fairly proceed. A two-week extension had also been offered.
5. There was no general right for parties, representatives or their surveyors to attend a site inspection. The adjudicator could inspect alone, record the visit, use remote attendance, or adopt another fair procedure. The assumption that only an in-person inspection attended by Millchris’s representatives would satisfy natural justice was misconceived.
6. The alleged overcharging, defects and questions concerning authority and any prior concession were matters within the adjudicator’s jurisdiction. They were not jurisdictional objections to the reference.