T Clarke (Scotland) Ltd v Mmaxx Underfloor Heating Ltd

[2014] CSIH 83

Mmaxx was the subcontractor tasked with the mechanical and electrical works at a primary school in Scotland. Between June 2013 and March 2014 there were nine adjudications: eight initiated by Mmaxx and one by Clarke. Mmaxx had lost seven of the adjudications it commenced and only made a recovery of 10% in the eighth. Clarke sought an interdict (or injunction) to prevent Mmaxx from commencing any further adjudications.

That application was refused even though the court noted that Clarke had disclosed a “troubling picture”. Given the “slew of adjudications” it was understandable that Clarke should query Mmaxx’s underlying motives. However, whilst there was a “cloud of suspicion” hanging over Mmaxx’s conduct, the circumstances did not clearly show that Mmaxx had acted unreasonably and oppressively. Clarke appealed. Lord Bracadle noted that Clarke was not seeking to prevent Mmaxx from pursuing a particular adjudication embarked on in bad faith or on an untruthful  basis. Clarke sought to prevent Mmaxx from referring any future dispute, whether or not it was brought on a legitimate basis. To do so would be:

a significant innovation on the contractual dealings between the parties and a significant limitation on the right provided by Parliament in the 1996 Act. The potential to involve the denial of a well‑founded claim was precisely the reason advanced ...for the sparing use of the power to intervene to prevent an abuse of process.”

Past words or acts could not turn a future genuine dispute into bad faith. If the court were to be involved at all it could only be  on an adjudication by adjudication basis. Lord Bracardle accepted that the alleged conduct of Mmaxx gave cause for concern.

The claims surrounding the third adjudication were of a serious nature. These might possibly have founded a basis for the court to intervene in relation to that adjudication. However, here the key consideration was that the grant of interim interdict would prohibit Mmaxx from initiating any further adjudication, no matter how genuine and well vouched. Accordingly, the application was refused.