Nicholas James Care Homes Limited (the “Claimant”) brought Part 24 enforcement proceedings against Liberty Homes (Kent) Limited (the “Defendant”) relating to the following three applications:

1. enforcement of an Adjudicator’s decision (“Adjudicator Decision”) dated 18 February 2022 (“Issue 1”);
2. enforcement of an ex parte freezing injunction against the Defendant (“Issue 2”); and
3. an application for the stay of execution for the Adjudicator Decision.

The initial dispute between the parties concerned Beacon Hill Nursing Home (the “Site”), for which the Claimant was the Employer, Owner and Operator and had engaged the Defendant to carry out construction works.

Issue 1

The Defendant challenged the enforcement of the Adjudicator’s Decision due to “the way in which the Adjudicator [sic] demanded payment for his services in advance of the delivery of the Decision”. The Adjudicator’s Terms of Appointment included paragraphs that entitled the Adjudicator to security for the payment of fees and expenses “as and when deemed necessary”. On several occasions the Adjudicator’s clerk requested payment of a deposit from the Defendant for the initial deposit of £10,000.00 and a subsequent sum of £15,000.00 on the basis that the Adjudicator’s services had expanded significantly over the initial deposit.

The Defendant after several requests from the Adjudicator’s clerk paid the requested deposit with the proviso that payment was made without prejudice to the Defendant’s right to make jurisdictional challenges.

In these proceedings the Defendant, relying on Mott MacDonald Ltd v. London & Regional Properties Ltd [2007] EWHC 1055 and Cubitt Building & Interiors Ltd v. Fleetglade Ltd [2006] EWHC 3413, argued that these requests for payment amounted to “threats” or a “lien” rendering the Adjudicator’s decision enforceable.

In response to these arguments, the Claimant submitted that these allegations were an attempt to paint an innocent demand for payment as “threats”.

Issue 2

The second application concerned discharge of a freezing order obtained by the Claimant on the Defendant. The Defendant challenged the freezing order on the basis that there was not “full and frank disclosure” of the following two documents: an email to the Claimant identifying a new corporate entity, Liberty Holdings (Kent) Limited which was incorporated on 28 August 2020 which referred to the existence of a dormant company, Liberty GB Limited which was incorporated on 18 July 2007; and an office copy entry search carried out by the Claimant’s solicitors (at the time) on 12 November 2020 in relation to the transfer of assets of the owner of the Defendant to the dormant company.

In response the Claimant argued and provided evidence to support the idea that non-disclosure was not deliberate and as a result of deliberate dishonesty.

The Decision

In respect of Issue 1, the Judge held on the basis of the evidence, whilst the Clerk’s request for payment were “tenacious and persistent” they did not amount to improper threats or a lien as alleged. Further, the Judge stated that the Defendant should have raised any allegations of bias in relation to payment requests at the time. Therefore, the challenge to the enforcement of the Adjudicator’s decision failed and the Claimant was ordered to pay £2,589,737.76 plus £291,583.14 interest as at 18th February 2022 and interest thereafter accruing at £361.85 per day.

In its consideration of Issue 2 the Judge referred to Gee at para.9-003 in that non-disclosure if relied upon must be ‘material’. Further, with consideration of Aquarius Holding Ltd v. Mr S Barber and Others [2016] EWHC 2806 (Comm), even if disclosure was material the court is to also consider whether there was deliberate non-disclosure and the impact of the particular non-disclosure and whether it is in the interests of injustice that the injunction should be set aside. The judge held that the non-disclosure was not material, and even if it was material there was no evidence of deliberate non-disclosure and the injunction remained.

On the basis that the stay of execution was grounded on the Judge being persuaded that the freezing injunction be discharged due to deliberate dishonestly on part of the Claimant the basis for stay of execution of the Adjudicator’s decision fell away.

Practical Implications

This case is a useful reminder that parties should raise jurisdictional challenges at the time they become apparent, and that non-disclosure will not always overcome “the injustice of the injunction being in place.”