Gillies Ramsay Diamond+gavin Ramsay+philip Diamond The Partners Of Said Firm As Partners And As Individuals V. Pjw Enterprises Limited For Judicial Review Of A Decision Of An Adjudicator Dated 4 May 2001

CourtCourt of Session
JudgeLord Justice Clerk,Lord Caplan,Lord Macfadyen
Published date10 February 2004
Docket NumberP629/01
Date24 December 2003

SECOND DIVISION, INNER HOUSE, COURT OF SESSION

Lord Justice Clerk

Lord Macfadyen

Lord Caplan

P629/01

OPINION OF THE LORD JUSTICE CLERK

in

RECLAIMING MOTION

by

GILLIES RAMSAY DIAMOND and GAVIN RAMSAY and PHILIP DIAMOND, the partners of said firm as partners and as individuals

Petitioners and Reclaimers;

against

PJW ENTERPRISES LIMITED

Respondents;

for

Judicial review of a decision of an adjudicator dated 4 May 2001

_______

Act: RA Smith QC, Charteris; Simpson & Marwick, WS

Alt: Howie QC, Smith; MacRoberts

24 December 2003

Introduction

[1]This is a reclaiming motion from an interlocutor of Lady Paton dated 27 June 2002 in a petition for judicial review of a decision of an adjudicator appointed under the Housing Grants, Construction and Regeneration Act 1996 (the 1996 Act).

Statutory provisions

The 1996 Act

[2]Section 104 of the 1996 Act provides inter alia as follows:

"104.(1) In this Part a 'construction contract' means an agreement with a person for any of the following -

(a)the carrying out of construction operations;

(b)arranging for the carrying out of construction operations by others,

whether under sub-contract to him or otherwise; ...

(2)References in this Part to a construction contract include an agreement -

(a)to do architectural design, or surveying work ...

in relation to construction operations."

Section 108 of the Act provides inter alia as follows:

"108.(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.

For this purpose 'dispute' includes any difference ...

(3)The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement ...

    • If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts apply.
    • For England and Wales, the Scheme may apply the provisions of the Arbitration Act 1996 with such adaptations and modifications as appear to the Minister making the scheme to be appropriate.

For Scotland, the Scheme may include provision conferring powers on courts in relation to adjudication and provision relating to the enforcement of the adjudicator's decision."

Section 111(4) provides as follows:

"Where an effective notice of intention to withhold payment is given, but on the matter being referred to adjudication it is decided that the whole or part of the amount should be paid, the decision shall be construed as requiring payment not later than -

    • seven days from the date of the decision, or
    • the date which apart from the notice would have been the final date for payment,

whichever is the later."

Section 114(4) provides as follows:

"Where any provisions of the Scheme for Construction Contracts apply by virtue of this Part in default of contractual provisions agreed by the parties, they have effect as implied terms of the contract concerned."

The 1998 Scheme

[3]The Scheme for Construction Contracts (Scotland) Regulations 1998 (SI No. 687) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI No. 649) give effect to section 108(5) in the case of a non-compliant contract. The procedural rules for adjudications are in Part 1 of the Schedule to each set of Regulations. The paragraph numbers to which I shall refer are those of Part 1. The two Schemes have a common statutory basis (1996 Act, s. 114) and are identical except in relation to practical matters on which the systems differ (1996 Act, s. 108(6)). For example, paragraph 24 of the Scheme for Scotland provides for registration of the decision for execution in the Books of Council and Session; whereas paragraph 24 of the Scheme for England and Wales imports the procedure for enforcement of orders (Arbitration Act 1996, s. 42) that would apply in arbitral proceedings.

The Scottish Scheme provides inter alia as follows:

"1.(1) Any party to a construction contract ('the referring party') may give written notice ('the notice of adjudication') of his intention to refer any dispute arising under the contract to adjudication ...

(3)The notice of adjudication shall set out briefly ...

(c)the nature of the redress which is sought ...

12.The adjudicator shall -

(a)act impartially in carrying out his duties and shall do so in accordance with any relevant terms of the contract and shall reach his decision in accordance with the applicable law in relation to the contract ...

19.(1) The adjudicator shall reach his decision not later than -

(a)twenty eight days after the date of the referral notice mentioned in paragraph 7(1);

(b)forty two days after the date of the referral notice if the referring party so consents; or

(c)such period exceeding twenty eight days after the referral notice as the parties to the dispute may, after the giving of that notice, agree.

20.(1) The adjudicator shall decide the matters in dispute and may make a decision on different aspects of the dispute at different times.

(2)The adjudicator may take into account any other matters which the parties to the dispute agree should be within the scope of the adjudication or which are matters under the contract which he considers are necessarily connected with the dispute and, in particular, he may ...

(b)decide that any of the parties to the dispute is liable to make a payment under the contract (whether in sterling or some other currency) and, subject to section 111(4) of the Act, when that payment is due and the final date for payment ...

21.In the absence of any directions by the adjudicator relating to the time for performance of his decision, the parties shall be required to comply with any decision of the adjudicator immediately on delivery of the decision to the parties in accordance with paragraph 19(3) ...

23.(1) In his decision, the adjudicator may, if he thinks fit, order any of the parties to comply peremptorily with his decision or any part of it.

(2)The decision of the adjudicator shall be binding on the parties, and they shall comply with it, until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement between the parties.

The appointment of the petitioners as contract administrators

[4]The petitioners and reclaimers are a firm of building contract surveyors. The respondents instructed them to act as contract administrators of a building contract that the respondents proposed to place for the extension and refurbishment of premises at 40 Stanley Street, Glasgow (the contract works).

[5]The terms of the petitioners' appointment were set out in a letter from the petitioners to the respondents dated 9 July 1998. The professional services specified in that letter included the initial site survey; preparation of detailed scale plans for use in applications for statutory consents and in budget costings, and for tendering purposes; preparation of draft scheme drawings and a draft specification; preparation of a pre-tender budget; issuing of tender documentation; appraisal of tenders; monitoring and administration of the contract, including site visits and site meetings; preparation of valuations and the issuing of certificates of payment; certification of practical completion and agreement of final accounts; and supervision of the contractor during the defects liability period. The fee payable to the petitioners was specified as being in accordance with the RICS Scale of Charges for Building Services - Building Works, abated to 10%. The terms of appointment did not contain an adjudication clause. Therefore if this was a construction contract (1996 Act, ss. 104, 108), the Scheme applied to it (ibid, s.108(5)).

The building contract

[6]On 22 April 1999 the respondents entered into a building contract with R & R Construction (Scotland) Limited (the contractor) for the contract works. The contract was in the form of the SBCC Scottish Minor Works Contract (April 1998 Revision). It is not disputed that the contract works constituted "construction operations" in terms of the 1996 Act (ss. 104(1)(a); 105(1)).

The respondents' claim against the petitioners

[7]During the course of the contract works, there were disputes between the respondents and the contractor on which there were five adjudications. As a result of these adjudications, the respondents became liable to the contractor for certain additional payments. The respondents alleged that this liability was caused by breaches of contract on the part of the petitioners. By notice dated 28 January 2000 the respondents terminated the petitioners' appointment.

[8]By notice dated 13 March 2001, the respondents required adjudication on a claim by them against the petitioners for £46,167 as damages for the alleged breaches of contract. They alleged that the petitioners had failed to issue certain written instructions to the contractor and had wrongfully granted an extension of time to the contractor after the date of practical completion, and on these grounds were in breach of an implied term of the contract that they should exercise the degree of skill and care to be expected of an ordinarily competent surveyor. The petitioners submitted that they had been entitled to award the extension when they did; that all instructions for the relevant variations, although not contained in formal written instructions, were recorded in the site minutes; and that they had not been in breach of their contractual duty in either respect.

The adjudication

[9]Mr David H Wilson FRICS ACIArb was appointed as adjudicator. He received written and oral submissions from the parties and took legal advice from the firm of McGrigor Donald, Glasgow. At a hearing on 19 April 2001, senior...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT