W.h. Malcolm Limited For Judicial Review
| Jurisdiction | Scotland |
| Judge | Lady Smith |
| Neutral Citation | [2010] CSOH 152 |
| Date | 10 November 2010 |
| Docket Number | P1187/10 |
| Court | Court of Session |
| Published date | 17 November 2010 |
| OUTER HOUSE, COURT OF SESSION [2010] CSOH 152 | |
| P1187/10 | OPINION OF LADY SMITH in the Petition of W.H. Malcolm Ltd Petitioner; for Judicial Review of the decision of an Adjudicator ________________ |
Petitioner: Currie QC; Burness LLP
Interested Party: Borland, Advocate; Shepherd and Wedderburn LLP
10 November 2010
INTRODUCTION
[1] The petitioner has presented a petition for judicial review of a decision of the respondent, an adjudicator to whom a dispute between the petitioner and Amec Group Limited, the interested party, has been referred. The petitioners and the interested party entered into a sub-contract for various works to be carried out by them at Calderglen High School, East Kilbride. The petitioners sought interim interdict in the following terms:
"d. interdict against the respondent from considering in the Adjudication any submissions and representations made by the parties in support of the contention that SMM7 is the Method of Measurement to be utilised under the terms of the Sub-Contract; and interdict ad interim
e. interdict against the respondent from taking a decision contrary to that taken by Janey Milligan that SMM7 is not the Method of Measurement to be utilised under the terms of the Sub-Contract; and interdict ad interim."
BACKGROUND
[2] The present adjudication is the second adjudication arising out of the sub-contract. The Notice of Intention to Refer a dispute is dated 1 October 2010 and the Adjudication Referral Notice is dated 8 October 2010. The dispute set out in those documents is that there are three items in respect of which the petitioner states that it is entitled to payment of a total of £502,848.07, that it has sought payment of that sum but that the interested party has failed to pay it. The redress sought in the adjudication is payment of that sum of money. The adjudication is not yet complete. The adjudicator has not yet heard or received argument on the issue of whether or not the sum sought, or any part of it, is due. The interested party has lodged a response document in which they assert that the correct method of measurement is SMM7, a particular method of measurement used in building works.
[3] The petitioner's agents made representations to the adjudicator by email of 3 November 2010 in which they asserted that it is not open to the respondent to determine whether or not SMM7 applies because it was decided by the adjudicator in the first adjudication, Janey Milligan "in a manner that is temporarily binding on parties". The respondent heard submissions from the petitioner and interested party on the matter and he sought counsel's opinion. Having done so, by email of 1 November 2010 he advised parties that he had concluded that "I am not bound by Janey Milligan's comments in respect of SMM7". The petitioner says that that is a decision, that it is judicially reviewable and seeks to have it judicially reviewed.
[4] Turning then to the first adjudication, the dispute that was referred to Janey Milligan in the first adjudication was that which was set out in the petitioner's Notice of Intention to Refer dated 21 July 2010. It included a list of fourteen financial claims in respect of fourteen separate items of work. Under the heading "Crystallization of the Dispute" it is said that the petitioner had called on the interested party to make payment of the various sums referred to and that the interested party had refused to make payment of those sums. Their dispute had, accordingly, crystallised. Nowhere in the Notice, or indeed in the subsequent Referral Notice, does it state that the dispute which the petitioner was referring to adjudication was the issue of whether or not the sub-contract provided that the measurement method SMM7 was applicable.
[5] Janey Milligan's decision is set out at section 12 of the document headed "Adjudicator's Decision with Reasons" dated 29 September 2010. She states her finding, declaration and decision as being, put shortly, that the sum of £139,611.47 plus VAT, was payable to the petitioner within seven days. Provision is made for interest, for due date of payment and for the adjudicator's fees. Nothing is said in that section of the document regarding the basis on which she has arrived at her decision. She was not obliged to give reasons for her decision at the outset (see: TeCSA Rules, which applied, Rule 31). She did, however, do so. Section 7 of the document is headed "Standard Method of Measurement 7 (SMM7)" and at 7.29 she stated:
"With respect to parties' submissions and the information I gathered at the meetings and taking account of the actings of the parties during the works, I find that SMM7 does not apply to the parties' contract and is not applicable as the method of measurement when valuing the parties' contract."
RELEVANT LAW
[6] The law that is relevant to the present application can be summarised as follows.
[7] The petitioner seeks interim interdict. The grant or refusal of interim interdict is a discretionary matter and it is not open to me to grant it unless I am satisfied that the petitioner has demonstrated a prima facie case and shown that the balance of convenience favours the grant rather than the refusal of interim interdict.
[8] Turning to the law that is applicable in the particular circumstances of this case I note, in the first place, that the sub-contract provides that each party has the right to refer a dispute as to a matter under the sub-contract to adjudication and that the adjudication is to be conducted in accordance with the TeCSA Rules subject to certain amendments. Thus the parties to the sub-contract agreed:
"Unless the parties agree that any decisions of the adjudicator shall be final and binding any decision of the adjudicator shall be 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." (TeCSA Rules para 16)
and they agreed that
"The adjudicator shall immediately resign on written notice to the parties if he becomes aware that the dispute referred to him is substantially the same as the dispute which has previously been referred to and decided by adjudication under the contract." (TeCSA Rules para 21 xiii)
[9] It follows that under their contract the petitioner and the interested party have agreed that they are bound by any adjudicator's decision in respect of the dispute referred to him. They may not reopen it in a subsequent adjudication. If a dispute or difference has already been decided by an adjudicator, no further adjudicator's decision can be sought.
[10] Two questions have to be considered. First, what was the dispute that was referred to the prior adjudication? Secondly, what is it that was decided in the prior adjudication? Both plainly matter. I draw for that analysis on the cases of Quietfield Limited v Vascroft Construction Limited 2007 BL 67, in particular at paragraphs 31 to 33, and HJ Construction Limited v Ashwell Homes (East Anglia) Limited 2007 EWHC 144. Both of those authorities were relied on by counsel in the course of the hearing before me yesterday.
[11] Regarding the question of what was the dispute that was referred to adjudication, the Notice of Intention to Refer is a key document since it defines the nature, extent and limits of the issues that the referring party seeks to have determined. The dispute is whatever is encompassed within the Referral Notice (see:, Sherwood & Casson Limited v Mackenzie 2000 TCLR 418 per HHJ Thornton QC, at paragraph 8 ). As Lord Glennie observed in the case of Barr Limited v Klin at 2010 SCLR 33, the referring party may "pick and choose". It is for him to decide what it is that he wishes to refer for adjudication. He may refer a discrete issue. He may refer several issues. He may refer a general question regarding the interpretation of the parties' contract, such as in the HJ Construction case where the Notice of Intention to Refer identified the issue as being...
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