Adjudication
Allied London & Scottish Properties plc v Riverbrae Construction Limited [1999] Crt of Session

© Daniel Atkinson 2003 18 April 2003

The Scottish decision by Lord Kingarth on 12th July 1999 in Allied London & Scottish Properties plc v Riverbrae Construction Limited [1999] Crt of Session examines the power of the Adjudicator to determine a procedure for payment other than peremptorily or within 14 days. Riverbrae contracted to execute certain works for Allied in a number of different construction contracts. They made claims for payment under four of these contracts all in Glasgow: 1. the upgrading of a lift and stair installation at Granite House, Stockwell Street, 2. an office fit-out at the fifth floor, Clydeway Centre, 3. an office fit-out at Clydeway Centre, and 4. a lift and stair installation at Clydeway Skypark.

The Adjudicator made decisions at the same time on all four contracts under four separate adjudications known as Adjudications A, B, C and D. I each decision the adjudicator ordered Allied to pay to Riverbrae directed sums.

Allied sought reduction of these Decisions by judicial review. It was common ground that in respect of each contract the appropriate regulations which applied (by virtue of Section 108(5) and (6) of the 1996 Act) were the Scheme for Construction Contracts (Scotland) Regulations 1998 (1998 S.I. 687).

Allied claimed compensation for liquidated and ascertained damages for delay in completion and alleged overpayment on different contracts from the four contracts which referred to the adjudicator. The Adjudicator had rejected these claims by Allied. Allied did not accept that the Adjudicators decision was right on its claims, but accepted that there was no error of law which could be said to have led to the adjudicator to exceed his jurisdiction, not being errors going to the root of the question for his determination. It was accepted that on this matter Allied could not seek to invoke the court's supervisory jurisdiction by way of judicial review.

The main matter before the Court was therefore the adjudicator’s decision that he did not have power under the 1996 Act or the Scheme or the Contract to order that Allied be allowed to place any monies due to Riverbrae on deposit receipt in the joint names of the parties, pending resolution of all disputes between them. Allied argued that the adjudicator had failed properly to apply his mind, as required by the Scheme, to the question of whether he should indeed make orders for payment on Allied peremptorily. Allied referred to paragraphs 12, 13, 14, 15, 17, 20 and 21 of the Scheme.

Allied also referred and relied upon paragraph 23(1) which provides that 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. Allied accepted that 'peremptorily" in paragraph 23 was not necessarily restricted to time, but submitted that consideration of such an order inevitably involved consideration of the time within which it would fall to be complied with. Allied submitted that despite making no decision that Allied' claims for liquidated and ascertained damages were unfounded, or that they had no reasonable apprehension as to the financial state of Riverbrae, the adjudicator did not consider - apart from the particular submission made to him about possible joint deposit receipt - whether a peremptory order was indeed appropriate. A number of suggestions were made as to possibilities he could have considered, all involving no order for immediate payment - in particular, the possibility of making an order for payment pending resolution of the liquidated and ascertained damages claims.

Allied submitted that in this way the adjudicator had failed to take account of matters he was required to take account of, and had made an error of going to the root of his jurisdiction, relying on C.C.S.U. v Minister for Civil Service 1985, Anisminic v Foreign Compensation Commission 1969 and Macob Civil Engineering Ltd v Morrison Construction Ltd 1999. Allied submitted that the adjudicator’s decisions therefore fell to be reduced at least to the extent of the orders made for payment within 14 days. The matter should be remitted to the adjudicator to consider whether he thought fit that such orders be made.

Lord Kingarth found that it was wrong to read the decisions of the adjudicator as if the only point at which he addressed the question of whether it was appropriate to make a finding that Riverbrae were entitled to immediate payment (or to make an order to that effect) was in relation to the question of potential joint deposit receipt. Instead, he found that having rejected the claim that Riverbrae' claims were extinguished, and there being no suggestion that he should assess the merits of Allied' claims, that his consideration of whether Allied could exercise a right of retention was in the context of assessment of whether there was any reason not to find Riverbrae immediately entitled to the sums they claimed or make an order upon Allied to that effect. It was not clear that the submission about possible joint deposit receipt was made in the context of whether an order for payment should be immediate.

Lord Kingarth held that in any event, although it was clear that the adjudicator was given wide powers as to how to decide the disputes referred to him including adopting an entirely inquisitorial process Macob Civil Engineering Ltd, and while it is also clear both that he had a discretion as to whether to order immediate payment and that he could have addressed himself competently to a number of potential alternatives, it did not follow that he was bound to consider alternatives when the only submissions made to him for his consideration in that context, by the party with the interest to make them, were those related to the joint deposit receipt. Lord Kingarth held that this was particularly true having regard to the apparent way in which these adjudications were carried out - by written submissions, followed by a hearing at which the parties' legal representatives presented arguments; a hearing at which it was not suggested that the adjudicator should proceed in any other way. Lord Kingarth held that the submission by Allied would run counter to the purpose of the Act, which was to introduce a speedy mechanism for settling disputes in construction contracts on a provisional interim basis and requiring the decisions of adjudicators to be enforced pending the final determination of disputes by arbitration, litigation or agreement (Macob Civil Engineering Ltd).

Lord Kingarth held that the adjudicator having decided that Riverbrae were entitled to payment of the sums they claimed, and that Allied could not retain the sums they claimed, and in addition the adjudicator having no duty, and no apparent right, to investigate and assess these latter claims, the adjudicator could not logically, or lawfully, have made an order of the type suggested as a possibility - that is postponing payment standing the existence of Allied' claims. Lord Kingarth held that such an order would plainly, in effect, have been to sustain Allied' claims to retention which the adjudicator had just rejected. Whatever wide powers might be given to adjudicators to facilitate speedy resolution of the disputes before them, no power was given to make decisions contrary to the rights or obligations of the parties arising as a matter of law.

Accordingly the adjudicator had not failed to take into account matters which he was bound to take into account and had not made any error of law going to the root of his jurisdiction and Lord Kingarth therefore refuse to make any of the orders sought by Allied.