Scottish Sheriff Court Decisions

CA296/09

 

SHERIFFDOM GLASGOW AND STRATHKELVIN AT GLASGOW

 

J U D G M E N T

by

C A L SCOTT, Advocate, Sheriff of Glasgow and Strathkelvin

in causa

BELL BUILDING PROJECTS LIMITED a company incorporated under the Companies Acts and having its registered office at 19 Robert Drive, Helen Street, Glasgow G51 3HE

PURSUERS

against

CARFIN DEVELOPMENTS LIMITED a company incorporated under the Companies Acts and having its registered office at 231/233 St Vincent Street, Glasgow G2 5QY and having a place of business at Brandon House, 81 Hamilton Road, Motherwell ML1 3DQ

DEFENDERS

 

 

GLASGOW, 8 April 2010. The sheriff, having resumed consideration of the pursuers' motion for summary decree, grants same, and in terms thereof (1) grants decree against the defenders for payment to the pursuers of the sum of TWENTY THREE THOUSAND TWO HUNDRED AND TWELVE POUNDS AND NINETY THREE PENCE (£23,212.93) Sterling with interest thereon at the rate of five per cent per annum above the base rate of the Bank of England current at the date of payment from 13 February 2009 until payment and (2) grants decree against the defenders for payment to the pursuers of the sum of TWENTY NINE THOUSAND NINE HUNDRED POUNDS (£29,900) Sterling with interest thereon at the rate of five per cent per annum above the base rate of the Bank of England current at the date of payment from 13 February 2009 until payment; finds the defenders liable to the pursuers in the expenses of the action; allows an account thereof to be given in and remits same, when lodged, to the auditor of court to tax and to report thereon; certifies the cause as suitable for the employment of junior counsel.

 

 

SHERIFF

 

NOTE:

 

Background

[1] In this commercial action, the pursuers seek payment from the defenders in respect of sums of money arising out of a contract between the parties. A dispute between the parties was referred to adjudication in July of 2009. The adjudicator's decision, dated 1 September 2009, inter alia ordered the defenders to make payment of the sums presently sued for in terms of the first and second craves of the initial writ.

 

[2] The defenders resist the pursuers' claim for payment. Firstly, they maintain that since "the dispute (or at least certain necessarily constituent parts of that dispute)" (see answer 5) had already been the subject of a decision from an earlier adjudication, the second adjudication lacked proper jurisdiction. Secondly, it is argued that the (second) adjudicator's decision was based upon the terms of the "certificate of practical completion". The defenders maintain that that document was not a certificate issued under and in terms of the parties' contract. Accordingly, it is argued that the (second) adjudicator once again lacked jurisdiction to determine the dispute which the pursuers referred to him.

 

[3] After sundry procedure, the pursuers enrolled for summary decree on the basis that the defences disclosed no defence to the action.

Pursuers' submissions

[4] Counsel for the pursuers began by setting out the background to the motion in greater detail. Under a building contract between the parties, the pursuers had been employed as contractors, by the defenders, to design and construct commercial and retail units at a site in Motherwell.

 

[5] Certain disputes arose and these, in turn, resulted in two adjudications. The adjudicator in the first adjudication was Mr Alan Stewart. His decision was issued on 31 July 2008. (See tab 9 in pursuers' bundle.) The second adjudicator was Mr Jack McKinney. His decision was issued on 1 September 2009. The present proceedings are concerned with the enforcement of Mr McKinney's decision.

 

[6] In the Stewart adjudication, the dispute focused upon the pursuers' application for payment. Counsel referred to the summary within valuation No 11 - final account, dated 30 April 2008 (tab 4). He pointed to a retention in the sum of £20,581.31 with a subsequent amount of £63,047.81 plus VAT being due to the pursuers.

 

[7] The formal valuation was issued by Dickson Associates, Quantity Surveyors, and was dated 7 May 2008 (see tab 3). In response, the defenders issued a withholding notice seeking to withhold payment regarding that valuation. Notice to that effect was given in the form of an email from the defenders' John Reid, dated 11 May 2008, addressed, inter alia, to the pursuers' representatives. (See tab 5). Paragraphs 4 and 5 of that email referred to certified sums being withheld in relation to:

 

"4. Failure to fulfil Employer's Requirements in respect of matters relating to the 'conditional statement of practical completion' - £17,000.

5. Failure to fulfil Employer's Requirements in respect of the standards and specification of roads, footpaths and car parking - £9,000".

 

[8] The pursuers took issue with the withholding notice and its validity and issued a notice of adjudication dated 1 July 2008. As counsel put it, the foregoing amounted to the genesis of the Stewart adjudication. The notice of adjudication (tab 7) inter alia asked the adjudicator to decide that:

 

"6.1 The Referring Party is entitled to a nett payment of £63,048.00 plus VAT as certified by the Respondent's Quantity Surveyors, or such other sum as the Adjudicator shall decide in respect of Valuation No 11;".

 

[9] It was submitted that the terms of the reference to adjudication made it clear that the pursuers' claim in the Stewart adjudication was a claim in respect of the amount certified by valuation No 11 all as issued by Dickson Associates, Quantity Surveyors. The sum in question was arrived at following a deduction to reflect the retention sum.

 

[10] Mr Stewart's decision (tab 9) disclosed that, in relation to the alleged failure (on the part of the pursuers) to fulfil the employer's requirements in respect of matters relating to the "conditional statement of practical completion" (involving the sum of £17,000) he found that there were valid grounds for withholding that sum. Similarly, as far as the sum of £9,000 was concerned (withheld in respect of the standards and specification of roads, footpaths and car parking), Mr Stewart concluded that the ground for withholding, namely that the pursuers had failed to fulfil the employer's requirements, was founded in fact at the time of the withholding notice.

 

[11] At paragraph 6.61 of his decision, at page 17, Mr Stewart summarised its effect:

 

"I therefore decide that the Respondent is entitled to withhold £26,000 from the amount due arising from the interim payment application of 30 May 2008, and detailed in the Quantity Surveyor's Valuation No 11. in the amount of £63,048.00. This calculates to an amount due to the Referring Party of £37,048 plus VAT."

 

(Counsel for the pursuers pointed out that the interim payment application referred to was, in fact, dated 30 April and not May as suggested in the aforementioned paragraph.)

 

[12] The McKinney adjudication had taken place about one year later. Counsel for the pursuers advised the court that practical completion in respect of the parties' contract had been certified as at 23 November 2007. Therefore, the defects liability period was to expire 12 months later on 23 November 2008. Counsel characterised the passing of that period as a significant intervening event, occurring between the two adjudications.

 

[13] A number of months after the expiry of the defects liability period, a further dispute between the parties arose. In due course, the pursuers issued a second notice of adjudication dated 21 July 2009 (tab 8). This time, the redress sought flowed from the absence of a Notice of Completion of Making Good Defects in accordance with clause 16.4 of the parties' contract (see paragraph 4.6 of the Notice). The Notice also founded upon the defenders' failure to administer the contract properly, together with the failure to issue a valid withholding notice following upon receipt of the pursuers' invoice dated 29 January 2009.

 

[14] Counsel then turned to the decision of the second adjudicator, Mr McKinney (see tab 10). In particular, under reference to page 11 of the decision, counsel pointed out that, absent a list of defects, in terms of the contract, there was nothing to prevent a Notice of Completion of Making Good Defects being issued. The latter Notice was the "trigger" for release of the retention monies. Similarly, in the foregoing circumstances, there was nothing which might preclude payment of the sums previously withheld.

 

[15] At pages 13 to 14 of his decision, Mr McKinney discussed the administration of the contract. Before turning to the sums previously withheld, Mr McKinney observed that:

 

"The current Adjudication relates to a wholly different set of circumstances from the earlier Adjudication and relates to the Employers Agent position, Date of Expiry of Defects Liability Period together with the administration of the contract terms surrounding these aspects in regard to release of monies.

 

No valid Withholding Notice has been issued by the Respondents in respect of the Referring Party application dated 29/01/09.

 

Due to the foregoing being the position the Referring Party was entitled to payment of the sum of £20,185.18 plus VAT of £3,027.78 giving a total of £23,212.96 without any deduction by the Respondents."

 

[16] The withheld sums, viz. £17,000 and £9,000, related to ponding in the footpaths and red whin chips. Mr McKinney discussed those issues at pages 15 to 18 of his decision and the sums involved specifically formed the basis for paragraph 10 of his decision at page 20.

 

[17] Counsel for the pursuers then considered the lines of defence put forward by the defenders all as described at paragraph [2] supra. He referred to answer 7 within the defences at page 4 which set out the proposition that the adjudicator, Mr McKinney, lacked jurisdiction to determine the dispute, having regard to the nature and scope of the earlier adjudication and to the contention that the "certificate of practical completion" was no more than a "compromise agreement". Counsel drew the court's attention to the "certificate of practical completion" which (contrary to the inventory itself) appeared to form tab 13 within the defenders' second inventory of productions.

 

[18] Counsel then turned to consider the law as it applied to the circumstances of the case. In order to do so, it was necessary to reflect upon the parties' contract which was to be found at tab 6 within the pursuers' bundle of productions. Within Appendix 1, at page 8, there were a number of supplemental conditions regarding the involvement of an adjudicator. Clause 39A.3.2 was in the following terms:

 

"An Adjudicator must resign where the dispute is the same or substantially the same as one which has previously been referred to Adjudication, and a decision has been taken in that Adjudication."

 

Counsel for the pursuer suggested that the foregoing formulation had been the subject of significant judicial consideration. He referred firstly to the opinion of Lord Glennie in the case of Barr Ltd v Klin Investments Ltd. 2010 SCLR 33. In the Barr Ltd. case, at paragraph 30 onwards in his opinion, Lord Glennie dealt with the contention that the adjudicator had no jurisdiction to deal with any part of the dispute. Under reference to Lord Glennie's observations, counsel for the pursuers advanced the following propositions:

 

(a) the phrase "substantially the same" should not be given any extended meaning or definition;

 

(b) the phrase was designed to identify a case wherein a second or subsequent dispute was "almost the same as that which had earlier been referred";

 

(c) the words "substantially the same" were not designed to cover a situation wherein the dispute embraced another separate and distinct attempt to unlock the same sum or sums.

 

[19] Counsel also referred to the case of Carillion Construction v Devonport Royal Dockyard [2006] BLR 15 in which the opinion of the Court of Appeal was delivered by Lord Justice Chadwick. At paragraph 26, his Lordship, in considering the purpose of the provisions in Part II of the 1996 Act, taken along with the 1998 Regulations, in turn, referred to what was said by Mr Justice Dyson in Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] BLR 93 at 97. Counsel stressed the final sentence within the passage from Mr Justice Dyson's opinion which states that:

 

"Crucially, it (Parliament) has made it clear that decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved."

 

[20] Counsel for the pursuers submitted that the approach approved of by Lord Justice Chadwick in Carillion Construction was consistent with the leading Scottish authority on the matter, namely, the case of Diamond v PJW Enterprises Ltd 2004 SC 430. In Diamond, at paragraph 25 in his opinion, Lord Justice-Clerk Gill contrasted adjudicators' decisions which might be classified as being ultra vires with those which might proceed upon an intra vires error of law. At paragraph 41, he concluded that, "...provided that the adjudicator asks himself the correct question, his decision is not reviewable in this process on the ground that he has answered the question incorrectly".

 

[21] Accordingly, it was submitted on behalf of the pursuers that, in the present circumstances, the adjudicator in the second adjudication, Mr McKinney, did, indeed, have proper jurisdiction to determine the issue or issues referred to him by the pursuers. Therefore, his decision on these matters fell to be enforced.

 

[22] In support of the pursuers' contention that the defences lodged disclosed no defence to the action, counsel for the pursuers advanced a number of submissions. In referring back to the (second) Notice of Adjudication dated 21 July 2009 (tab 8) counsel noted that, at that stage of the contract, the Defects Liability Period had expired. The redress sought by the pursuers identified the allegation that the contract had not been properly administered. In particular, it embraced the proposition that a Notice of Completion of Making Good Defects ought to have been issued and that the amounts due to be paid to the pursuers were the retention monies and the sum of £26,000 plus VAT representing the sums previously withheld.

 

[23] Counsel submitted that, as a result, the question which the adjudicator required to ask himself was whether, as at the date of his decision, there was a contractual basis at that point in time for the non-payment of the £26,000 together with the retention monies. Specifically, it was submitted that Mr McKinney required to establish whether the Defects Liability Period had expired; whether a Schedule of Defects had been issued in relation to allegedly outstanding defects; and whether a Notice of Completion of Making Good Defects had been issued or ought to have been issued. Counsel argued that Mr McKinney had addressed each of those questions. They were questions which arose at a different, later stage from any questions arising from the circumstances which confronted Mr Stewart in the first adjudication. For instance, counsel reminded the court that Mr Stewart's decision was dated 31 July 2008. At that stage, the Defects Liability Period had not expired. Mr McKinney's decision was taken at the beginning of September 2009.

 

[24] Counsel maintained that different contractual provisions were applicable as between the points in time marked by each adjudication. Perhaps for obvious reasons, nothing in Mr Stewart's decision had any bearing upon the expiry of the Defects Liability Period or upon the contractual significance of that. Counsel referred once more to the substance of Mr McKinney's decision. In adopting Lord Glennie's analysis in the case of Barr Ltd, counsel submitted that it could not be said that the dispute in the second adjudication was "almost the same" as that adjudicated earlier, especially in relation to the £26,000 claim for the withheld monies. Moreover, he observed that there was no claim for payment of the retention monies in the context of the first adjudication.

 

[25] Regarding the defences lodged, counsel for the pursuers drew the court's attention to averments commencing some seven lines from the top of page 4 with the sentence "As such, Mr Stewart's decision remains binding." It appeared that the defenders were contrasting the factual decision by Mr Stewart with that of Mr McKinney, whereas the latter decision involved, substantially, a construction of the contract provisions. Counsel referred to the Standard Form of Building Contract provisions at page 57 and, in particular, clause 30.4. He also referred to footnote [z] which provided a more straightforward explanation as to how the terms of the clause operated. Clause 16.2, submitted counsel for the pursuers, provided for a Schedule of Defects being delivered "to the Contractor as an instruction of the Employer not later than 14 days after the expiration of the...Defects Liability Period". Clause 16.4 related to the issue of a Notice of Completion of Making Good Defects.

 

[26] In the case of Skanska Construction Ltd v ERDC Group Ltd 2003 SCLR 296, Lady Paton was called upon to deal with a situation in which Skanska sought to interdict ad interim an adjudicator from continuing a second adjudication. Counsel for the pursuers referred to her Ladyship's opinion at paragraph 28 where she stated that:

 

"I do not agree that the dispute referred to the second adjudicator is substantially the same as the dispute referred to the first adjudicator. A different stage in the contract has been reached; different contractual provisions apply; considerably more information may be available by the date of issue of the final account; and different considerations and perspectives may apply. The fundamental nature and parameters of the disputes are in my view different: cf. dicta in Sherwood & Casson Ltd v Mackenzie" (2000 TCC 418).

 

[27] In dealing with the second line of argument disclosed in the defences, regarding the status of the certificate of practical completion, counsel for the pursuers submitted that the argument had no merit whatsoever. Mr McKinney was called upon to determine whether the relevant monies should be released. He was dealing with matters which, fundamentally, required to be determined under reference to the contract between the parties. Should he have been in error in relation to any legal issue, for present purposes, that was, argued counsel, of no relevance. Both elements of payment ordered by Mr McKinney were arrived at properly and with jurisdiction. Accordingly, in counsel's submission, the pursuers were entitled to summary decree in this action.

 

[28] Should the court be disinclined to accept counsel's argument in its entirety, it was, he suggested, open to the court to give effect to one part of the motion but not the other. In that connection, counsel for the pursuers referred to the case of Homer Burgess Ltd v Chirex (Annan) Ltd 2000 SLT 277

 

Defenders' submissions

[29] Counsel for the defenders indicated that, were the court to accept the validity of his submissions, then the present action was almost certainly bound to fail.

 

[30] As a starting point, counsel for the defenders looked to the first adjudication in which Mr Stewart, the adjudicator, found that in two respects the works carried out by the pursuers were defective. In consequence of that finding, the defenders were entitled to withhold a total of £26,000.

 

[31] As a reminder of the effect of the first adjudication, counsel referred to page 77 of the standard form conditions and, in particular, clause 39A.7.1 which is in the following terms:

 

"The decision of the Adjudicator shall be binding on the Parties until the dispute or difference is finally determined by arbitration or by legal proceedings or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given."

 

[32] Counsel explained that as a matter of fact, following upon the decision in the first adjudication, no further work had been carried out by the pursuers notwithstanding Mr Stewart's findings regarding defects. These defects had never been remedied by the pursuers. That situation, counsel submitted, contrasted with Mr McKinney's decision in the second adjudication in which he found, expressly, that there were no defects. Counsel for the defenders characterised that finding as verging on the absurd.

 

[33] With regard to clause 16.2 in the Standard Form conditions, counsel submitted that it simply could not be correct to assert that, in the particular circumstances of the present case, it was necessary for the defenders to inform the pursuers, by way of a Schedule of Defects, that there remained outstanding defective work dating back to the outcome of the first adjudication. Such a proposition would be equally absurd given that the pursuers would know only too well that they had taken no action to remedy the outstanding defects.

 

[34] It was submitted on behalf of the defenders that, in the face of a binding finding that defects existed (Mr Stewart's decision refers), Mr McKinney did not have the requisite jurisdiction to proceed in the context of the second adjudication and to hold that there were no defects.

 

[35] Under reference to Mr Stewart's findings at pages 15 and 16 in his decision, counsel reiterated that the pursuers knew perfectly well about the defects involving the ponding and the red chips, yet they simply did nothing about them. Whilst Mr McKinney may have appeared to deal with the question of his own jurisdiction at page 8 within his decision, counsel for the defenders submitted that, overall, the necessary de quo, as he put it, of Mr McKinney's decision was that there were no outstanding defects. When one looked to the third section of the referral notice in the McKinney adjudication (tab 2) it was plain that the subject matter of the dispute was the same subject matter as that placed before the first adjudicator, Mr Stewart.

 

[36] Aside from the final moiety of retention, the sum claimed by the referring party, the pursuers, was the same £26,000 which Mr Stewart had decided that the defenders were entitled to withhold. Accordingly, counsel for the defenders sought to draw a distinction between substance and form. He maintained that, in substance, Mr McKinney had been called upon to deal with the same issues as those faced by Mr Stewart. Mr McKinney had been wrong to characterise those issues in such a way that they appeared to be something new and distinct when, in reality, they were not. The sheer absurdity of the pursuers' claim for payment, when nothing had changed since the decision by Mr Stewart, demonstrated that Mr McKinney's approach to matters was fundamentally flawed. In particular, Mr McKinney lacked jurisdiction to determine the dispute which the pursuers sought to refer to him.

 

[37] Counsel for the defenders then turned to the defenders' second line of argument which was to the effect that the adjudicator's decision had been based upon the terms of a practical completion certificate which was not issued under and in terms of the parties' contract. He drew the court's attention to the certificate in question, which was to be found as part of the defenders' second inventory of productions. Whilst the date of practical completion was given as 23 November 2007, the issue date was said to be 28 November 2007. Nevertheless, the expiry date for the Defects Liability Period was given as 23 November 2008. In the defenders' second inventory of productions, the aforementioned certificate is preceded by a document which appears to be dated 28 November 2007. That document purports to narrate an agreement whereby practical completion was to be issued on the basis of certain conditions "being satisfied by Thursday, 31 January 2008".

 

[38] Under reference to the final 12 lines within answer 7 in the defences, counsel for the defenders argued that a compromise agreement had been reached by the parties. He submitted that such a compromise agreement was not a construction contract and that the pursuers had had no right to refer a dispute to adjudication in the circumstances. Consequently, the adjudicator had no jurisdiction to determine such a dispute. Counsel for the defenders referred to the unreported case of Quality Street Properties (Trading) Limited v Elmwood (Glasgow) Limited, Unreported, 8 February 2002. This was a decision of Sheriff Principal Bowen. Counsel's purpose in doing so was to highlight the fact that the defenders, in terms of the motion, simply required to establish that there was a triable issue. Counsel referred to paragraph 9 of the Sheriff Principal's judgment. The Sheriff Principal had been satisfied that, on the question of whether the dispute between the parties was the subject of a compromise agreement, the pursuers, in Quality Street, had a case to try.

 

 

Decision

[39] In my opinion, the submissions for the pursuers are to be preferred. The (first) Stewart adjudication determined that the defenders' withholding notice was valid and, thereafter, dealt with six grounds for withholding, set out in the notice. Inter-alia, in the Notice of Adjudication, the pursuers maintained that the defenders' grounds for withholding were unfounded in fact. Mr. Stewart considered these issues at the paragraphs 6.9 - 6.58 in his decision (tab 9).

 

[40] Accordingly, the matters referred to the first adjudicator were, indeed, matters of fact concerning things such as whether or not work had been carried out in accordance with the parties' contract. The adjudicator's decision included consideration of the width of a pavement, ponding and the number and dimension of car parking spaces.

 

[41] In contrast, the referral to the second adjudicator, Mr. McKinney, was altogether different. He was not being called upon to investigate the de facto existence of defects or otherwise. As counsel for the pursuers submitted, on a proper analysis, Mr. McKinney was being asked to determine whether there was any contractual basis upon which the monies being sought by the pursuers could still be withheld by the defenders. Counsel for the defenders asserted that, as a matter of fact, none of the defects found established by the first adjudicator, had been remedied by the pursuers. That may or may not be the case. However, even if counsel's assertion were correct, the administration of the parties' contract as a whole, did not thereby come to an abrupt halt.

 

[42] The contract itself, as one might expect, contains specific provisions regarding the stage when "the works have reached Practical Completion". It is beyond dispute that a certificate of practical completion was issued in this case. It bears to have been issued on 28 November 2007, with the date of practical completion being 23 November 2007. In response, the defenders make the following averments in their defences:

 

"Separatim. The adjudicator's decision was based upon the terms of the "certificate of practical completion". That document was not a certificate issued under and in terms of the parties' contract. Such is apparent from the face of the document. Rather, it reflected a compromise agreement which had been reached by the parties."

 

[43] In my view, the approach encapsulated within the foregoing averments, is demonstrably incorrect. In terms of that part of the certificate which provides for certification by the employer's (viz. the defenders') agent, that agent, CRGP Ltd., certified "that under the terms of the contract Practical Completion" had occurred on 23 November 2007 and that the Defects Liability Period would expire, one year later, on 23 November 2008. The defenders' averment to the effect that the document "was not a certificate issued under and in terms of the parties' contract" is patently wrong. In any event, I consider that it would be illegitimate for the court to "look behind" the terms of the certificate. Practical completion is an important and defining stage in most forms of building contract and, in the interests of all concerned, certainty must prevail. By appending his signature to the relevant docquet, the employer's (the defenders') agent was certifying that practical completion had occurred. If the agent not been satisfied as regards that proposition, then he ought not to have signed. The adjudicator, Mr. McKinney was perfectly entitled to proceed upon the basis that a practical completion certificate had been issued. Contrary to the submission of counsel for the defenders, there is, in my opinion, no issue to try as regards the validity of that certificate.

 

[44] The defects liability period commenced with the occurrence of practical completion. As recorded above, the defenders maintain that the 12 month period had come and gone with no remedial work being carried out by the pursuers. Accordingly, they maintain that intimation of a Schedule of Defects (in terms of clause 16.2) was neither appropriate nor necessary. I disagree. In my opinion, the argument presented by counsel for the defenders is flawed because it ignores the fact that the parties' contract and, in particular, its terms and conditions, continued to have force and effect. If, as the defenders maintain, there were outstanding defects as at 23 November 2008, the defenders were obliged (under clause 16.2) to deliver a Schedule of Defects to the pursuers "as an instruction of " the defenders not later than 14 days after 23 November 2008. No such a schedule was delivered. Accordingly, in terms of the parties' contract, there was nothing to prevent the issue of a Notice of Completion of Making Good Defects (under clause 16.4), no defects having been listed under clause 16.2.

 

[45] That was the approach taken by the (second) adjudicator and I consider it to have been the correct approach. However, the defenders' main challenge to the enforceability of the adjudicator's decision, viz. lack of jurisdiction, is predicated upon the contention that Mr. McKinney had been invited to determine what amounted to the same dispute as that referred to Mr. Stewart. It is, in my opinion, apparent from the analysis set forth in the preceding paragraphs that the de quo of the dispute referred to Mr. McKinney was fundamentally different from that referred to Mr. Stewart. It may have involved a desire on the part of the pursuers to procure release of the same monies which Mr. Stewart held should not be released. However, that is where the similarity ends.

 

[46] I respectfully adopt the views expressed by Lord Glennie in the Barr Ltd. case and, in particular, his observations at paragraph 34 therein. The circumstances pertaining to the present case strike me as amounting to a good example of a situation "... where the particular dispute referred to adjudication is another separate and distinct way of seeking to unlock the door to payment of a particular sum." The adjudicator, Mr. McKinney, was, in my opinion, correct to conclude that there was no basis to sustain the defenders' challenge to his jurisdiction.

 

[47] Even if I am wrong about that, I do not consider that the adjudicator was guilty of any ultra vires error of law such as would render his decision unenforceable. Mindful of the Lord Justice-Clerk's comments in the case of Diamond, it appears to me that the adjudicator addressed the relevant and appropriate issues in the context of the adjudication.

 

[48] Accordingly, I have granted summary decree in favour of the pursuers. The expenses of the action have also been awarded in their favour. Both sides were agreed that the cause ought to be certified as suitable for the employment of junior counsel. I have given effect to that agreement. In the event, the court was greatly assisted by able preparation and presentation on both sides of the bar.