Cases - Deko Scotland Ltd v Edinburgh Royal Joint Venture and others

Record details

Name
Deko Scotland Ltd v Edinburgh Royal Joint Venture and others
Date
[2003]
Citation
SLT 727
Legislation
Keywords
Adjudication - costs of adjudication - expenses - taxation by the Auditor of Court - Scotland
Summary

The dispute arose out of the construction of the new Edinburgh Royal Infirmary and Medical School. A company known as Zenith Contract Interiors Ltd was engaged as subcontractor to carry out plasterboard partitioning works. Subsequently a provisional liquidator was appointed to that company and the subcontract works were then novated from Zenith to Deko.

One of the clauses of that subcontract provided as follows:

'The Adjudicator may require any Party to pay or make contribution to, the legal costs of another Party arising in the Adjudication.'

Disputes arose between the parties, and an adjudicator was appointed. He decided that various sums were due to Deko by the Edinburgh Royal Joint Venture (ERJV).

In respect of the parties' costs, the adjudicator ordered that ERJV were liable for one-half of all Deko's costs of, and incidental to, the adjudication, including Deko's legal costs.

This action was brought by Deko claiming payment of the sums found due by the adjudicator and one-half of their expenses of the adjudication.

ERJV argued that Deko's claimed expenses should be confined to judicial expenses (i.e. those costs recoverable in a court action); and secondly that they should be subject to taxation. Further, ERJV argued that they should not be forced to pay the sums claimed until they had been taxed.

The court concluded that the clause referred to above confines the adjudicator to making an award of legal expenses and judicial expenses and that further, the award of expenses made by him is subject to taxation by the Auditor of Court.