Cases - Watson Building Services Ltd, Re Application for Judicial Review

Record details

Name

Watson Building Services Ltd, Re Application for Judicial Review

Date

[2001]; [2001]

Citation

S.L.T. 846; ScotCS 60

Legislation

• Scheme for Construction Contracts (England and Wales) Regulations 1998
• Housing Grants, Construction and Regeneration Act 1996

Keywords

Adjudication - Scotland - jurisdiction - judicial review - adjudicator - appointment of adjudicator - Scheme for Construction Contracts

Summary

This was a decision of the Scottish Courts in which Watson Building Services Ltd were seeking judicial review of the decision of an adjudicator.

Watson were the main contractors in respect of building work at a church in Glasgow. They appointed Miller Preservation Ltd as their subcontractors to undertake rot eradication works.

Miller sought to refer various disputes to adjudication. The subcontract did not of itself contain any adjudication provisions, but did incorporate, by reference, provisions from the main contract. The issue arose as to whether or not the adjudication provisions in the main contract had been properly incorporated by reference into the subcontract. Miller took the view that that they had not, that the subcontract was therefore not compliant with the Act and therefore formed the view that the Scheme for Construction Contracts applied. The appointment process that followed was compliant with the Scheme but not the adjudication provisions in the main contract.

The first adjudicator appointed formed the view that he did not have jurisdiction and therefore resigned. Miller sought the appointment of another adjudicator who took a different view and proceeded with the adjudication.

The decision of the second adjudicator was that Watson should pay Miller £7,917.35 plus VAT. Watson did not pay, so Miller raised an action for payment. Watson then commenced these proceedings for judicial review.

Watson contended that the adjudicator was not properly appointed because the contractual mechanism for making an appointment had not been followed. They further contended that, in any event, the adjudicator could only decide disputes arising under the contract and did not have jurisdiction to decide what formed the basis of the contract itself. In purporting to do so he was acting ultra vires.

Miller counter-argued that the question as to the incorporation of the main contract adjudication provisions into the subcontract was one that had been put before the adjudicator and was therefore a point which he had jurisdiction to decide. Having put that point before the adjudicator, the parties were bound by his decision even if it were wrong.

In this case the judge considered that the adjudicator had the power to determine the meaning and import of the subcontract terms, even where such an exercise resulted in his determining a dispute about the validity of his appointment and in effect his jurisdiction. Not only did he have the power and authority to carry out such an exercise, but a question relating to the proper construction of the subcontract terms, and thus the validity of his appointment, was expressly put to him by the parties. Accordingly, he was not answering a question that had not been put. The first respondent having had jurisdiction, and having acted within his jurisdiction, the petition in the judge's view falls to be refused.

The judge considered that Watson, by the explicit terms of their response, chose to place the issue of the proper construction of the terms of the subcontract, and thus the consequential matter of the correct procedure for the appointment of the adjudicator and the question of the adjudicator's jurisdiction and authority, before the adjudicator for his decision. In so doing, the judge considered that Watson unreservedly accepted that the dispute over the proper construction of the subcontract terms, insofar as relating to the appointment of the adjudicator, was to be treated, together with any other disputes (for example, about payment), as a 'dispute arising under the contract' which it was both competent and appropriate for the adjudicator to resolve - with all the consequences flowing therefrom.

The judge further concluded that, in any event, it was his opinion that the adjudication provisions in the main contract had not been effectively incorporated into the subcontract. Therefore the Scheme for Construction Contracts applied, and therefore the adjudicator had been properly appointed in any event.