St. Andrews Bay Development Ltd v HBG Management Ltd [2003] ScotCS 103

This summary was provided by CMS Cameron McKenna LLP.

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Adjudicators' decisions can be enforced even though given late.

Lord Wheatley, Outer House of the Scottish Court of Session

20 March 2003

HBG commenced an adjudication against its employer, St Andrews, under the JCT standard form, with Contractor's Design, Scottish edition.  On 5 March 2003 (when the adjudicator's decision was due), HBG telephoned the adjudicator at 5pm to ask about her decision.  HBG were told that the adjudicator had reached a decision but did not intend to release it until her fee had been paid (even though an invoice had not yet been sent).  The adjudicator then faxed an invoice for her fee to the parties.  On 6 March 2003 HBG said they would pay the fee.  On 7 March 2003 the adjudicator released her decision.  On 10 March 2003 the adjudicator gave reasons for her decision.  St Andrews claimed that the adjudicator's decision was unenforceable because it was late.

Lord Wheatley, upholding the adjudicator's decision, held as follows:

  1. As well as the mandatory provision of section 108(2)(c) of the HGCR Act 1996 (which requires an adjudicator to 'reach a decision' within 28 days of referral, or such longer period as the parties agree after referral of the dispute), an adjudicator is also required to intimate or communicate the decision to interested parties within the time limit.  Alternatively (the Judge did not have to decide which), an adjudicator is required to reach his decision within the time limits and intimate or communicate it immediately or forthwith.
  2. Although it appeared that the adjudicator had completed her consideration of the dispute on time (i.e. 'reached a decision' by 5 March), she had made no effort to communicate her decision to the parties or to intimate the fact that she had arrived at a decision.  On either interpretation of the HGCR Act 1996, the decision was late.  It was also late under the contract, which provided for the decision to be reached within 28 days (subject to extensions) and then to be sent forthwith to the parties.
  3. 'Forthwith' meant that the decision should be sent immediately or as quickly as possible by what is currently regarded as conventional and universally applicable methods of business communication (e.g. fax or email).  First class post 'might be regarded as archaic'.
  4. The adjudicator was not entitled to delay communicating or intimating her decision until her fees were paid because there is nothing in the Scheme or the contract which allowed this.  Whilst it is perfectly permissible for an adjudicator to come to an arrangement with the parties about the payment of fees, such an arrangement must be accommodated within the statutory and contractual time limits. 
  5. It could not be said that the adjudicator had failed to reach her decision until she had produced the reasons for her decision.  There was a separate provision under the contract for the adjudicator to give reasons.  The issue of whether a decision has been reached could not depend upon the supplementary requirement to give reasons, if requested.
  6. Although the adjudicator's decision had been communicated late, that did not render the decision a nullity and unenforceable.  Whilst an adjudicator's failure to produce a decision within the time limits is undoubtedly a serious matter, the production of a decision two days late was not such a fundamental error that it should vitiate the entire decision. 

Adjudicators' decisions can be enforced even though given late.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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