Prentice Island Ltd v Castle Contracting Ltd

The employer was entitled to enforce that part of the adjudicator's decision ordering the contractor to pay it one half of the adjudicator's fees notwithstanding the contractor's contention that the decision was a nullity
 
PRENTICE ISLAND LTD v CASTLE CONTRACTING LTD

Sheriffdom of Tayside Central and Fife
Sheriff Principal RA Dunlop QC
15 December 2003
 
The adjudicator made a decision that included an order for the contractor to reimburse the employer one half of his fees where the employer had already paid the adjudicator all his fees. The contractor contested the validity of this order on the ground that the decision as a whole was a nullity by reason of the dispute referred being the same or substantially the same as a dispute that had previously been referred to adjudication. The Scheme for Construction Contracts applied to the adjudication. Paragraph 25(1) of the Scheme provided that the adjudicator was entitled to payment of such reasonable amount as he might determine by way of fees and expenses incurred by him and the parties were to be jointly and severally liable to pay that amount to the adjudicator.
 
Sheriff Principal RA Dunlop rejected the contractor's contention on the basis that the adjudicator in good faith decided that the dispute was not (substantially) the same and that the adjudicator's entitlement to his fees was a free standing one which existed independently of his decision and irrespective of the decision's validity. A validly appointed adjudicator might be called upon to make a decision about whether the dispute was (substantially) the same as one previously adjudicated and if he in good faith wrongly decided that the dispute was not (substantially) the same, he nevertheless remained a validly appointed adjudicator until he either resigned or was stopped by the court from acting. The adjudicator's entitlement to his fees was a free standing one which existed independently of his decision and irrespective of the decision's validity insofar as a distinction could properly be drawn between the process on which the adjudicator was engaged and the product of that process, ie the decision on the merits of the dispute referred. The whole purpose of the adjudicator's appointment was that he should determine the dispute referred, the issue of the decision exhausted the referral process and at that stage the adjudicator became entitled to determine his fees.
 
Advice Note
If an adjudicator makes a decision in good faith he is entitled to his fees notwithstanding that it might ultimately be held by a court that he made his decision without jurisdiction.
Download