Sw Global Resourcing Ltd V Morris & Spottiswood Ltd

The alleged logical inconsistences and demonstrable irrationality in the adjudicator's decision did not mean that it was open to judicial review in Scotland on Wednesbury grounds
 
SW GLOBAL RESOURCING LTD V MORRIS & SPOTTISWOOD LTD
Scotland, Outer House, Court of Session
Lord Hodge
28th December 2012
 
The contractor contended that the logical inconsistencies and demonstrable irrationality in the adjudicator’s decision meant that it was open to judicial review on Wednesbury grounds. The alleged contradiction on which the contractor relied was the apparent contradiction in the adjudicator’s statements with regard to his assessment of overheads. The alleged inconsistency was the adjudicator’s treatment of the absence of a benchmark contract period against which to measure prolongation or to allow notices to be served. Whilst the contractor accepted that the courts were reluctant to scrutinise closely the interim decisions of adjudicators and, in particular, to challenge decisions on the ground of unreasonableness and that the presumption of regularity and propriety prevented most Wednesbury challenges, it submitted that such a presumption had to give way to the kind of irrationality demonstrated in the instant case by the adjudicator.
 
Lord Hodge rejected the contractor’s contention. In so doing he stated that where the court does not overturn an adjudicator's decision when he has been shown to have made factual or legal errors, it must take more than internal contradictions to justify intervention. Where the adjudicator is asked to make interim decisions under tight time constraints, the Wednesbury ground of review will only be applied, if at all, if the mistake has the hallmarks of irrationality set out by Lord Diplock in CCSU v Minister for the Civil Service (1985).
 
As to the apparent contradiction in the adjudicator’s statements with regard to his assessment of overheads (i) That contradiction might be no more than an infelicity of the wording of the second of his two statements (ii) The adjudicator used a percentage mark up for head office overheads in his calculation of what the sub-contractor was entitled to receive and (iii) The double-counting of the mark up for the head office overheads was no more than an error in calculation which could be corrected in any final determination of the parties' contractual rights.
 
As to the alleged inconsistency in the adjudicator’s treatment of the absence of a benchmark contract period against which to measure prolongation or to allow notices to be served, (i) There was no obvious benchmark in the sub-contract and (ii) The time attributed to the sub-contract was a matter of dispute that the adjudicator had to resolve.
 
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