The Construction Centre Group Limited V The Highland Council (Part I)

Decision should be enforced by summary decree (judgment) notwithstanding any subsequent arbitration and its amount should not be reduced by setting off the employer's counterclaim where it failed to raise the counterclaim before the adjudicator
 
THE CONSTRUCTION CENTRE GROUP LTD v THE HIGHLAND COUNCIL

Scotland, Outer House, Court of Session
Lord Macfadyen
23 August 2002
 
The adjudicator decided that the employer should pay the contractor a specified sum of money. The contractor applied to the court for the enforcement of the decision (in the Scottish courts) by way of summary decree (judgement). The employer opposed the enforcement of the decision on two grounds.
 
The first ground was that there was an incompatibility between such a decree and the provisional nature of the decision and that the granting of such a decree would prevent any arbitrator from making an award of a lesser sum than the amount of the adjudicator's award. Lord Macfadyen  rejected this ground on the basis that the decree would (merely) represent the enforcement of the employer's obligation to make payment in accordance with the adjudicator's provisional determination and that to stay the court proceedings pending arbitration (in accordance with the employer’s application) would be to ignore the contract’s provisions that the decision was to be implemented pending the dispute’s final resolution by arbitration.
 
The second ground was that there is nothing in the Construction Act 1996 or in the contract to suggest that a defendant was to be deprived of its entitlement to exercise a right of retention in respect of its counterclaim for liquidated damages to be set-off against the sum awarded after the decision’s issue. Lord Macfadyen rejected this ground on the basis that the employer was not deprived of its right of retention or set-off in respect of liquidated damages but lost it by not advancing it before the adjudicator (which it could have done without the need for a section 111 withholding notice), that the adjudicator would have been obliged to address the question of the right of retention in the event of the employer having advanced it before him and that it would have been inconsistent with the enforceable quality of the decision conferred by the Act to allow the right to be advanced as a defence to an action to enforce the decision.
 
Advice Note
The first ground rejected by Lord Macfadyen of an incompatibility between such a decree and the provisional nature of the decision emphasises the policy of the courts throughout the UK that summary judgment (decree) represents the “normal” way of enforcing decisions. The second rejected ground of purported set-off of a counterclaim has been upheld on appeal by the Inner House of the Scottish Court of Session.
 
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