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

An event taking place after the making of a decision which removed the contractual basis for the decision did not mean that the court should not subsequently enforce the decision The defendant's potential right of set-off against the sum awarded was not be taken into account in the court enforcement proceedings where it did not raise that right before the adjudicator
 
THE CONSTRUCTION CENTRE GROUP LTD v THE HIGHLAND COUNCIL (Part II)

Scotland, Inner House, Court of Session
Lords Osborne, Hamilton and Carloway
11 April 2003
 
 
The employer advanced two contentions as defences to the court enforcement proceedings brought by the contractor to enforce the adjudicator’s decision in its favour.
 
The first contention was based on the employer having entered the site and having expelled the contractor under clause 63(4) of the ICE Fifth Edition after the court hearing at first instance. The contractor argued that it was not liable under that clause to pay “any money on account of the contract” until the end of the maintenance period and until all the employer’s expenses of completing the works etc had been ascertained, certified and deducted from what otherwise would have been due to the contractor.
 
The Inner House rejected this contention on the basis that the courts should lend assistance to the prompt enforcement of decisions made within the scope of their jurisdiction. Whilst the contractual machinery prevented the immediate recovery by the contractor of further monies due to it under the contract, an adjudicator’s decision was provisional in character, was reached against the existing circumstances at the time of the adjudication and was intended to have immediate effect.
 
The second contention advanced by the employer was that it had a contra debt for liquidated damages for delay which it could in effect “set-off” against the amount awarded in the contractor’s favour by the adjudicator.
The Inner House rejected this contention as well. Firstly the employer had failed to rely on such a defence before the adjudicator. Secondly the employer could not plead compensation in the court enforcement proceedings consistently with its contractual obligation to give immediate effect to the decision.
 
Advice Note
An event taking place after an adjudicator’s decision is made which has the contractual effect that the amount awarded is no longer due will not necessarily provide a good reason for the court not to enforce the decision. In addition the courts will not in enforcement proceedings generally have sympathy with a defendant with a potential right of set-off available at the time of the adjudication which does raise it before the adjudicator
 
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