William Naylor t/a Powerfloated Concrete Floors -v- Greenacres Curling Limited
The disputes in the two adjudications were substantially the same with the result that the adjudicator in the second adjudication should resign pursuant to paragraph 9(2) of the Scheme for Construction Contracts
26 June, 2001
The contractor which the employer refused to pay the invoice on the ground that the work did not comply with the contractual specification. An adjudication to which the Scheme for Construction Contracts applied was begun by the contractor in which it claimed payment of its outstanding invoice. The employer contended that the contractor had failed to carry out its work in accordance with the contractual specification. The adjudicator nevertheless decided that the employer should pay the outstanding invoice. Shortly after the adjudicator's decision had been published, the employer began a (second) adjudication. The notice of adjudication identified the dispute as being the contractor's failure to carry out the work in accordance with the contractual specification with the result that the work was defective. The contractor contended that the employer was attempting to refer to adjudication the dispute it had referred. The contractor relied on paragraph 9(2) of the Scheme for Construction Contracts which provided that the adjudicator to resign where the dispute in an adjudication was (substantially) the same as one referred in a previous adjudication where a decision had been taken. The contractor petitioned under Scottish court procedure for suspension and interdict to prevent the adjudicator appointed by the employer in the second adjudication from continuing with it and suspend the proceedings in the second adjudication. Lord Bonomy held that the adjudicator in the second adjudication should resign pursuant to paragraph 9(2) of the Scheme. Notwithstanding that in the second adjudication the employer sought as redress damages for alleged breach of contract or the rectification of deficiencies in the work whereas in the first adjudication the contractor sought (and obtained) a decision ordering the employer to pay an outstanding invoice in relation to the work, the disputes in the two adjudications were substantially the same. The disputes in essence were whether the contractor executed the work in accordance with the contractual specification and was therefore entitled to payment. Advice Note The courts will look at the substance of the disputes referred (rather than simply the wording of the notices of adjudication) to decide whether they are (substantially) the same for the purposes of paragraph 9(2) of the Scheme for Construction Contracts.