1) final determination of issue on enforcement D McLaughlin & Sons Ltd v East Ayrshire Council [2020] CSOH 109 Lord Clark Counterclaim – The broad question in this case was whether the principles derived from the English case of Hutton [6] were to be applied to enforcement proceedings in Scotland. Background In Hutton Coulson J set out (as was now widely accepted), that an adjudicator’s decision could only be challenged at enforcement on narrow grounds, namely lack or excess of jurisdiction and breach of natural justice. An award could not be resisted at enforcement for the reason that it contained an error of law or fact, subject to one narrow exception. That is where the point at issue was self-contained and capable of being finally determined swiftly and without need for oral evidence, for example a point of law or of construction of the contract which if answered would finally resolve the dispute. The pursuer asserted that the final certificate failed to include one of the 27 interim certificates of payment issued during the course of the contract, with the result that the final certificate was under-valued. It had commenced court proceedings in September 2019 to challenge the final certificate and then in March 2020 started adjudication proceedings claiming the sum due upon the July 2017 interim payment notice, in respect of which the defender had failed make payment or to give any pay less notice. The adjudicator found for the pursuer and awarded them £428,000.
The enforcement proceedings The defender now argued that the adjudicator had fallen into error in failing to treat the final certificate as being conclusive as to the sum due[7]. The parties’ JCT Standard Building Contract with Quantities, 2011 Edition required the final certificate to be challenged within 60 days, failing which it became conclusive as to the sum due. The pursuer argued that its court proceedings were sufficient to comply with this requirement, and the defender disputed that assertion. This then was the issue which the defender urged the court to decide since otherwise it would be unable to rely upon the error of law (if that is what it was) to avoid enforcement. Lord Clark reviewed the English and Scottish authorities. He questioned whether in Hutton , Coulson J. considered the short question of law that arose as being an exception to the normal rule, or whether he was simply applying section 108(3) of the Act and paragraph 23(2) of the Scheme, each of which provided for final determination of the dispute decided by the adjudicator. Either way he saw no difficulty with the application of the principle. Whilst there was no procedure in Scotland equivalent to the English Part 8 procedure seeking a declaration, the defendant in Scotland was entitled to lodge a counterclaim and the court could decide if it was just and convenient to make a final determination upon it at the enforcement stage. In this case, Lord Clark decided that the issues raised by the counterclaim did not fall within the Hutton criteria, that determination of the conclusivity point of itself would not finally resolve the larger dispute, including the question of the validity and effect of the payment notice in question. Further Lord Clark was mindful that as part of his consideration in Hutton , Coulson J. had suggested that the court would look to see whether the decision was “beyond rational justification” or “obviously wrong” indicating that the criteria for the exception may include such matters. As regards the adjudicator’s decision here it was not “beyond rationally justifiable”. Therefore the challenge failed.
[6] Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] BLR 344 [7] Trustees of Marc Gilbard 2009 Settlement Trust v OD Developments and Projects Ltd [2015] EWHC 70 (TCC)
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