Payment application – Validity: Michael Duthie Wilson in the Cause of Graeme Cheyne (Builders ) Ltd v Michael Duthie Wilson [2021] ScotSAC Civ 24 (03 August 2021) This was an appeal by Mr Wilson against the Sheriff’s finding that his defence and counterclaim raised in answer to an application to enforce an adjudicator’s decision in favour of Cheyne had no real prospect of success and the Sheriff’s enforcement of the adjudicator’s award. In 2016 Cheyne as contractor agreed to build a dwelling house for Mr Wilson as employer at Cults Aberdeen using a standard form of building contract “Scottish Building Contracts Committee: Minor Works Building Contract with Contractor’s Design for use in Scotland (MWD/Scot 2016)”. Article 3 identified the Architect/Contract Administrator for the purposes of the contract as “WCP Architects (the William Cowie Partnership Ltd)” and went on to provide at Section 5 that interim payment applications by Cheyne were to be served on WCP, who should then issue interim payment certificates. If WCP did not issue an interim payment certificate, then Cheyne’s application would become the ‘payment notice’ and Mr Wilson would be obliged to pay the sum in that notice unless he gave a timely payless notice. In the period to December 2018 Cheyne submitted 13 interim payment applications to WCP. Interim payment application no 14 (“IPA14”) was duly sent to WCP.
No interim payment certificate was issued and no payless notice was served so that IPA14 became payable on 15 March 2020. Unknown to Cheyne, WCP had resigned some 8 months before they sent them IPA14. Mr Wilson had not troubled to inform Cheyne of this fact not to appoint a new Architect/Contract Administrator as required by contract. Mr Wilson did not pay IPA14 and Cheyne took the claim for payment to adjudication. Mr Wilson contended that IPA14 was invalid because it could not be effectively served on WCP once they had vacated the office of Architect/Contract Administrator. Further, it was not in accordance with the contract in that it did not show how the sum claimed was calculated. The adjudicator found in favour of Cheyne and awarded them £263,357.53 with interest and ordered Mr Wilson to pay her fees. When Cheyne sought to enforce the award in the Sheriff’s court Mr Wilson raised a number of defences and counterclaimed for a declaration that the payment application was invalid. The defences were: i) That IPA14 was invalid and of no effect because it was sent to WCP who were no longer in office and it did not reach him;
ii) The adjudicator had failed to give adequate reasons for her decision;
iii) IPA14 was tainted by fraud in that it contained a request for payment for groundworks as part of which Cheyne had dumped contaminated materials in the garden.
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