3) Natural Justice – Use of quantity surveying: Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd  CSOH 110 In a first adjudication, the defenders sought and obtained an award for payment of the sums claimed in its Termination Application under an NEC3 contract, in respect of which the pursuer was held to have failed to give effective withholding notices. Following a second adjudication between the parties, to determine the ‘true’ value of the defender’s ‘Termination Application’, in which the values in the Determination Application were reduced, resulting in a payment due back to them, the pursuer sought payment of the sums awarded. The defender resisted on four grounds, failing on three and succeeding on one. Ground 1 – The value of base scope works. The complaint was that the adjudicator Mr Bunton had failed to give any or adequate reasons for preferring the pursuer’s valuation. The court held the reasonable reader of the decision would be able to discern from it and the submissions, why the adjudicator had reached his decision. The pursuers had alleged an overpayment for preliminaries before termination and the defenders denied any overpayment. The adjudicator accepted the pursuers’ figure. This was an instance where the acceptance of one position was sufficient reason for the rejection of the opposite position. That acceptance sufficiently disclosed the reasons for the decision. Ground 2 – Base scope works failure – failure to consider a ground of defence. The averment was that on a fair reading of paragraph 183 of the decision, the adjudicator had failed to have regard to an experts’ report (the Cookson report) relied on by the defenders.
The court decided that the defender’s reading of paragraph 183 of the decision was incorrect. This paragraph concerned Compensation Event no 8 rather than base scope works and in the context of the immediately preceding paragraph, was based on the absence of records to support Cookson’s figure. So there was no failure to consider the Cookson report in that context and no reason to suppose such failure impacted on the figure for the base scope works. The adjudicator criticised the absence of records to support the Cookson figure or any evidence (site records / actual costs) to support Cookson’s opinions. The adjudicator had not failed to exhaust his jurisdiction. Nor did the adjudicator regard himself as ‘capped’ by the Termination Application figures where the corresponding sum claimed in the adjudication was higher by reference to the Cookson report, it being the case that he awarded more than the Termination Application figure or another head of claim. Further there was no real difference between the Termination Application base scope works figure and the Cookson figure. Even if the adjudicator had considered himself capped by the Termination Application figures, the cap for the base scope works was far in excess of the value arrived at. The court rejected the contention that the adjudicator had failed to consider a material defence, or acted in breach of natural justice by not telling the parties that he proposed to cap his valuation by reference to the figures in the Termination Application. Ground 3 – Termination costs. Cookson had departed materially from the defender’s claim in the Termination Application and put in a higher figure. The adjudicator agreed with the pursuer’s figure. It was claimed that in so doing the adjudicator had failed to consider or give reasons for rejecting the defender’s and Cookson figure.
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