Ballast plc -v- The Burrell Company (Construction Management) Limited
Case reference:
[2001] ScotCS 159
Thursday, 21 June 2001
Key terms: Application for judicial review of adjudicator’s decision - Meaning of “decision” under the Scheme for construction contracts - Nullity of the decision - Acting ultra vires - Failure to determine the dispute - Departure from JCT conditions
This case concerned an application for judicial review of an adjudicator’s decision. The respondents were involved in a construction project in Glasgow. They employed the petitioners to act as the management contractor for the project under a standard JCT form of management contract. During the course of the works, a dispute arose as to the valuation and payment of the work carried out by the petitioners.
The petitioners referred the dispute to adjudication to which the Scheme for construction contracts applied. The adjudicator decided that he was not in the position to carry out any valuation or find any payment due, because the parties had departed from the (in his opinion already unclear) express terms of the pre-printed contract in numerous respects. He proposed the dispute should be determined by way of ADR.
The point at issue was if, by issuing the decision, the adjudicator failed to meet his obligation to “decide the matters in dispute” (Para. 20(1) of the Scheme).
Lord Reed concluded that the adjudicator’s decision was a nullity and as such not binding. In his opinion the adjudicator acted in a material error. Lord Reed found the petitioners had made substantial allegations which enabled the adjudicator to come to a decision. The sheer departure from the JCT conditions did not necessarily entail that no adjudication could be carried out. Against that background, the mere refusal to decide the dispute meant a misconstruction of his powers and, in consequence, the adjudicator failed to exercise his jurisdiction to determine the dispute.
The petitioners referred the dispute to adjudication to which the Scheme for construction contracts applied. The adjudicator decided that he was not in the position to carry out any valuation or find any payment due, because the parties had departed from the (in his opinion already unclear) express terms of the pre-printed contract in numerous respects. He proposed the dispute should be determined by way of ADR.
The point at issue was if, by issuing the decision, the adjudicator failed to meet his obligation to “decide the matters in dispute” (Para. 20(1) of the Scheme).
Lord Reed concluded that the adjudicator’s decision was a nullity and as such not binding. In his opinion the adjudicator acted in a material error. Lord Reed found the petitioners had made substantial allegations which enabled the adjudicator to come to a decision. The sheer departure from the JCT conditions did not necessarily entail that no adjudication could be carried out. Against that background, the mere refusal to decide the dispute meant a misconstruction of his powers and, in consequence, the adjudicator failed to exercise his jurisdiction to determine the dispute.