An adjudicator awarded S L Timber the sum claimed on the basis that Carillion had not issued a withholding notice, and so was obliged to pay the full amount claimed. Carillion challenged the enforcement of the decision on the basis that the adjudicators approach was wrong and that S L Timber were trading at a loss. Lord Macfayden held that even in the absence of a withholding notice the claimant had to demonstrate that the amount claimed was due. In other words, the absence of the notice did not relieve the claimant of the ordinary burden of showing what he was entitled to receive. The adjudicator had therefore made an error of law by assuming that the amount claim was payable, rather than investigating the amount due.

However, Lord Macfayden held that the decision was binding as the adjudicator had asked the right question but merely got the wrong answer. In respect of the financial standing of S L Timber, the judge referred to the Act, which states that a decision should not be enforced if the successful party is in liquidation. Lord Macfayden distinguished the English authorities, holding that as S L Timber were not in liquidation the decision was enforceable.

Interestingly, the judges also noted that there was no sanction for failing to serve a section 110(2) notice setting out the amount of the proposed payment. Many thanks to Masons Glasgow for bringing this one to my attention.