Dickie & Moore Limited v Ronald James McLeish, Mrs Diane McLeish and Catriona Watt as Trustees of The Lauren McLeish Discretionary Trust

Case reference: 
[2019] CSOH 71
Thursday, 12 September 2019

Key terms: 
Adjudicators' decision - Construction contracts – Crystallisation - Enforcement; Final certificates – Jurisdiction - Natural justice- Scotland

Dickie & Moore Ltd (“D&M”), were the building contractor, sought to enforce an adjudicator’s decision against Ronald James McLeish, Mrs Diane McLeish And Catriona Watt (“McLeish & Others”) who together made up the board of trustees. The parties entered into a Standard Building Contract with Quantities for use in Scotland (2011 Edition) contained a provision entitling either party to refer to adjudication any “dispute or difference”. In October 2017, D&M submitted a claim for payment in relation to an interim valuation of £2.265 million; later the architect, representing McLeish & Others, produced a final adjustment statement in 2018 which amounted to £1.894 million. D&M challenged this and served a notice of adjudication. 

Throughout the adjudication McLeish & Others insisted that the adjudicator lacked jurisdiction for this particular case since he had been referring to them as “The Lauren McLeish Trust” rather than individually by name.  They argued that this was an issue because “The Lauren McLeish Trust” was not the name of the contracting party, the Trust was not a legal person and therefore legal rights cannot be made against it.  Finally, they also argued that the purported dispute had not crystallised before the Notice of Adjudication. They believed that since the Trust was not a legal person with legal rights you could not adjudicate against it. 

This claim was dismissed by the adjudicator as it was agreed that on construction of the contract the name of the Trust had been used to represent all of the defendants. They even used the terminology to refer to themselves in their amendments to the contract. 

Lord Doherty, in considering this point, agreed that it was common ground that a trust has no legal capacity.  However, the trustees are the persons who act on behalf of the trustee estate.  He held that it was reasonable that the recipients of the notice of intention to adjudicate would have understood them to be directed at trustees rather than individuals. 

The second submission by McLeish & Others was that the adjudicator’s pupil had provided assistance which neither parties were made aware of until the adjudicator issued his fee-note. Whilst the adjudicator decided that the use of his pupil fell under his duty to assist those who wished to gain experience in adjudication, McLeish & Others were concerned there had been a material breach of natural justice, in that, an opportunity had been afforded for injustice to be done. The parties had had no opportunity to comment on the use of his pupil.  D&M conversely argued that since the pupil had only been used for administrative work the adjudicator would have reached every determination via his own thought. 

Again, considering this position, the adjudicator was cross-examined and confirmed he had undertaken similar actions previously.  Lord Doherty agreed with D&M noting that the services which the pupil provided was essentially administrative.  The adjudicator had reached all material decisions himself on the basis of the information put before the parties.  Therefore, there was no material breach of Justice. 

Finally, in terms of a failure to crystallise the dispute, Lord Doherty noted that “the Court should adopt a robust, practical approach, analysing the circumstances” prior to the notice of adjudication.  Giving consideration to the broader circumstances, he held a “very material” part of the Notice had not crystallised before being served. 

Consequently, the question of whether the dispute could be served arose.  Further submissions were required in that regard.  Overall, one of the four objections raised by McLeish & Others succeeded but the impact remains to be decided. 

This case demonstrates that the Court will take a pragmatic view when considering the arguments raised by parties wishing to resist enforcement of an adjudicator’s decision. 

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Tel: +44 (0)20 7421 1986