Building contract — Dispute — Adjudicator ordering claimant to pay his fees and expenses — Contract between parties providing for sharing of fees and expenses — Whether claimant entitled to repayment of sum in respect of adjudicator’s fees — Whether unjust enrichment valid ground for challenge — Claim dismissed
The parties had entered into a contract under which the defendant was to carry out building works to the claimant’s premises The contract was concluded by tender and acceptance but no written agreement was entered into.
Disputes arose between the parties during the course of the works and the claimant withheld sums that were due for payment under an interim certificate. An adjudicator was appointed. He ordered that the interim certificate should be opened, reviewed and revised, thereby increasing the sum due under it. He also ordered the claimant to pay his fees and disbursements, although the parties were jointly and severally liable for payment of those costs under the terms of the contract.
The claimant subsequently alleged that the work was defective and commenced an action to recover sums paid to the defendant, either under the provisions of the contract or by way of damages for breach of contract. The same adjudicator ordered the defendant to reimburse the claimant, the difference between the amount already withheld by the claimant and the amount of their claim. He further ordered that the claimant should be liable for his fees in respect of the second adjudication.
The claimant commenced proceedings claiming, inter alia, repayment of sums paid in respect on the adjudicator’s fees and disbursements on grounds of unjust enrichment of the defendant.
An issue arose as to whether the claimant was entitled to recover the sums claimed and whether the principle of unjust enrichment was a valid ground upon which to challenge an adjudicator’s decision made under the terms of the contract.
Held: The claim was dismissed.
The adjudicator’s decision as to liability for his own fees and expenses was final and could not be challenged directly in the courts on the ground that it was wrong on the facts or in law. There was nothing in the contract providing for a reconsideration of his decision.
The scheme of the contract allowed for an indirect challenge to any finding made by the adjudicator by way of court proceedings or arbitration. However, that applied only to the underlying dispute, not to his decision on his fees and expenses, which was an ancillary finding and not a dispute in the contractual sense.
In any event, court proceedings were free-standing and not an appeal against the adjudicator’s decision. They could supersede the adjudicator’s decision only to the extent that disputes or differences were specifically raised and decided in the court proceedings. However, they did not render the adjudicator’s decision a nullity, even if the court were to reach a contrary conclusion. Accordingly, they did not affect the decision on liability for the adjudicator’s fee and expenses.
Furthermore, since the benefit alleged to constitute the enrichment resulted from the operation of the contract, there was no basis for recovery on the ground of unjust enrichment: Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1998 SC (HL) 90; [1998] 3 EGLR 79; [1998] 51 EG 83 considered.
Andrew Renton, solicitor (instructed by Dundas & Wilson CS, of Edinburgh) appeared for the claimant; Robert Howie QC (instructed by MacRoberts, of Edinburgh) appeared for the defendant.
Eileen O’Grady, barrister
