Practical Law

I really thought we’d seen everything that adjudication could throw up, with all the legal twists and turns of the last 14 years, and then along comes another judgment to catch us all off-guard. While this case may only affect practitioners in Scotland, I think it is still worth mentioning, if only for the surprise factor. I am, of course, referring to Lord Malcolm’s judgment in Whyte & Mackay v Blythe & Blythe.

Whyte & Mackay v Blythe & Blythe

I don’t profess to have a detailed understanding of Scottish legal procedure (although I’m sure many who will read this do, and will correct me if I’m wrong!), but as I read the judgment, the case went something like this:

• Whyte & Mackay had an adjudicator’s decision in its favour. The decision required Blythe & Blythe to pay it just under £3 million. It sought to enforce that decision, which, on the face of it, seemed fairly routine.
• As is often the case, enforcement was resisted, with allegations that the adjudicator had breached the rules of natural justice and had failed to give adequate reasons for his decision. In an unusual twist, Blythe & Blythe also chose to challenge the merits of the claim referred to the adjudicator by way of a counterclaim (the judgment describes this as “enrolled a motion asking the court to allow the lodging of a counterclaim”). It also asked for a declaration that the underlying claim was without merit.
• Whyte & Mackay opposed those parts of the counterclaim that went to the underlying merits of the claim, arguing that the issue of enforcement should not be “tied together” with any dispute over the merits of the claim. Those issues should be heard separately. It argued that to do otherwise would delay the enforcement process.
• Lord Malcolm allowed Blythe & Blythe’s counterclaim, deciding that it was better for both issues to be dealt with together.

I’m not sure exactly where this has left the parties, but I’m guessing there will now be another hearing that has to deal with the substance of the declaratory relief Blythe & Blythe sought. Only then, I assume, will the court consider whether it should enforce the adjudicator’s decision.

What does this mean?

We all know that adjudication is supposed to be available at any time and was intended to be an interim measure until matters were finally decided between the parties. The courts generally adopt a robust approach to enforcement, to accord with the spirit and intention of the Construction Act 1996. Therefore, on the face of it, this looks to me like a clever way of delaying enforcement proceedings and, perhaps, avoiding the consequences of the adjudicator’s decision entirely. In England, parties may use the Part 8 procedure to seek declarations from the court before, during and after adjudication and we have a number of reported judgments on this, including Edwards-Stuart J’s judgment earlier this month (which is a story for another day).

As Alistair Walls noted in his post on the judgment, the English courts are unlikely to follow Lord Malcolm and only time will tell whether other Scottish judges do. I’m not sure it is good for the adjudication process and doubt many practitioners will be raising a glass after this judgment.