The Highland Council v The Construction Centre Group Limited
Case reference:
[2004] ScotCS 221
Friday, 1 August 2003
Key terms: Summary decree - receivership - liquidated damages - withhold court order - balance of convenience
On 11th April 2003 Lord Carloway in the case of Construction Centre Group v Highland Council 2003 SLT 623 granted summary decree against the Highland Council for the payment of £245,469.24 in respect of the decision of an adjudicator relating to the Small Isles and Inverie Scheme. The Highland Council did not pay, and at the time of this judgment the Construction Centre Group Limited were in receivership.
On 14th October 2002 the respondents had been expelled from site. The Highland Council claimed £2,100 for 304 days in respect of liquidated damages, equating to a total of £638,400. This matter was referred to adjudication, and a specific reference to certain sums withheld were made. One of those sums was the £245,469.24 that had been ordered to be paid by the Court. The Adjudicator's decision dated 2nd July 2003 found in favour of the Highland Council for the full amount of £638,400. He therefore concluded that they were entitled to deduct those amount withheld, including the £245,469.24, which Lord Carloway considered was unlawfully withheld.
The Highlands Council argued that the balance of convenience favoured them because the respondents were in receivership and if any money were paid over it would be unlikely to be recovered.
Lord Carloway's opinion was that the Highland Council had been withholding the sum for over a year, and at least many months since the Court had ordered it to be paid. He said:
On 14th October 2002 the respondents had been expelled from site. The Highland Council claimed £2,100 for 304 days in respect of liquidated damages, equating to a total of £638,400. This matter was referred to adjudication, and a specific reference to certain sums withheld were made. One of those sums was the £245,469.24 that had been ordered to be paid by the Court. The Adjudicator's decision dated 2nd July 2003 found in favour of the Highland Council for the full amount of £638,400. He therefore concluded that they were entitled to deduct those amount withheld, including the £245,469.24, which Lord Carloway considered was unlawfully withheld.
The Highlands Council argued that the balance of convenience favoured them because the respondents were in receivership and if any money were paid over it would be unlikely to be recovered.
Lord Carloway's opinion was that the Highland Council had been withholding the sum for over a year, and at least many months since the Court had ordered it to be paid. He said:
"The Court is bound to be less than impressed with a public authority failing to respond with reasonable expedition to the Courts determinations on matters of law governing its relations with private contractors."
He therefore refused the motion for interim suspension.