Reference to counsel without the knowledge of the parties a breach of natural justice

In Highlands and Islands Airports Ltd v Shetland Islands Council [2012] CSOH 12, 2012 Scot (D) 13/2 Lord Menzies held that an adjudicator had breached the principles of natural justice when he sought confirmation of his view on a point of law from senior counsel and did not inform the parties of the steps that he had taken, nor give to them an opportunity to comment on the point of law concerned. The point of law was held to be of considerable potential importance to the parties and so it could not be said that the breach of natural justice had been peripheral or irrelevant. Lord Menzies also held that it was not possible to sever and enforce the part of the award which was not affected by the breach of natural justice because the dispute which the parties had referred to adjudication was a single dispute and so had to stand or fall as a whole. Finally, Lord Menzies rejected the submission that the defendant had approbated the decision of the adjudicator and so he held that the pursuer was not entitled to enforce the decision of the adjudicator.

The facts

The parties entered into a contract under which the defender agreed to provide the pursuer with design, consultancy, planning services, project management and construction supervision in connection with the construction of a runway extension at an airport on Shetland. After the works had been completed, there was a dispute between the parties as to whether or not aspects of the work had been done defectively. The contract was a construction contract and, as such, fell within the Housing Grants, Construction and Regeneration Act 1996. The pursuer had the right to refer any dispute with the defender to adjudication and it did so in relation to this particular dispute.