This was an appeal against an initial decision of 7 May 2003 by the Sheriff. The defenders maintained that the subject matter of the dispute referred to adjudication was substantially the same as that which had been previously decided. However, the Adjudicator decided that the dispute was not substantially the same, and went on to issue a decision on 15 March 2001. In that decision he found that the defenders were liable for a payment in respect of the final account, and damages. He also decided that the defenders should pay one half of his total fee in the sum of £1,922.70 (including VAT).

The defenders argued that the Adjudicator's decision was a fundamental nullity because the decision referred to him was substantially the same as one that had already been decided. Under such circumstances they argued, pursuant to the Scheme, that the Adjudicator could resign at any time, (paragraph 9(1)) and must resign if the dispute was the same or substantially the same as one that had been previously referred to adjudication (paragraph 9(2)). They argued that the payment of the Adjudicator was conditional on the issuing of the decision, and that the decision in question was ultra vires and there was therefore no decision at all.

The pursuers contended that the fees of the Adjudicator were a separate issue dealt with at paragraph 25(1) of the Scheme. That paragraph allowed the Adjudicator to determine his own fees, and made the parties jointly and severally liable for those fees.

The Sheriff Principal decided that where an Adjudicator was validly appointed and acts in good faith then he remains validly appointed until he resigns or is stopped from acting by the court. He noted that no steps were taken to prevent the Adjudicator from continuing to act, and also that the Sheriff at first instance had considered that it would be intolerable if an 'Adjudicator be deprived of his fees because his decision turns out to be mistaken after an examination by the court. The Sheriff Principal had stated at paragraph 17:

"The Sheriff has taken the view that the Adjudicator's entitlement to the fees in terms of paragraph 25(1) is a free standing one, which exists independently of his decision and irrespective of its validity. Subject to my comments in the next paragraph, in my view that approach is the correct one. It seems to me that a distinction can be drawn between the process upon which the Adjudicator is engaged and the product of that process, namely the decision on the merits of the dispute referred to them. That decision may ultimately be found to be a nullity, but so long as the Adjudicator has in good faith remained in post in my view paragraph 25 gives him a right to be remunerated for his work in that capacity."

He therefore refused the appeal. In doing so, he drew a distinction between the pressures of engaging an adjudicator to deal with the subject matter, and the independent obligation to pay the Adjudicator providing the Adjudicator is acting in good faith.