DCSIMG

Council loses legal battle over £3m bill

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A civil engineering firm yesterday won a new legal battle with Fermanagh District Council over a disputed £3 million bill for waste management work.

Gibson Banbridge Ltd went to the Court of Appeal to challenge a decision to extend time for notification of arbitration moves.

Three senior judges backed the company’s case after concluding that the council had adopted a “high risk strategy” in the case.

The case centred on payment for the construction of a waste management facility.

In October 2012 an adjudicator decided the council should pay Gibson more than £2.1m plus VAT and interest.

But an impasse developed when the local authority instead calculated that the amount due was just over £300,000 plus tax.

High Court proceedings were lodged by Gibson in a bid to get the adjudicated sum.

Fermanagh District Council resisted the application, arguing that the adjudicator had no jurisdiction since no dispute existed at that stage.

It was also contended that the adjudicator breached the rules of natural justice by not allowing sufficient time to respond.

Both submissions were rejected by the High Court judge, leaving the council facing a total bill of around £3m.

However, the case ended up in the Court of Appeal on a point about the extension of time for notice of intention to refer the dispute to arbitration.

Delivering judgment yesterday, Lord Justice Girvan said: “Fermanagh adopted a high risk strategy of ignoring the adjudicator’s assessment, contesting Gibson’s claim to enforce the adjudicator’s settlement figure in the High Court proceedings and not serving a notice of intention to refer to arbitration under the agreed terms of contract.”

He added: “Fermanagh’s rejection of the jurisdiction of the adjudicator was misconceived.”

The judge held there was no reason to think the parties intended anything other than the notification requirements under the contract should be taken within the agreed timeframe.

“We must allow the appeal on that basis,” he said.

 

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