The High Court has sent an arbitration award in a dispute between G.L.C. Construction Limited and Laois County Council back to the arbitrator for reconsideration, finding that he could not set off the parties’ possible damages without first assessing what, if anything, each was owed.
In a judgment delivered on 3 March 2005, Miss Justice Laffoy said the arbitrator had made an error of law apparent on the face of his award. The court’s order remits the award to the arbitrator in light of the judgment. It does not decide the merits of the construction company’s claim or the council’s counterclaim.
The dispute arose from a 1984 agreement under which the council employed the company to build 31 houses and two shops at Knockmay, Portlaoise. About a year later, the council ended the agreement on the ground that the company was in default and hired another builder. The judgment expressly avoided deciding the legal status or consequences of that ending. The company’s plant and equipment remained on site, and it did not recover possession of them.
An arbitrator appointed in 2001 heard the parties’ claims. The company claimed damages for alleged breach of contract, including for the plant and equipment, withheld retention money and the valuation of work and variations. The council counterclaimed for alleged breach of contract by the company.
In a June 2004 award, the arbitrator found that the agreement was valid, the company’s claim was not statute-barred and its employment had been properly terminated for failing to proceed with reasonable diligence. He also found that the company’s plant had been taken into the council’s possession and not returned, but said its value could no longer be determined and would in any event be set off against the council’s losses. He awarded no money to either party and directed the company to pay its own costs and the council’s costs of the reference to date.
The company argued that the arbitrator had failed to quantify its loss and wrongly set it off against council losses that had not been quantified or verified. The council submitted that, given the time elapsed and the evidence available, the arbitrator could conclude that neither side had established a loss. The company accepted that it was bound by the finding that its claim was not time-barred; the council accepted the same for the finding that the company’s claim was not statute-barred.
Justice Laffoy held that any damages due to each party had to be assessed before a set-off could be determined. She rejected the separate contention that the award showed a patent error in the arbitrator’s treatment of evidence about council funds allegedly reimbursed by the Department of the Environment. The court did not revisit the underlying claims.