Contract – Adjudication – Enforcement – Adjudicator ruling in favour of claimant in respect of outstanding fees for architectural services – Claimant applying for summary judgment to enforce adjudicator’s decision – Whether contract existing between parties –Whether purported contract valid – Whether crystallised dispute between parties – Application granted
The claimant provided architectural services. The defendant was a company incorporated in the Cayman Islands which was the leasehold owner of a property known as King’s Observatory in Kew in Richmond. B was a director of the defendant company who lived in Hong Kong. In March 2010, he approached the claimant, requesting it to act as architect for proposed works to turn the property from commercial use into a residential dwelling. On 9 July, the claimant sent a fee proposal to B. The claimant’s appointment was to be based on RIBA’s standard form of agreement for historic buildings or conservation projects. The proposal set out the proposed areas of work, some to be charged on a lump sum basis and one on a time charge basis, with provision for additional services to be added. The works commenced shortly after the fee proposal. The claimant subsequently sent a further letter to B and enclosed a draft copy of RIBA’s appointment documents, including the standard conditions and a memorandum of agreement which identified B as the client. The claimant then had a meeting with B who agreed to the fee proposal and signed it as the defendant’s director.
During the course of the works between 2010 and 2017, all invoices were sent by the claimant to B via email in Hong Kong. The fees were paid variously either by B directly, or by the defendant. By 2018 a dispute had arisen in respect of fees due to the claimant for work commenced in 2015. The claimant served a notice of intention on the defendant to refer the dispute to adjudication for outstanding invoices based on the contract entered into around October 2010. The defendant argued that the adjudicator did not have jurisdiction because (i) there was no contract between it and the claimant; (ii) in any event, the purported contract was not in writing or evidenced in writing as required by section 107 of the Housing Grants, Construction and Regeneration Act 1996; and (iii) there was no crystallised dispute between the parties because the invoices were issued in B’s name. The adjudicator rejected the challenges in respect of jurisdiction and held that the claimant was entitled to the outstanding fees.
The claimant applied for summary judgment to enforce an adjudicator’s decision. The defendant continued to rely on the jurisdictional issues and argued that, even if there was a contract, it fell foul of section 107 because it had been varied orally as regards the method of remuneration.
Held: The application was granted.
(1) The court would apply a robust approach to the enforcement of adjudicators’ decisions provided that there was no issue as to jurisdiction and provided that there was no breach of the rules of natural justice. It would only be in very rare cases that adjudication enforcement applications would result in trials of issues relevant to that enforcement issue. In this case, the jurisdictional challenges went to the heart of whether or not the adjudicator had jurisdiction. In order to fall within the definition of a construction contract for the purposes of the 1996 Act that was then in force, the claimant would have to establish a construction contract in writing, or evidenced in writing. If the defendant had a real prospect of establishing that there was no contract or a contract subject to an oral variation not within section 107, it would be able to establish that the adjudicator did not have jurisdiction and that his decision was invalid: Dacy Building Services Ltd v IDM Properties LLP [2018] EWHC 178 (TCC) applied.
(2) Looking at the documentary evidence, there was a concluded contract between the claimant and the defendant for the provision of architectural services. The fee proposal had been signed by B expressly in his capacity as the defendant’s director. As a matter of contract law, there was an offer which was accepted by B on the defendant’s behalf. That analysis was confirmed by a subsequent email, which had solicited no response. The clear contemporaneous evidence was that the parties had treated the contract as between the claimant and the defendant. Accordingly, there was a concluded contract on the terms of the fee proposal between the claimant and the defendant.
(3) The mere invoicing of the fees by sending them to the director of the company by email was simply a convenient way of notifying the defendant through its director of the fees then being pursued. On that basis, insofar as all fee invoices were sent to B, it was in his capacity as director of the company. There was therefore a crystallised dispute in relation to the unpaid fees that could be referred to adjudication.
(4) Having decided that the jurisdiction challenge had been fairly taken by the defendant during the course of the adjudication, the court should consider it. However, on a proper construction of the documents before the court, there was no evidence of a separate oral variation or separate oral agreement that would fall foul of section 107, thereby depriving the adjudicator of jurisdiction. The original fee proposal on which the parties’ contract was based identified the fact that some of the services to be provided would be on a time charge basis, and some would be on a lump sum fee basis. Therefore, this was a contract that provided for additional services to be dealt with by way of payment, either on a time charge basis or a lump sum basis, and there was no need for an oral variation to accommodate such additional services. Neither party had asserted any specific oral agreement for an identified scope of work to be carried out on a lump sum basis, or on a time basis. The court was satisfied that there was no real prospect of the defendant succeeding in a challenge to the jurisdiction of the adjudicator. Therefore, the defendant had no defence to the application for summary judgment: Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd [2019] EWCA Civ 27; [2019] PLSCS 20 followed.
Paul Cowan (instructed by Kennedys LLP) appeared for the claimant; Andrew Kearney (instructed by Codobo Law, of Bristol) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read a transcript of Donald Insall Associates Ltd v Kew Holdings Ltd
