Refurbishment works – Contract in writing – Dispute – Parties making oral variation of original written contract – Adjudicator making award in claimant’s favour – Adjudicator failing to sign decision – Whether adjudicator having jurisdiction to make award – Whether award enforceable – Whether appropriate case for staying execution – Application granted
The defendant engaged the claimant to carry out extensive works of refurbishment and restoration pursuant to a contract made in 2000 that incorporated the JCT Standard Form of Prime Cost Contract (1998 ed with amendments 1 and 2). Both parties accepted that that contract was a written construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996. A dispute arose concerning the claimant’s entitlement to payment for work done, which was referred to adjudication under the terms of the written contract.
The adjudicator made an award in favour of the claimant. This included a sum arising out of an alleged oral variation to the original contract that had been communicated to the parties by fax and a covering letter. Owing to an oversight, the adjudicator did not sign the decision letter. When the defendant failed to pay, the claimant issued proceedings to enforce the award, together with an application for summary judgment.
The issues for the court were whether: (i) an oral variation of the terms of the original written construction contract led to the adjudicator having no jurisdiction; (ii) the absence of a signature on the decision meant that there was no enforceable decision by the adjudicator; and (iii) if the decision were otherwise enforceable, there should be a stay of execution, in case the claimant was unable to repay the moneys should an arbitrator conclude that the adjudicator’s decision was wrong.
Held: The application was granted.
(1) Where there was a contractual agreement to adjudicate, that process was not undermined, jurisdictionally or otherwise, by the fact that the terms of the original contract had been varied orally. The adjudication process would be undermined only if the contract contained an express term to the effect that oral variations of its terms would not be treated as valid unless recorded or evidenced in writing.
In the present case, there was nothing in the written contract requiring it to be treated as anything other than a contractual agreement, even though the adjudication provisions might not have been in the standard form agreement but for the 1996 Act. One had to distinguish between a construction contract that expressly contained an adjudication agreement and one that did not. In the former, an oral variation of terms would not undermine the adjudication agreement. In any event, there was no evidence of an oral variation of the original contract: RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270; [2002] 1 WLR 2344 distinguished; Dean & Dyball Construction Ltd v Kenneth Grubb Associates Ltd [2003] EWHC 2465 (TCC); [2003] 100 Con LR 92 and KNS Industrial Services (Birmingham) Ltd v Sindall Ltd (2001) 3 TCLR 10 considered.
(2) As a matter of simple statutory interpretation, it was clear that the adjudicator’s decision did not have to be signed by him. Although a decision signed by the adjudicator would plainly demonstrate that it was his decision, the contract provisions were still operable if it could be shown, as a matter of evidence, that a decision was that of the particular adjudicator. In the present case, it was not necessary, on any commercial or practicable basis, to infer that a decision that was clearly that of the adjudicator had to be signed: Bloor Construction (UK) Ltd v Bowmer & Kirkland (London) Ltd [2000] BLR 314 considered.
(3) Judgment would be given for the claimant with no stay of execution. Adjudication was designed to be a quick and inexpensive method of arriving at a temporary result in a construction dispute. Consequently, adjudicators’ decisions were intended to be enforced summarily and a successful party should generally receive its money. The claimant was a long-established and solvent company that enjoyed a reasonably substantial turnover and a comfortable gross profit margin. On the facts and evidence, this was not an appropriate case for a stay: Wimbledon Construction Co 2000 Ltd v Vago [2005] EWHC 1086 (TCC); [2005] BLR 374 applied.
Michael Taylor (instructed by Contract & Construction Consultants (Southern) Ltd) appeared for the claimant; Andrew Singer (instructed by George Davies & Co) appeared for the defendant.
Eileen O’Grady, barrister
