Case summary: Treasure & Son Ltd vs Martin Dawes

This was an application summarily to enforce an adjudication decision. The claimant, Treasure and Son Ltd was engaged by the defendant, Martin Dawes, to carry out extensive works of refurbishment and restoration at his Manor in Herefordshire. The parties entered into a contract on the JCT Standard Form of Prime Cost Contract (1998 Edition with Amendments 1 and 2).

The adjudicator sent out an unsigned but final decision in which he decided that Mr Dawes should pay to Treasure £1,018,821.12 plus VAT, plus interest and the adjudicator's fee and expenses.

Mr Dawes defended the summary judgment application on a number of grounds.

Issues

The main issue raised by Mr Dawes was that the adjudicator did not have jurisdiction. He said that if there had been an oral variation of the written construction contract, that meant that the adjudicator had no jurisdiction to decide the dispute. Mr Dawes also said that the decision had to be signed in order to be a valid decision.

The decision

Judge Akenhead decided that it did not matter whether the written contract had been orally varied. That is only a relevant question when one party is trying to enforce a decision from an adjudication brought under the Construction Act. In this case, the right to refer the dispute to adjudication arose under the terms of the contract itself.

There was no suggestion in the JCT contract, that the parties intended this right to be undermined if the contract was orally varied. As the judge put it: “the parties will have agreed in a binding contract that disputes will be referable to adjudication. If there was some oral variation to the terms of that contract, that does not itself undermine the contractual enforceability of the adjudication process.”(para 31)

This part of his decision is significant, but not new, for example see Dean and Dyball Construction Ltd vs Kenneth Grubb Associated [2003] EWHC 2465 (TCC).

The judge also considered the argument that the contract, even if orally varied, was nevertheless a construction contract in writing for the purposes section 107 of the 1996 Act. Treasure argued that the contract came within section 107 because the parties had exchanged written submissions during the adjudication in which Treasure had alleged, and Mr Dawes had not denied, the oral variation. This, Treasure submitted, qualified as a contract in writing under section 107(5) of the 1996 Act which states:

"An exchange of written submissions in adjudication proceedings, or in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response constitutes as between those parties an agreement in writing to the effect alleged."

Mr Dawes resisted this argument, relying on the decision of Judge Bowsher QC in Grovedeck Ltd vs Capital Demolition Ltd [2000] EWHC 139 (TCC). In that case Judge Bowsher QC had decided that such an exchange of submissions could not qualify as an agreement in writing in the adjudication in which the exchange takes place, only subsequent adjudications. Judge Akenhead did not agree. Indeed, he expressly disapproved of Judge Bowsher QC’s decision and accepted Treasure’s arguments on the point (para 44).

On the question of a signature, the Judge decided that no signature was necessary to make the decision a valid one. Again, the issue resolved around the wording of the contract. The parties had not expressly provided that a decision had to be signed to be effective, and there was no reason to imply such a term.

Lessons

There are notorious difficulties in pursuing and enforcing adjudications under the Construction Act where the construction contract between the parties has been orally varied. Even if an adjudicator can be persuaded to make a decision, there is often a costly (and unsuccessful) battle to enforce it.

The lesson from this case is clear. If you wish to avoid these difficulties, provide for adjudication as a clause in the construction contract; and then bring the adjudication pursuant to that clause, not under the Construction Act.

Michael Taylor acted for Treasure and Sons in this case. He is a barrister at 4 Pump Court, www.4pumpcourt.com.