Having a bawl

I am obliged to solicitor Toby Randle at Simmons & Simmons for letting me have the judgment in Earls Terrace Properties Ltd vs Waterloo Investments Ltd (case number 110 in our adjudication series). There is a point of some interest because none of the previous judgments have had to deal with the particular conundrum here. I will tell you about it in a moment.

First, though, allow me to be a bit of creep. Let's give the court system a pat on the back. It moved ever so quickly on this one. What happened was that Waterloo called for an adjudicator, and received one in the form of Daniel Atkinson. He trotted onto the pitch all kitted-out in shorts, whistle and yellow cards, ready to do the biz.

Hold on, said Earls Terrace, the contract is certainly a construction contract but it came into existence well before these adjudication rules came into force on 1 May 1998. Mr Atkinson pondered this bright idea and decided to stay on the pitch. He blew his whistle for kick-off. The lawyers for Earls Terrace made a beeline for the Technology and Construction Court. They asked for an emergency hearing and got one while the adjudication was only just under way. They asked His Honour Judge Seymour to decide whether the referee had the right to continue. Two barristers quickly prepared and presented their arguments. The judge there and then showed the referee the red card. He had no jurisdiction and went home. Moving at that pace is red-hot. In fact, as I recall, the courts promised to do that four years ago when all this adjudication business started. It would, they said, get immediately on to the right or otherwise to adjudicate. The upshot is a huge saving in the costs of void adjudications. So a pat on the back from a creep.

Now let me tell you about the project. In 1996 Waterloo was engaged as developer and management contractor to convert a group of buildings into posh accommodation in Kensington and Chelsea. The property company, Earls Terrace, called the site high-quality family houses, with swimming pool and landscaped garden. And in that part of London, it has to be a pretty well-off family driving the removal van. Come July 1998, there was a need to renegotiate Waterloo's terms of management, since the job was going to run and run. A deed of variation was signed and sealed. That July 1998 date is after the adjudication rules came into force.

Can you see what is coming? Come late 2001, Waterloo and Earls Terrace fell out over fees. Waterloo whistled for the adjudicator. Earls Terrace said the contract was signed in 1996 and therefore the new rules did not apply to them. No, no, said Waterloo, it was varied and became a 1998 contract. If it was a 1998 contract, Mr Atkinson could stay.

Fancy the judge imagining that property developers in Kensington and Chelsea would ever go ‘bawling and screaming’ at anyone or anything

Waterloo's argument that it was a 1998 deal was based first on the fact that since there was an agreed need for a new deal in 1998, it showed that the original deal was not intended to run this far. Therefore, the latest agreement was itself a "construction contract" as per the Construction Act. Alternatively, the July deed revised the 1996 deal to a 1998 deal. Alternatively, the July deed revised certain terms in the 1996 deal and those terms at least were 1998 terms. I think this is right, but the judgment is difficult to understand here.

The argument for Earls Terrace was that the 1998 deal simply altered the 1996 contract by way of fees payable for the extended period of time for the development to be completed.

The judge said that the actual document dated 1998 was not in itself a construction contract.