Neutral Citation Number: [2010] EWHC 1409 (TCC)

Claim No: 2010-TCC19310

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

 

Royal Courts of Justice

Strand, London, WC2A 2LL

 

Date: 17 th June 2010

 

Before :

 

THE HONOURABLE MR JUSTICE AKENHEAD

- - - - - - - - - - - - - - - - - - - - -

Between :

 

 

ROK BUILDING LIMITED

Claimant

 

- and -

 

 

BESTWOOD CARPENTRY LIMITED

Defendant

 

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

 

Andrew Kearney (instructed by Osborne Clark) for the Claimant

Abdul Jinadu (instructed directly) for the Defendant

 

Hearing dates: 9 June 2010

- - - - - - - - - - - - - - - - - - - - -

JUDGMENT

Mr Justice Akenhead:

Introduction

  1. In these proceedings, now constituted under Part 7 of the CPR, the parties seek clarification and decisions as to the nature of their contractual relationship or relationships, particularly in the context of whether their contract or contracts are construction contracts in writing within the meaning of the Housing Grants Construction and Regeneration Act 1996 ("HGCRA”). An adjudication has already been started but by agreement stayed pending the resolution of these issues by the Court.

The History

  1. Rok Building Ltd ("Rok") was a main contractor engaged to construct residential units at what was known as the Oriental City development at Colindale, London, NW9. The works were on hand to a number of Blocks referenced A to M. Rok had retained a subcontractor, Soundcraft Ltd (“Soundcraft”), to carry out various joinery works but by early 2006 Rok was having some problems with Soundcraft and discussions were taking place as to whether to replace that company.

  2. Rok approached Bestwood Construction Ltd (“Bestwood”) in early February 2006 to see if it could provide, at least initially, joiners on a Labour only basis to supplement Soundcraft’s labour on site. A meeting was held at the site attended by Mr Soora of Bestwood and Messrs Ingram, Craven, McDonald and Jandu of Rok in the week commencing 6 February 2006. I will return to considering what was said and agreed at this meeting when reviewing the evidence later in this judgment.

  3. Following the meeting, Mr Craven of Rok sent a fax dated 9 February 2006 in these terms:

“Please supply 6 No 2nd fix joiners on a dayworks basis, rates agreed with our Raj [Jandu] on site, from 10.2.06 to assist in completing units ready for the decorations until further notice including full shift weekend working. Please report to our Mr A McDonald on site"

  1. Bestwood duly provided six joiners from 10 February 2006, which was a Friday; they continued to work at least over the next two weekends as well as during the weeks. On 19 February 2006, Rok sent to Bestwood what was clearly a pro forma document entitled "Instruction to Sub-Contractor” which gave a reference number 8135/FP238. It was entitled "Week end working" and went on:

“Please proceed in accordance with the following instructions:-

Please accept this as written confirmation that we will require your company for week end working at Oriental city and that you have worked

Saturday the 11th of February 06

Sunday the 12th of February 06

Saturday the 18th of February 06

Sunday the 11th of February 06

Any further non-productive over time is to be agreed with Rok management and either or our Mr Andrew McDonald or Mr Tony Ingram.

Confirmation will be given via a written Site Instruction”

As part of the pro forma document in a box below, the following appeared:

“ALL TERMS AND CONDITIONS AS OUR MAIN ORDER REFERRED TO ABOVE APPLY TO THIS INSTRUCTION”

  1. A number of other instructions on the same form were issued by Rok to Bestwood including one also on 19 February 2006 asking Bestwood to supply "all fixings and materials as and when your work dictates the need". It is clear that by about the end of March, Rok required Bestwood to provide over 15 carpenters to the site and had issued over 20 different instructions requiring specific works to be carried out.

  2. By the end of March 2006, Rok had decided finally to dispense with the services of Soundcraft and invited Bestwood to provide rates and prices on a measured work basis for those parts of the work which Soundcraft had not effectively commenced. Bestwood did provide rates and prices under cover of their faxes dated 23 and 29 March 2006 and, following a meeting held on 12 April 2006, a preliminary cost breakdown on 18 April 2006. These prices were to relate to Blocks A, B, C, D, E, F and H. On 24 March 2006, Rok had sent to Bestwood a further pro forma instruction which was entitled "Letter of intent for carpentry works" which said:

“Please carry out all carpentry and associated works on price as agreed with our Quantity Surveyors. This is for blocks A-b-C-D-E-F and completion of block F [sic-probably means H].

This order includes all works associated with the construction and erection of timber fencing Requirements.

All erection and fixing of Larch pre made or site constructed panels to all blocks not just the blocks listed above.

This order is to run concurrent with the previous issued site instruction and to be serviced by separate and additional labour.”

  1. There is no issue that Bestwood carried out, in broad terms, this further work. There is and remains an issue between the parties as to the contractual or legal basis upon which this further measured or measurable work was carried out. Applications for payment were submitted and payments made but issues began to emerge in about the June 2006. By letter dated 28 September 2006, Rok wrote to Bestwood as follows:

“Re: 8135-Oriental City

We write to you with regards to the Specialist works that your company has carried out to the above project.

In accordance with the terms and conditions of the SPC 2000 and Rokbuild Limited Schedule of Amendments to SPC 2000 sub-contract conditions, we would like to notify you under clause 20.5 of the SPC 2000 that the sum of £239,688.25 will be withheld from your account on the following grounds/s:

These monies will be withheld from your next valuation."

There is an issue between the parties as to whether and, if so, when and how the “SPC 2000 and Rokbuild Limited Schedule of Amendments to SPC 2000 sub-contract conditions” came to be incorporated in any material contract between the parties, to which I will return later in this judgement.

  1. For more than three years thereafter, the parties discussed and sought to negotiate on Bestwood’s final account or accounts. At various stages, Bestwood sought to assert that there was one contract between it and Rok, two contracts or indeed no contact at all. For instance, in a submission prepared by consultants in August 2008, Bestwood argued that as there was no contract it was entitled to a quantum meruit. Certain it is that the parties never signed any contract in relation to all or any of these works.

The Adjudication

  1. By March 2010, a dispute or disputes had arisen between the parties relating to the value of the dayworks and measured works carried out by Bestwood on the project. Thus it was that on 23 March 2010 by Recorded Delivery, Bestwood sent to Rok a Notice of Intention to Refer a dispute or difference to adjudication. The covering letter indicated that it was being served pursuant to “SPC 2000 Sub-Contract Conditions as amended”. The Notice itself expressly in the unnumbered introduction makes it clear that disputes were only being referred under what was called “Sub-Contract No 1” which was said to be an agreement:

“contained in or evidenced in writing by the following documents, or alternatively the agreement was agreed by conduct by reference to written terms:

(i) The instruction issued under cover of ROK’s facsimile dated 9th February 2006.

(ii) ROK’s Instruction to Sub-Contractor No. 8135/FP 238 dated 19th February 2006.

(iii) Specimen Subcontract Order (pages 1 to 8).

(iv) ROK Building Ltd Schedule of Amendments to SPC 2000 Sub-Contract Conditions.

(v) SPC 2000-Specialist Payment Terms.”

Only disputes under Sub-Contract No. 1 work were to be referred, and the Notice makes clear that there was a Sub-Contract No. 2 which related to be measured works which were the subject matter of discussion and instruction in March and April 2006.

  1. On 27 March 2010, Bestwood applied to the RICS for the appointment of an adjudicator and Mr Tony Bingham was appointed. He gave directions in his Notice No. 1 on the 31 March 2010. Objection was made on several grounds by Rok’s consultants to Mr Bingham's jurisdiction. The substantive objection which continues to be maintained was that there was no agreement in writing within the meaning of Section 107 of the HGCRA. The other objection was that the Referral, served on 31 March 2010 was served out of time; that however is not in issue because it is accepted that, if the ROK documents set out at (iii) to (v) in Paragraph 10 above were incorporated into any relevant contract between the parties, the Referral was served in time and that, if the documents were not incorporated, the Referral was not served within time.

  2. The parties sensibly agreed (the adjudicator going along with them) that the Court should be asked to rule on the jurisdictional issues before the adjudication proceeded to any conclusion.

These Proceedings

  1. Rok as Claimant issued proceedings on 13 April 2010 and essentially seeking declarations that the adjudicator did not have jurisdiction to proceed. Somewhat obliquely, Rok asserts, primarily through its Reply, that there was only one contract between the parties created in the first half of February 2006 which was broad enough in effect to cover all of the works which were ultimately instructed by it to be done. Rok argues however that whatever the scope of the contract created at that stage it was not sufficiently evidenced in writing for the purposes of the HGCRA.

  2. Bestwood argues through its Defence that its primary case is that there were two contracts which it calls the “Dayworks” and the “Measured Works” contracts. It asserts that the Dayworks Contract was created following a meeting in the week commencing 6 February 2006 and evidenced by the fax of 9 February 2006 and the Instruction of 19 February 2006. There is a positive assertion that the Measured Work Contract was created by discussions and at meetings in March and April 2006. Bestwood argues that, following requests to Rok for the "Main Order" referred to in the proforma instructions issued to it, Mr Ingram of Rok handed to Mr Soora of Bestwood a Specimen sub-contract order, a copy of Rok’s SPC 2000 Schedule of Amendments and Specialist Payment Terms. It is then said that in these premises both Contracts contained these three documents. Its secondary case is that there was one single contract containing an amalgam of all the documents which went to make up the Dayworks and Measured Works Contracts. It argues that whether there were one or two contracts both were sufficiently in writing for the purposes of the HGCRA.

  3. As document disclosure had been agreed and been ordered to be very limited, in particular relating only to the alleged incorporation or agreement of the Rok "Main Order" documents, I decided at the beginning of the hearing that the hearing and indeed this judgement should be limited to a consideration of whether or not the (or any) contractual arrangement reached in February 2006 between the parties was a contract in writing for the purposes of the HGCRA. To determine that issue, the Court made it clear that it would probably be necessary to determine whether or not the scope of any such contract was such that it gave Rok the contractual right to issue variations and imposed on Bestwood the obligation to carry out such variations.

  4. I heard from two witnesses at the hearing, Mr Hope of Rok and Mr Bansal of Bestwood. I found both to be honest, although much of what each said was based on what he had been told by others. As appears below, some of what Mr Bansal said about the receipt of the "Main Order" documents was in my view mistaken. By agreement, I also received in evidence the witness statements of Mr Soora, Mr Jandu, Mr Craven and Mr Ingram albeit each party reserved its right to argue that more or less weight should be given to what each had to say in those statements.

The Evidence and the Factual Findings

  1. The first area of issue relates to what was said and agreed between the parties in the period leading up to and including the sending of the fax of 9 February 2006 and the instruction of 19 February 2006. There is no doubt that there was a meeting at site between the parties’ representatives in the week commencing 6 February 2006. I attach little importance or weight to what Mr Hope had to say about this because he did not attend the meeting and much of what he says is comment, albeit not necessarily unhelpful. Mr Ingram’s statement adds nothing about this meeting, albeit that he attended it.

  2. It is in the three statements of Messrs Craven, Jandu and Mr Soora, all of which were submitted by Bestwood in these proceedings, that one finds the evidence about what was said and agreed. Without these witnesses being cross-examined and without any challenge to their honesty, I can and do broadly accept what each says. It is likely that the meeting was in two parts with all five attendees present initially but with Messrs Jandu and Soora being left to agree the rates for the joiners. I can and do conclude on the basis therefore of these witness statements that the following was agreed orally:

(a) it was agreed that Bestwood would initially supply 6 joiners on a day work basis but that, if the need arose, additional carpenters would be requested by Rok giving Bestwood 48 hours notice, and that Bestwood would provide such additional carpenters following such notice.

(b) The six carpenters would be supplied to commence work on 10 February 2006.

(c) Rok would provide the Bestwood carpenters with snagging sheets as and when required; these sheets would clearly detail all works required to be carried out in each plot and the carpenters would be required to carry out such detailed works accordingly.

(d) The supervision and management of Bestwood operatives would be the sole responsibility of Rok.

(e) Day work rates were agreed with a rate of £20.50 per hour chargeable for the standard normal working day (Monday to Friday). It was at the very least agreed that this rate excluded out of normal hours working as well as week end working and that for Saturday morning working the rate should be enhanced as time and a half whilst working thereafter on the weekend on a double time basis.

(f) It was agreed that Bestwood would work on Saturdays and Sundays, as required.

  1. I decline at this stage to decide whether specific and express oral agreement was reached between the parties as to the precise money adjustments which were to be made to the day work rate for weekend working. This is because there is a lacuna between the evidence of Mr Soora and Mr Jandu about this with Mr Soora saying that specific rates of £30.75 and £41.00 per hour were agreed for the time and a half and double time increments whilst Mr Jandu talks in terms of having agreed time and a half and double time increments but appears then to put an interpretation on this as "equating" to these specific rates. Although nothing may ultimately turn on this, I am not in a position to decide the issue.

  2. I am not satisfied on the balance of probabilities that there was any agreement oral or otherwise that Bestwood would only be required to work on particular Blocks. Both Mr Soora and Mr Jandu say in their witness statements in nearly identical terms that the "scope of works entailed undertaking [various] listed activities to Blocks G, J, K, L &M”. Neither says that there was any agreement between them that Bestwood’s work would be limited either to those listed activities or to those Blocks in particular. It is most likely however that something short of an agreement on this was discussed along the lines of an indication being given that their works would be at this stage in those areas where Soundcraft had already worked. Mr Soora said, and I accept (it being unchallenged) that Rok asked Bestwood at this meeting about the possibility of the latter providing measured rates for Blocks A to H and for the completion of Block I. He said, and I accept, that should an agreement be reached on these further works, Bestwood would be required to resource "both contracts concurrently and adequately". That evidence and finding leads me to conclude that both parties were envisaging and effectively agreeing that the provision of joiners on a day work basis (which was the subject matter of the initial agreement) was to be a contract in its own right and that any possible future contract on a measured basis would be a separate contract.

  3. I am satisfied that there was no discussion and no agreement as to any right on the part of Rok to require the execution of any variations by Bestwood. The only agreement in this context was that Rok had to write upon 48 hours notice to require an increase in the number of joiners to be provided by Bestwood.

  4. It is clear, and I find, that the parties reached agreement at this meeting and that this agreement was in general confirmed by Mr Craven’s faxed message of 9 February 2006. The Instruction referenced 8135/FP 238, dated 19 February 2006, in fact adds and records nothing additional to what had been agreed orally or what had been confirmed in writing on 9 February 2006.

  5. I now turn to the other major issue of fact, namely whether there was any agreement in relation to the handing over of formal contract documents in mid-July 2006 by Rok to Bestwood at least in the context of them being mutually intended to apply to the contractual relationship created in February 2006 between the parties. I am wholly satisfied on the evidence that this did not happen. I base this view on the following:

(a) Bestwood’s pleading supported by a Statement of Truth from Mr Bansul is to the effect that a Specimen Subcontract Order, Rok’s Schedule of Amendments to SPC 2000 Sub-Contract Conditions and SPC Specialist Payment terms were handed over by Mr Ingram of Rok to Mr Soora on or around 14 July 2006 following requests made by the latter a copy of the "Main Order" referred to at the foot of Rok’s various instructions.

(b) However, Mr Soora’s witness statement simply does not address this at all. Mr Ingram says in his witness statement in effect that no such documents were handed over. Thus, this assertion has simply not been proved by Bestwood, upon whom the onus of proof rests, given that it has made the positive assertion.

(c) The only evidence about this is Mr Bansal who in his witness statement says that Mr Soora had chased Rok for a copy of the Order and, he recalled that sometime in July 2006 Mr Soora brought into Bestwood’s office the three documents (see (a) above, also referred to in the Defence) and told him that Mr Ingram had given them to him. Mr Soora is said to have said that the documents since "whilst not completed, covered and the terms and conditions to both the day work labour and the work on a measured basis."

(d) However, Mr Bansal in his oral evidence presented a materially different picture in that he said that the order was not a "Specimen" Order but an order which had been filled in with the names of the parties and with other details. He said that he signed the order and that he would have expected a copy to have been retained in Bestwood’s files. The only documents disclosed by Bestwood were the Specimen and uncompleted documents. No signed order has been disclosed. Thus it is that Mr Bansul’s oral evidence is inconsistent with the pleaded case. To be fair to him, he was trying to do the best he could whilst giving oral evidence but from what he said and the way he said it I am satisfied that his recollection both in his evidence in writing and on the witness stand was unreliable.

(e) I have formed the very clear view that at some stage, possibly in connection with other projects altogether, Bestwood secured the Specimen and other documents upon which it now relies and has simply got it wrong as to whether these documents were handed over in connection with the Oriental City project. I would have expected Mr Soora specifically to address this in his witness statement; there seems no doubt that he is cooperative towards Bestwood as he provided them with a statement on other matters, albeit that he works for someone else now. Mr Bansal made it clear that he was a very busy man dealing with dozens of different projects and undertakings and I am satisfied that he has simply confused himself as to what was said and done about these documents.

The Law

  1. The law as to what the writing requirements are for construction contracts for the purposes of the HGCRA has been largely set down by the Court of Appeal in RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270. It is unnecessary to set out the well-known and much repeated Paragraphs 11 to 16 and 19 in the judgement of Lord Justice Ward and Paragraph 20 in that of Lord Justice Robert Walker (as he then was). In essence, what they said was that all of the terms of the agreement must be in or evidenced in writing. As Lord Justice Ward said in that Paragraph 19:

“On the point of construction of section 107 [of the HGCRA], what has to be evidenced in writing is, literally, the agreement, which means all of it, not part of it.”

  1. Unsurprisingly, this approach was adopted by judges at first instance. For example, Mr Justice Jackson (as he then was) in the Trustees of the Stratfield Saye Estate v AHL Construction Ltd [2004] EWHC (TCC) 3286 said at Paragraph 47:

“The principle of law which I derive from the majority judgements in RJT is this: an agreement is only evidenced in writing for the purpose of s. 107, subsections (2), (3) and (4), if all the express terms of that agreement are recorded in writing. It is not sufficient to show that all terms material to the issues under adjudication have been recorded in writing.”

  1. Thus, the law, as it stands on this topic, is that all the terms of a construction contract must be in or evidenced in writing. This is not a case in which it has been argued that Section 107 (5) applies, namely whereby an un-challenged exchange of written submissions about the existence of an agreement otherwise than in writing in various types of proceedings can constitute an agreement in writing.

  2. The final legal issue arises out of a decision of His Honour Judge Raynor QC dated 30 July 2004 in Murray Building Services v Spree Developments. The case involved an issue as to what if any was the agreement about price or pricing arrangements between parties to a sub-contract. Spree was the main contractor and the employer’s consulting engineers were JR Book. Initially Murray was asked to and did provide quotations for mechanical and electrical work to JR Book. Spree was instructed by its client to place an order with Murray but was reluctant to do so because it had not seen the prices quoted or the specification upon which quotations were based. However under some pressure Spree placed an order with Murray which identified the contract some as "electrical-less 2½% main contractor's discount; mechanical- less 2½% main contractor's discount”; there was an accompanying letter which talked about Murray forwarding its costs “once finalised and agreed with JR Book” Although no price was expressly identified, it was argued that the order could be construed as amounting to a stipulation that the contract price would be the prices agreed between Murray and JR Book. HHJ Raynor QC, having reminded himself of the law as adumbrated in the RJT case, then said at Paragraph 11:

“It is thus necessary (and, indeed, is conceded by Mr Jess) that in order to enforce this agreement by adjudication, the price, which is a vital time, must be recorded in writing within the meaning of the Act. That does not mean that the actual price must be stated. It would be sufficient if (as he contends) by a process of construction I was satisfied that the provision in the latter of which says “forward your costs once finalised and agreed" means that the contract price will be that which is agreed with Book subject to the 2½% main contractor's discount. If that argument is right, then there will be a construction contract in writing within the meaning of the Act. What I have thus to determine is whether that argument is correct. I pause before considering that to note that it is agreed by both parties (in my view rightly) that if the matter is not one of construction, but falls to be determined by way of implication of that time, then that would not suffice to render the agreement and agreement in writing within the meaning of the Act.”

The learned judge then went on to construe the words in the order.

  1. I agree with HHJ Raynor QC that it is not necessary, for there to be a construction contract in writing, that the actual price is expressly recorded in writing. If however the price was orally agreed but is nowhere in or evidenced in writing, then an agreed term is not in writing and the contract is not a construction contract in writing for the purposes of the HGCRA. The Murray case was not a case in which there ever had been an oral agreement between Murray and Spree about price. It is of course always open to parties both in ordinary contractual terms and for the purposes of a construction contract in writing under the HGCRA to have an agreement in which the contract price is not expressly stated or agreed. It is open to the parties to agree a verbal or mathematical formula by which the price can be determined. It may well be possible simply by way of construction in the light of the background factual matrix to determine what the price is; such an exercise would not prevent the construction contract being a construction contract in writing under the HGCRA. One needs however to distinguish between the construction or interpretation exercise which establishes what the agreed price is and a written confirmation that something has been orally agreed; the former can be a construction contract in writing under the Act whilst the latter can not.

  2. I disagree with HHJ Raynor QC if what he said in the last sentence of his Paragraph 11 was that, where no prices have been agreed orally or otherwise between the parties in what is otherwise a construction contract in writing and a court or arbitrator would otherwise imply a term requiring payment of a reasonable price or reasonable remuneration, there can be no construction contract in writing within the meaning of the HGCRA. I am by no means convinced that that is what he meant or said. His remark was apparently obiter in any event and was based on a concession made by both parties and without any apparent argument by either side. The whole point about implied terms is that they are (almost invariably) implied as a matter of law in the absence of any material express agreement. They are terms which necessarily are not and do not have to be expressed as they arise by operation of law. A very large number of construction (and other) contracts have implied terms and it would be an extraordinary state of affairs if contracts which would otherwise be construction contracts in writing were taken outside the operation of the HGCRA because there were one or more implied terms. It will follow that a construction contract in writing in which there is no agreement about the price, oral, in writing or otherwise, will still be a construction contract within the HGCRA even if the price or the rates fall to be determined by reference to an implied term as to reasonable rates or prices. This view is supported by the decisions of this Court in Connex South Eastern Ltd v MJ Building Services Group PLC [2004] BLR 333 and Allen Wilson Joinery Ltd v Privetgrange Construction Ltd [2008] EWHC 2802 (TCC).

Discussion

  1. The first issue is whether or not any contract created in the February 2006 between the parties was in writing for the purposes of the HGCRA. In most cases, a relatively simple exercise is required whereby the Court compares what it has found was orally agreed with what is contained or evidenced in writing. That exercise in this case demonstrates that, whilst, as the parties rightly accept, there was undoubtedly a contract between them, there were terms which were orally agreed which were not contained in or evidenced by writing:

(a) The faxed message of 9 February 2006 simply requires and confirms agreement whereby Bestwood would supply six joiners on a dayworks basis at agreed rates from 10 February 2006 to assist in completing units raided the decorations until further notice including full shift weekend working.

(b) Nothing was confirmed in writing in relation to the agreement reached at the meeting earlier that week in relation to (i) the provision of additional joiners upon 48 hours notice, (ii) the agreed provision to the joiners of snagging lists, or (iii) the fact that supervision and management of the joiners was to be provided, not by Bestwood but,

by Rok.

(c) Although it matters not as to whether these terms were material, they were material because they imposed a potentially heavy obligation on Bestwood, at least within reason, to provide what could turn out to be a substantial further quantity of joiners on relatively short notice, the provision of snagging lists would provide a detailed record of the work which the joiners were required to work on and question of supervision and asked to some extent at least responsibility for any deficiencies in the work done by the joiners could be, at least in part, attributable to Rok as opposed to Bestwood.

(d) The “agreed rates” were only agreed orally. The faxed message confirms the fact that there were agreed rates but does not evidence in writing what the agreement about rates was. For the reasons given earlier in this judgement, because the agreement about what the rates were was not in, or evidenced in, writing, the contract was not a construction contract in writing under the HGCRA.

  1. I am of the view, however, that the contract which was negotiated was a relatively simple and limited contract in that it related only to the provision of joiners on a day works basis. It did not contain beyond that, expressly or by implication, any enforceable contractual right on the part of Rok to issue variations or to require Bestwood to carry out such variations. It will follow from this that, unless there was later specific and binding agreement between the parties that such variations were to be dealt with as part of the contract evidenced by the faxed message of 9 February 2006, such variations would have been executed and effected pursuant to some different contractual, equitable or other legal regime.

  2. As to the second issue, namely whether the Rok Specimen Order and other standard sub-contract terms were in some way or at some time incorporated into the dayworks contract, I am satisfied on factual grounds that they were not, for the reasons set out earlier in this judgement. There is no reliable evidence that it was ever agreed that these documents were incorporated into the contract. The facts that there is simply no written record of these documents ever having been received by Bestwood, at least in the context of them being incorporated into the contract and that Mr Ingram’s evidence strongly suggests in effect that they were not, strongly support the view that they were not incorporated. The reference in the Instruction dated 19 February 2006 to the terms and conditions being "as our Main Order” does not assist in this regard. This reference was on a pro-forma document and, in context, it could only conceivably relate to the faxed message of 9 February 2006 as being the only order which had been issued beforehand. I doubt very much however that it was or was mutually intended as such even to refer to the earlier message which was clearly not a formal order but more a confirmation of an oral agreement reached beforehand. They were just standard words in a box on a pro-forma document which in context had no real meaning.

  3. Consequently, I am satisfied that there was, in relation to the contract which was at least evidenced by the faxed message of 9 February 2006, no contract in writing for the purposes of the HGCRA and that, therefore, the adjudicator, who was appointed to adjudicate only upon the disputed claims arising in connection with this contract, has no jurisdiction. The question as to whether the Referral was served late therefore does not arise but, even if the dayworks contract had been in writing for the purposes of the HGCRA, the Scheme would have applied and the Referral would have been late so that the adjudicator would have had no jurisdiction in effect by lapse of time.

Decision

  1. The Claimant’s Claim succeeds and there will be a declaration and that the adjudicator, Mr Bingham, does not have jurisdiction to proceed as adjudicator pursuant to Bestwood’s notice dated 23 March 2010.

  2. If the parties cannot agree on further directions so far as the resolution of the issues which arise on the Defence which have not been dealt with in this judgement in particular in relation to what Bestwood has pleaded as "the Measured Work Contract" on costs or other matters, they should put their submissions in writing and I will make appropriate orders.

Supplementary Matters

  1. The parties’ Counsel have made written submissions in relation to further directions. Rok seeks to argue that Bestwood has no real prospect of success on its potential Counterclaim for declarations relating to what is said to be the second contract relating to the measured work. I disagree or, rather, I am not in a position to determine that. I have made it clear both orally and in this judgement that I would as not be dealing with the issue as to whether there was a second contract and whether it was sufficiently in writing for the purposes of the HGCRA. I have decided in effect that Rok’s Speciment Order and other standard form Sub-contract terms were simply not handed over at least in relation to this project and it would therefore follow that, assuming that there is a second contract, it did not contain or incorporate those documents. I have simply not decided whether there was a second contract and if so whether it was in or evidenced by writing.

  2. Bestwood in effect applies for a stay of proceedings to enable it to decide whether and if so upon what basis it wishes to proceed. It wants a stay of one month. Rok’s position appears to be somewhat equivocal and its Counsel talks of no stay (but with Bestwood having to file any amendments to its pleadings by 17 or 25 June 2010) or a stay until 1 September 2010. In my view, it is not appropriate to talk in terms of a stay. As part of the Overriding Objective, the Court should take steps to ensure that time is not wasted. It seems to me that Bestwood should be in a position to decide whether and if so upon what basis it wishes to proceed in relation to the outstanding issues relating to the second contract no later than 28 June 2010; any draft amendment should be filed and served no later than 4 PM on that day. Unless any objection is made to the amendments, Rok should serve any amended Reply and Defence to Counterclaim no later than 12 July 2010. I would expect the parties to agree further directions about further disclosure and witness statements if required with a view to a half day hearing to be fixed no later than the first week of August 2010.

  3. Issues arise in relation to costs. Rok, it is accepted, rightly, is entitled to the costs of and occasioned by its success on the issue relating to the contract which I have found was not sufficiently contained in or evidenced by writing. However, it is clear that its Statement of Costs relates to the whole of the Claim and its costs to date will necessarily include some costs relating to the issues which have not yet been resolved. The total cost bill is £32,630.89. Given the outstanding issues, I am not minded to make a final costs order or summary assessment. However, this is an appropriate case for an interim order for costs on the basis that much of the costs incurred to date, including the cost of and occasioned by the hearing last week, would have been incurred in dealing with important issues on which Rok has succeeded. In fixing an interim payment of £15,000, I have formed the view that the overall figure of over £32,000 appears somewhat disproportionate given the nature of the issues which have been dealt with to date. That sum should be payable within 14 days.

So far as the form of declaration to be granted, I am satisfied that there should be a declaration to the effect that Mr Bingham the adjudicator does not have jurisdiction to proceed as Adjudicator pursuant to Bestwood’s notice dated 23 March 2010. Counsel for Bestwood argues that I should issue a declaration to the effect that there was a second contract; as I have not dealt with the issue as to whether there was a second contract, it would be wholly inappropriate to issue such a declaration.