Case No: HT-09-101

NEUTRAL CITATION NUMBER: [2009] EWHC 1314 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

Royal Courts of Justice

Strand

London WC2A 2LL

Monday 6 April 2009

BEFORE:

MR JUSTICE TEARLE

BETWEEN

RUPERT CORDLE

Claimant

And

VANESSA NICHOLSON

Defendant

Mr P Harris (instructed by Wright Hassal) appeared on behalf of the Claimant

MR S BRANNIGAN QC (instructed by Fenwick Elliott) appeared on behalf of the Defendant

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1. MR JUSTICE TEARE: This is an application for the enforcement of an adjudicator's decision, dated 12 January 2009. The application is made by the claimant, Rupert Cordle, Town and Country Limited, and the respondent to the application is Vanessa Nicholson. The value of the adjudicator's decision which is sought to be enforced is £138,450, together with continuing interest and costs.

2. The issue before the Court today on this application is whether there is a triable issue in relation to the defendant's case that the parties did not agree a contract which incorporated the terms and conditions set out in section A of a document known as the Encompass Projects Specification. This is the "jurisdiction" issue.

3. The defendant has raised a further reason as to why the adjudication should not be enforced; namely, that the adjudicator, it is said, failed to deal with a substantial counterclaim of the defendant in a sum in excess of £100.000.

4. Dealing firstly with jurisdiction, this was not a case where the adjudicator had statutory jurisdiction. Jurisdiction (if it existed) stemmed from a contract between the parties. The claimant says that there was a contract between the parties which provided for adjudication, on the terms that the adjudicator be nominated by the RICS. The defendant to the application says that there is an issue to be tried as to whether such contract as there was between the parties included a provision for adjudication which provided for the adjudicator to be nominated by the RICS. (It was of course, the RICS who nominated the adjudicator.)

5. The claimant's case, that there was a contract which provided for adjudication and for the adjudicator to be nominated by the RICS, has been pleaded in the particulars of claim appended to the claim form. That case has also been advanced in a skeleton argument by Mr Harris of Wright Hassal LLP. The manner in which that case is sought to be made out is, perhaps, not entirely clear from either the particulars of claim, or from the skeleton argument but, in oral submissions, particular reliance was placed upon the approach of the Court of Appeal in the case of G Percy Trentham Limited v Archital Luxfer Limited and others [I9931 1 Lloyds Reports 25. Reliance is placed on the closing paragraphs of the judgment of Steyn LJ, at page 6 of the copy of the report (with which I have been provided) which states as follows:

"22. In a case where the transaction was fully performed the argument that there was no evidence upon which the judge could find that a contract was proved is implausible. A contract can be concluded by conduct. Thus in Broaden v Metropolitan Railway , sup, decided in 1887, the House of Lords concluded in a case where the parties had acted in accordance with an unsigned draft agreement for the delivery of consignments of coal that there was a contract on the basis of the draft. That inference was drawn from the performance in accordance with the terms of the draft agreement. In 1992 we ought not to yield to Victorian times in realism about the practical application of rules of contract formation. The argument that there was insufficient evidence to support a finding that a contract was concluded is wrong. But, in deference to counsel's submissions, I would go further.

23. One must not lose sight of the commercial character of the transaction. It involved the carrying out of work on one side in return for payment by the other side, the performance by both sides being subject to agreed qualifying stipulations. In the negotiations, and during the performance of phase 1 of the work, all obstacles to the formation of a contract were removed. It is not a case where there was a continuing stipulation that a contract would only come into existence if a written agreement was concluded. Plainly the parties intended to enter into binding contractual relations. The only question is whether they succeeded in doing so. The contemporary exchanges, and the carrying out of what was agreed in those exchanges, support the view that there was a course of dealing which on Trentham’s side created a right to performance of the work by Archital, and on Archital’s side it created a right to be paid on an agreed basis. What the parties did in respect of phase 1 is only explicable on the basis of what they had agreed in respect of phase 1. The judge analysed the matter in terms of offer and acceptance. I agree with his conclusion. But I am, in any event, satisfied that in this fully executed transaction a contract came into existence during performance even if it cannot be precisely analysed in terms of offer and acceptance, and it does not matter that a contract came into existence after part of the work had been carried out and paid for. The conclusion must be that when the contract came into existence it impliedly governed pre-contractual performance. I would therefore hold that a binding contract was concluded in respect of phase 1 ."

6. It may be for that reason (and possibly others) that neither the particulars of claim, nor the skeleton argument, nor indeed Mr Harris's oral submissions, seek to explain the information of the contract in terms of offer and acceptance. It is nevertheless said that the claimant has a strong case, and it might well be that the claimant does have a strong case. Three particular matters may be referred to in this context.

7. The first is set out in paragraph 10 of the particulars of claim, namely, that on 26 September 2006 Lionel Catelan (acting for and in behalf of Vanessa Nicholson) sent to Rupert Cordle the contract specification and schedule of works and contract drawings. The said contract specification, being the specification previously provided to Robin Ellis, provided at part A(5) that the form of contract would be the JCT agreement for minor building works, 1998 edition, incorporating amendments 1 to 5, as aforesaid. It further provided that the reference to "architect" would be deleted and that there would be no quantity surveyor. It should be added in that context that the specification at page 6 (after referring to the JCT agreement for minor building works, 1998 edition) set out reference to various articles of that agreement, in particular article 6, and provided that the nominator of the adjudicator should be the president or a vice-president, or the chairman or a vice-chairman, of the Chartered Institute of Building or the Royal Institution of Chartered Surveyors.

8. Secondly, as referred to in paragraphs 14 and 16 of the points of claim, agreement was reached on price and on the start date in December 2007.

9. Thirdly, reference is made to the apparent acceptance by the client's agent, Mr Catelan, that the contract between the parties was on the terms of the JCT minor works contract. In particular, on 26 February 2007, he confirmed that he would fill in the details of the JCT contract, and:

"I will be the contract administrator as I am a third party. Furthermore, after consulting with the JCT contract, there is no reason why I cannot act as contract administrator."

10. Also, on 13 June 2007, he stated in an email:

"The JCT contract for minor works governs our relationship, fax and emails fill in the blanks."

11. Although the claimant has not as yet said that the specification provided in September2006 was an offer by the defendant, which offer was accepted in December 2007 when the price and start date were agreed, it is unclear why that is not so. But it may be because the claimant, it seems, never came back in terms and said that the matters set out in the specification were accepted by the claimant.

12. Indeed I have been referred to evidence from the respondent that in February 2007 the claimant produced as a basis of contract, not the JCT 1998 form referred to in the specification, but the 2005 JCT form. There is also evidence, to which I have been referred, that later in 2007 the claimant asserted that there was no contract between the parties.

13. The answer to these apparent difficulties may well be that, by agreeing the prices and start date in December 2006, the offer contained in the presentation of the specification in September2006 was accepted, and that it matters not that thereafter (in February 2007) a different form of JCT contract was put forward or that in the course of jockeying for negotiating position, the claimant asserted later that year that there was no contract.

14. However, as I have said, that is not how the case is presently put. Indeed (for the reasons I have referred to) an analysis based on offer and acceptance has deliberately been avoided. Instead, as I have indicated, reliance is placed on the approach of Steyn LJ which I have quoted. I respectfully agree with what Steyn LJ said, namely that a contract can be implied from a course of dealing between the parties, notwithstanding the difficulty of analysing the case precisely in terms of offer and acceptance.

15. However, inferring a contract on particular terms from a course of dealing requires a detailed analysis of that course of dealing, both in terms of the written and any oral exchanges. It is difficult to carry out that analysis on a summary procedure such as the present. I note by contrast that the issue determined in Trentham v Archital Luxfer was the determination of a preliminary issue; so that the judge at first instance made findings, on the basis of a trial, with such written and oral evidence as the parties wished to place before him.

16. Moreover, where a party, who has said in 2007 that there was no contract, now says that there plainly was a contract on the terms of the specification, careful analysis of the dealings between the parties is clearly required. That is especially so where the claimant does not say that that specification was accepted as the basis of the contract on any particular date.

17. In addition, there are parts of the evidence which the respondent wishes to give which are not accepted by the claimant. There may be good reason why the claimant does not accept that evidence, but the Court cannot determine such matters on an application such as the present. Finally, I note that the adjudicator (although he thought it appropriate to proceed with the adjudication) said in paragraphs 24 and 26 of his decision that the matter was not "clear cut".

18. For all these reasons, whilst there is much to be said for the claimant's argument that there was a contract between the parties (the works were, after all, executed), and that such contract, so far as dispute resolution was concerned, provided for an adjudicator to be appointed by the RICS as stated in the specification, I consider that there is an issue to be tried as to, at any rate, that latter point.

19. For these reasons, I must refuse the order for summary enforcement of the adjudicator's decision. There must be a trial of the issue as to the jurisdiction of the adjudicator.

20. As I mentioned, there is a further issue which has been raised, namely that the adjudicator did not deal with a counterclaim brought by the defendant. The counterclaim was set out in the defendant's response to referral at paragraphs 64-66, and reference was also made to a witness statement referring to remedial works which were estimated to have cost in excess of £100,000. It appears to be common ground that the adjudicator did not deal with this counterclaim in terms. It is to be noted in that regard that the adjudicator, when setting out the issues to be resolved (at paragraph 15 of his decision), did not include the counterclaim within them.

21. The claimant says that the adjudicator found that there had been "practical completion" and that, therefore, there was no substance in the complaints made by the defendant as to the quality of work done, and so forth. That may well be so (at least to some extent) but I am not persuaded that practical completion was by itself a complete answer to the counterclaim. That proposition was said by leading counsel for the defendant to be "a novel proposition", although Mr Harris claimed there was authority to support his proposition. At any rate the adjudicator did not say, in terms, that practical completion was an answer to the counterclaim.

22. That is therefore, in my judgement, a further reason for not enforcing the adjudication at this stage. The adjudicator has not dealt with the counterclaim, and it seems to me that he should do so before any question of enforcement arises.