Case No: HT-11-45

Neutral Citation Number: [2011] EWHC 780 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

 

Royal Courts of Justice

Strand, London, WC2A 2LL

 

Date: 31 st March 2011

 

Before :

 

MR JUSTICE AKENHEAD

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

Between :

 

 

DURHAM COUNTY COUNCIL

Claimant

 

- and -

 

 

JEREMY KENDALL (Trading as HLB Architects)

Defendant

 

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

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

 

Steven Walker (instructed by Dickinson Dees LLP ) for the Claimant

Duncan McCall QC (instructed by Beachcrofts LLP ) for the Defendant

 

Hearing date: 11 March 2011

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

 

JUDGMENT

Mr Justice Akenhead:

  1. In this Claim, Durham County Council (“Durham”) seeks to enforce the decision of an adjudicator, Mr Keith Pickavance (“the Adjudicator") dated 18 November 2010. The case raises issues as to the extent that the underlying contract or contracts were in writing or evidenced in writing as required by Section 107 of the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”), whether if disputes arise under more than one contract they are referable to a single adjudicator and issues as to waiver in relation to jurisdictional points taken only in court and not before the adjudicator.

The History and Factual Background

  1. In about April 2003, Durham (then Sedgefield Borough Council which I will refer to as “Durham”) invited tenders for the provision of services in connection with the design and construction of an extension to Spennymoor Leisure Centre ("the Project"). These were described in a document entitled "Lead Consultant’s Brief" dated March 2003. HLB, a firm of architects of which the sole proprietor was Mr Jeremy Kendall, was one of the firms invited to tender. The Brief described the work which was mainly an extension to the Centre comprising a new gym with associated facilities. Paragraph 1.3 made it clear that the scheme would be project managed by the Lead Consultant and the project would be funded by Durham together with funding from Sport England and other sources. Paragraph 2.3 stated:

“Sufficient site investigations to determine ground conditions and location and adequacy of existing services will need to be carried out by the appointed Consultant once the outline details of the scheme are confirmed…”

Paragraph 3.1 stated:

"The appointed Lead Consultant will be required to bring together ideas, observations, perceptions and ultimately establish a common understanding of the building which will provide all the requirements and facilities for all the partners involved in the project…”

  1. Paragraph 4 identified that the scheme was divided into four parts:

“Part 1-Pre Feasibility Concept Development Ideas (already completed)

Part 2-Confirm Part 1 and Feasibility Study with Cost Plan and Detailed Presentation

Part 3-Detailed Design, Bills of quantities and all Works prior to Tendering

Part 4-Construction Works, Contract Administration and all Work up to and including final account”

Paragraph 6 sets out what was involved in Part 2, which unsurprisingly dealt "with the feasibility of the scheme to establish the most appropriate form of construction, design and layout, infrastructure…external and internal appearance, landscaping and security”. A detailed cost plan was needed together with a preliminary timetable. A detailed presentation with drawings, brochures, technical information and the cost plan was to be provided.

  1. Part 3, described in Paragraph 7, involved the preparation of a detailed design with "the majority of the design works [to] be carried out by the Consultants…” and the production of all relevant information, and drawings and Bills of Quantities. Part 4, described in Paragraph 8, required the Lead Consultant to ensure that the construction process was carried out in accordance with the design drawings, Bills and other agreed specifications. Effectively, the Lead Consultant was to administer the construction contract.

  2. Paragraph 9 required the Lead Consultant to be responsible for appointing and paying all other Consultants (Paragraph 9.1). Paragraph 9.11 required that the tender to be submitted was to include at each stage of the work for costs and disbursements. Paragraph 9.14 referred to an attached programme which showed that the Part 2 services were to be completed by 4 July 2003. Paragraph 9.18 stated that the "appointed Lead Consultant shall enter into a formal agreement with the Borough Counsel for the appointment and performance of professional duties in connection with this Brief”. An Addendum to the Brief indicated that the Lead Consultant was to "include the provision of gymnastic equipment as part of the project”, it having an additional budget of £150,000.

  3. Mr Kendall, who described himself as partner of HLB Architects, filled in the prescribed form of tender and submitted it on 1 May 2003. The quoted price for the Part 2 services was £14,940. For Parts 3 and 4, he quoted 3.67% and 1.715% respectively, this clearly being related to the final construction costs. He also quoted rates for additional related work outside the scope of the brief; these rates related to the four relevant disciplines, Architect, Quantity Surveyor, Structural Engineer and Mechanical and Electrical Engineer. He stated:

“I understand that Parts 3 and 4 will only proceed once the council has agreed funding for the project".

At Paragraph 7 he stated:

"I/We agree to our tender remaining open for acceptance for a period of two months from the date set for submission of tenders."

  1. However, more than two months elapsed before Durham wrote to HLB by way of the e-mail on 8 August 2003:

“I am pleased to advise you that the Council wish to appoint you as the Lead Consultant for the above project.

As the scheme is subject to funding from Sport England we do not have in place the full approval to proceed with carrying out the work contained within our ‘Brief’. However, in order for the project to progress the Council are prepared to fund Part 2 of the scheme only. The work involved includes confirming Part 1 and to undertake a Feasibility study with a Costing Plan and Detailed Presentation to the Client, the cost of this work is as per your tender sum of £14,940.00.

Once I am in receipt of any further information regarding approvals from Sport England to proceed beyond Part 2 of the scheme I will advise you accordingly, meanwhile I would be obliged if you will contact me to arrange a meeting so we can progress the scheme...”

  1. On 12 August 2003, a meeting was arranged between Mr Thompson of Durham and Mr Bulmer of HLB and was clearly a follow up meeting following the e-mail. It seems clear that HLB was tasked with minuting that meeting. It was primarily a technical discussion as to the implementation of the Part 2 services. So far as is material to the issues in the case the following was minuted:

“4.0 RTB to organise site investigation.

IT thought this was part of consultants and.

RTB said the consultants usually arranged but costs usually paid by client-as planning/building regulations.

RTB will check and confirm with IT.

9.0 Programme

9.1 Arrange survey of site existing/building perimeter within 10 days.

9.2 Arrange site investigation within next two weeks…

9.4 Develop Feasibility/Design Proposals/Services beginning Sept ’03-3-4 weeks

9.5 Develop agreed layout, services and cost plan for presentation 2/3 weeks end of Sept/Oct ’03.”

 

  1. Mr Kendall gives some evidence in his witness statement dated 8 March 2011 that the question of who should pay for the site investigation was discussed initially between Mr Bulmer and the consulting engineers to be retained and that as between them it was agreed that each would pay the costs on a 50:50 basis. He says then that he spoke to Mr Thompson of Durham and agreed orally with him that his firm would bear the costs. Be that as it may, this was confirmed in writing by Mr Thompson of Durham in its letter dated 10 September 2003 to HLB in the following terms:

“As discussed and agreed at the meeting between myself and Richard Bulmer the cost of the site investigation should be included in the fee bid for the Feasibility Study as stated in the Lead Consultant’s Brief item 2.3, a copy of which is enclosed.”

I will refer to this as the “site investigation issue”.

  1. There is no doubt that HLB then carried out and completed the Part 2 Services. On 5 February 2004 HLB submitted its Interim Fee Account No. 2 which sought payment for additional design changes "in accordance with Time Charges as our Accepted Form of Tender”.

  2. On 2 March 2004, Durham wrote to HLB in the following terms:

“I confirm the Council’s request for you to commence work on Part 3 of your tender for the above project. This involves the Detailed design, Bills of Quantities and all works prior to tendering.

You should now be in a position to provide a detailed cost plan together with a preliminary timetable from design to construction and completion and a planned expenditure profile in accordance with the requirements of Part 2 of your tender.

Please contact me if you require any further information or have any queries with regard to the above.”

Again, there is no issue that HLB proceeded to do what this letter called for.

  1. On 9 August 2004, Durham sent to HLB letter stating:

“This letter is to confirm the Borough Council’s intention to proceed with the project to construct a new regional gymnastics centre at Spennymoor Leisure Centre. Although the Borough Council’s Cabinet do not meet until the 2 September 2004 at which time they will formally agree to the scope of the project in line with our recent discussions, this letter confirms the Council’s intention to agree the purchase of the steel contents of the project…

As Director of Leisure Services I am authorised to send this letter of intent.”

  1. On the 6 August 2004 HLB wrote to Durham relating to meetings and discussions with a Mr Pirrie who was the gymnastics consultant retained by Durham. Mr Pirrie recommended certain changes. Mr Kendall indicated that he would have to charge fees for the consequential redesign and went on to say that Mr Pirrie’s fee "could be in the region of £4500" and "no doubt you will make arrangements to settle his charges". It seems that there was a meeting with Durham on 10 September 2004 at which Durham agreed to the appointment of Mr Pirrie as part of the consultancy team led by HLB and that his fee to a maximum of £4500 would be payable by Durham to HLB with HLB responsible for paying Mr Pirrie. This was confirmed in a letter dated 15 September 2004 from HLB to Mr Pirrie. Mr Pirrie carried out work in this capacity. In its Interim Fee Account No. 4, HLB invoiced for Mr Pirrie’s time and for their time in dealing with him. I will refer to this as the “Pirrie issue”

  2. HLB broadly finished their work on all parts of the project by about May 2006, being the date of their last fee invoice. It is clear that apart from additional services, claimed for on the basis of the rates contained in HLB’s tender to Durham, it claimed for percentage fees as tendered for.

  3. The dispute with which the adjudication was concerned was an alleged failure of the below ground concrete floor of the gymnasium. It was said that the floor failed in October 2005 as a result of a large amount of water discharging into the foundations from rainwater pipes from the roof which, at that time, had not been connected to the drains. Durham’s complaint was that the floor had not been designed to withstand the water penetration with the result that the floor lifted in the middle and water penetrated the basement affecting the floor and the walls. Durham asserted that it had been caused losses in connection with work involved in investigating and lowering the water table, installing and maintaining pumping equipment and in delay related losses associated with putting right the problem.

  4. For reasons which are unclear but probably immaterial, it was not until 12 October 2010 that Durham served its Notice of Adjudication on HLB.

The Adjudication

  1. The Notice of Adjudication and the Referral Notice which followed on 14 October 2010 were addressed to HLB Architects and not Mr Kendall as such. Broadly they sought damages in effect for a breach of contract in relation to the floor slab and water penetration problem. The sum of £149,841.20 plus VAT was sought together with interest of £29,327.82

  2. By letter dated 18 October 2010 to the Adjudicator, HLB’s or Mr Kendall’s solicitors raised a number of jurisdictional objections. The first (no longer pursued) was that there was no dispute or difference. The second was that "HLB…does not exist”. It seems clear that the solicitors were acting for Mr Kendall. The third was that there was no agreement in writing and it is part of this argument that is still maintained. Thus it was argued by the solicitors that the tender was not a concluded contract and that the Brief was not and was not intended to be the Consultant’s appointment. It was said that not all the terms of the agreement were evidenced in writing; examples of this were given but none of these are currently pursued. They continued:

“Accordingly, all the contract terms are not evidenced in writing and there is no agreement in writing for the purposes of the Act. In the circumstances, there is no valid reference to adjudication and you do not have jurisdiction to determine this adjudication…

For the avoidance of doubt our client does not agree to be bound by any findings which you may make in regard to the matters raised in this letter and reserves the right to raise any or all of these points or related points in connection with any enforcement proceedings which may ultimately arise.”

I will refer to this as “the first reservation”. The "second reservation” followed in an e-mail to the Adjudicator on the following day reiterating its specific jurisdictional arguments and concluding:

"The Responding Party reserves the right to raise any jurisdictional and/or other issues, in due course, whether previously raised or not and whether within the forum of adjudication or other proceedings and the Responding Party’s correspondence and/or submissions in this adjudication are made entirely without prejudice to this right."

  1. Durham’s solicitors responded on 22 October 2010 in a letter to the Adjudicator and Mr Kendall’s solicitors responded to the points made by the letter, reiterating their specific earlier arguments and concluding:

“For the reasons given it is clear that, in each of the grounds we have raised there is no jurisdiction to you to determine this dispute. For the reasons given we invite you to resign…

For the avoidance of any doubt our client does not agree to be bound by any findings which you may make in regard to the matters raised in this response and reserves the right to raise any or all of these points or related points in connection with any enforcement proceedings which may ultimately arise.”

I will refer to this as the "third reservation".

  1. The Adjudicator replied thereafter that he believed that he had jurisdiction and would proceed with the adjudication. On 1 November 2010, HLB served its Response. Paragraph 1 deals with a reservation of rights ("the fourth reservation"):

“The Responding Party identifies three challenges to the Adjudicator’s jurisdiction in correspondence as follows:

1.1 I There is no crystallised dispute between the parties;

1.2 The named Responding Party is not a legal personality capable of (a) being a party to an adjudication or (b) entering into a contract. It is a trading name only;

1.3 There is no agreement in writing (and in this respect submission 1.2 (b) is repeated).

2. These challenges remain and are not waived by this Response.

3. The named Responding party is not a legal personality. It is not capable of being a party to this adjudication or-and in any event-the alleged underlying agreement.

4. The Architect on this project was Jeremy Kendall, as the Referring Party well knew. He is not a party to this adjudication.

5. References to the Responding Party within this document are, therefore, wholly artificial and assume that HLB Architects is a legal personality. This assumption is incorrect. The submissions set out below are entirely without prejudice to this overarching point.

6. For the avoidance of doubt, Beachcroft LLP is instructed on behalf of Jeremy Kendall t/a HLB Architects…

8. Accordingly the Responding Party does not agree to be bound by any findings that the Adjudicator may make in regard to the matters raised in this adjudication and reserves the right to raise any or all of these points and the jurisdiction points previously raised and/or related points in connection with any enforcement proceedings which may ultimately arise."

  1. The "fifth reservation" was made in an e-mail dated 17 November 2010 which addressed the merits that concluded with these words:

“For the avoidance of any doubt our client does not agree to be bound by any findings which you may make in regard to the matters raised in this e-mail and fully reserves all its rights in connection with the various jurisdictional objections previously made with regard to any enforcement proceedings which may ultimately arise.”

  1. The Adjudicator issued his decision on 18 November 2010 which broadly found in favour of Durham. He decided that HLB should pay Durham the sum of £166,930.53 (inclusive of interest) plus VAT and that HLB should be responsible for the payment of his fees which totalled £29,404.37 inclusive of VAT.

  2. This decision was not honoured by HLB and thus it was that the current proceedings were issued to enforce that decision on 10 February 2011.

These Proceedings

  1. The proceedings were issued by Durham against Jeremy Kendall trading as HLB Architects. Durham simply seeks the enforcement of the adjudication decision. It submitted apart from Particulars of Claim two witness statements from Mr Griffin its solicitor. They are answered by two witness statements from Mr Kendall.

  2. A number of points are taken by Mr Kendall through his Counsel:

(A) It is said that not all of the terms of the contract were made or evidenced in writing;

(B) It is said that even if all terms of the contract were in writing there were on analysis three separate disputes under three separate contracts relating respectively to Parts 2, 3 and 4.

(C) The Defendant as named in this action is not the same as the party named as the responding party in the adjudication and, because there is no decision against the Defendant in these court proceedings, Durham can not enforce against him.

The Law

  1. Save in one area, the law is relatively uncontroversial. It is clear that for the purposes of the Housing Grants Construction and Regeneration Act 1996, the contract and all its terms must be in or evidenced by writing. The relevant authority is the Court of Appeal in RJT Consulting Engineers Ltd v DM Engineering (NI) Ltd [2002] BLR 217. Part of the reason for this is that certainty was regarded as important as "the adjudication has to start with some certainty as to what the terms of the contract are". Section 107 of the Act states:

“ (2) There is an agreement in writing—

(a) if the agreement is made in writing (whether or not it is signed by the parties),

(b) if the agreement is made by exchange of communications in writing, or

(c) if the agreement is evidenced in writing.

(3) Where parties agree otherwise than in writing by reference to terms which are in writing, they make an agreement in writing.

(4) An agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement.”

 

This latter point is of some materiality here in that, in my judgement, if one of the parties to the agreement produces an agreed minute of a meeting, that is capable of being a written record if and to the extent that the minute records agreement in writing on a material term.

  1. In Allen Wilson Joinery Ltd v Privetgrange Construction Ltd [2008] EWHC 2802 (TCC), the following was said at Paragraph 27 and is equally applicable here:

“(a) For there to be a construction contract in writing for the purposes of Section 107 and Part II of the HGCRA, all the terms of the contract must be in writing and recorded in one of the ways set out in Section 107.

(b) Whilst adjudicators (and indeed judges) should be robust in determining whether trivial matters said to have been agreed only orally between the parties can prevent what would otherwise be a written contract for the purpose of Section 107 being a written contract, the exercise of determining what is trivial must be an objective one in relation to the particular contract and parties concerned. What may be "trivial" in one contract may not be in another. Thus, for example, an oral agreement on a million pound project as to which of two mildly differing shades of light blue paint might be used may be trivial on one development but not on another.

(c) It is always necessary to determine whether a so-called agreement made orally was in reality expected or intended to be binding as between the parties. Thus, the parties having discussed and agreed something orally might later have reduced their agreement into writing in such a way as to supersede the earlier oral agreement. A later oral agreement may not be binding; for instance, it may lack consideration or otherwise may not be intended to be binding .”

  1. In relation to reservation of rights relating to the jurisdictional objections, a number of earlier cases were reviewed in CN Associates v Holbeton Ltd [2011] EWHC 43 (TCC):

“31. On the issue of reservation relating to jurisdiction, the position was at least generally summarised in the judgment in Allied P & L Ltd v Paradigm Housing Group [2009] EWHC 2890 (TCC) at Paragraph 32:

"It has long been established in the relatively short period of time in which the Housing Grants Construction and Regeneration Act 1996 ("HGCRA") has been in force that it is necessary for a party challenging the jurisdiction of the adjudicator to reserve its position in relation to its challenge; for instance, although not cited in argument, this issue was raised and commented upon by Mr Justice Dyson as he then was in The Project Consultancy Group v The Trustees of the Gray Trust [1999] BLR 377 at Paragraphs 14 and 15. Having reserved its position appropriately and clearly, that party can safely continue to participate in the adjudication and then, if the decision goes against it, to challenge its enforceability on jurisdictional grounds in the Court. If it does not reserve its position effectively, generally it cannot avoid enforcement on jurisdictional grounds. I say generally because there might be unusual circumstances in which a jurisdictional challenge can be mounted when there has been no reservation; for instance, if the party making the challenge did not know or could not reasonably have ascertained the grounds of challenge before the decision was issued. It is however difficult to envisage circumstances in which a jurisdictional challenge on the grounds that there is no dispute should not and can not be the subject of a reservation of rights."

32. In Aedifice Partnership Ltd v Ashwin Shah [2010] EWHC 2106 , the Court reviewed a number of the relevant authorities:

"15. So far as jurisdictional objections that have been or could be taken during the adjudication, one will need to ascertain whether the parties have expressly agreed to give the adjudicator jurisdiction to resolve those objections or, even if they have not as such done so, whether the objecting party has effectively reserved or waived its position on jurisdiction. For instance in Pilon Ltd v Breyer Group Ltd [2010] EWHC 837 (TCC) , Mr Justice Coulson said:

"12. The law on this topic is clear. Jurisdictional issues often arise during the course of an adjudication, and it is usually sensible for the parties to ask the adjudicator to investigate the issue and state his conclusion. But, unless the parties have also agreed to be bound by the result of the adjudicator's investigation into his own jurisdiction, his ruling on that issue will not be determinative, and the challenger can defeat any subsequent enforcement proceedings by showing a respectable case that the adjudicator had reached an erroneous conclusion as to jurisdiction: see, in particular, paragraph 10 of the judgment of May LJ in Pegram Shopfitters Limited v Tally Weijl (Uk) Limited [2003] EWCA Civ 1750 .

13.Accordingly, there needs to be either an express agreement between the parties that the adjudicator's decision on jurisdiction is to be binding or, at the very least, an implied agreement to the same effect, which may arise where the objecting party fails to reserve its position, or there has been a unilateral waiver of any jurisdictional objection. In both JW Hughes Building Contractors Limited v GB Metal Work Limited [2003] EWHC 2421 (TCC) and Nordot Engineering Limited v Siemens Plc [2001] CILL 1778, the court found an ad hoc agreement between the parties that they would be bound by the adjudicator's decision as to jurisdiction, but such cases are rare. Generally speaking, as Dyson LJ put it in Amec Projects Limited v Whitefriars City Estates Limited [2004] EWCA Civ 1418 , "the 'decision' of an adjudicator as to his jurisdiction is of no legal effect and cannot affect the rights of the parties….""

16. In Thomas-Fredric's (Construction) Ltd v Keith Wilson [2003] EWCA Civ 1494 , Simon Brown LJ (as he then was) said:

"33. The position can I think be summarised in the following two propositions. (1) If a defendant to a Part 24(2) application has submitted to the adjudicator's jurisdiction in the full sense of having agreed not only that the adjudicator should rule on the issue of jurisdiction but also that he would then be bound by that ruling, then he is liable to enforcement in the short term, even if the adjudicator was plainly wrong on the issue. (2) Even if the defendant has not submitted to the adjudicator's jurisdiction in that sense, then he is still liable to a Part 24(2) summary judgment upon the award if the adjudicator's ruling on the jurisdictional issue was plainly right."

17. There is obviously no great difficulty about an express agreement made by both parties with their eyes open that the adjudicator should have jurisdiction to produce a binding decision that he has jurisdiction to resolve the particular dispute referred to adjudication. It is with the implied agreement or waiver or abandonment of a jurisdictional objection that parties and indeed adjudicators get into murkier waters. There is no doubt that, when one party raises a jurisdictional objection, good or bad, adjudicators, like arbitrators, are entitled to enquire into their own jurisdiction. In practice in adjudication, that will usually involve considering the Referral, witness statements and other documents available to the adjudicator at the time that he is making that enquiry. Even if no objection is made, an adjudicator who believed that he had no jurisdiction could raise the issue with the parties and, unless persuaded otherwise or the parties agreed to give him jurisdiction, he could stand down.

18. There have been a number of observations in various cases about what is needed for a party making a jurisdictional objection during the course of the adjudication effectively to do so. In Project Consultancy Group v Trustees of the Gray Trust (1999) 65 Con LR 146, Mr Justice Dyson had to deal with an allegation that there had been an ad hoc agreement to refer a jurisdictional issue to the adjudicator. He said dealing with the particular facts:

"In my view, the defendants' solicitor's letter of 9 March 1999 stated in the clearest terms that the defendants protested the adjudicator's jurisdiction, and that they would not recognise and comply with any decision to award money to the claimant. The letter also made it clear that, if the adjudication proceeded, they reserved their rights to participate, but without prejudice to their contention that there was no jurisdiction. I do not consider that there can be any reasonable doubt as to the meaning of that letter. The only real question is whether, by participating in the adjudication process, the defendants waived the jurisdiction point, and agreed to submit to abide by the decision of the adjudicator on that issue. The only material relied on by Ms Rawley [Counsel] is the content of the defendants' response…But, in their response, the defendants continued to assert that the adjudicator had no jurisdiction…It is a matter of fact whether a parties submit to the jurisdiction of the third person…"

19. In Euro Construction Scaffolding Ltd v SLLB Construction Ltd [2008] EWHC 3160 (TCC) , the judge said:

"So far as jurisdiction challenge to an adjudicator is concerned, it is necessary for the party objecting to the adjudicator's jurisdiction to make a clear and full reservation".

The report of that case goes on to review whether an adequate reservation was made and considers, amongst other things, whether the adjudicator proceeded on the basis that there had been a reservation about jurisdiction. In that case, there had been an effective reservation but in the event the jurisdictional challenge was not a good one.

20. In CJP Builders Ltd v William Verry Ltd [2008] EWHC 2025 (TCC) , the following was said at Paragraph 72:

"Various cases such as Thomas Frederic's (Construction) Limited v Keith Wilson [2004] BLR 23 and The Project Consultancy Group v The Trustees of the Grey Trust [1999] BLR 377 make it clear that if there is to be an objection to jurisdiction of the arbitrator generally there should be a clear reservation of the objecting party's stance on jurisdiction. Such a reservation will usually be done effectively by clear words but it could also be done by unequivocal conduct."

21. I can draw these various strands together:

(a) An express agreement to give an adjudicator jurisdiction to decide in a binding way whether he has jurisdiction will fall into the normal category of any agreement; it simply has to be shown that there was an express agreement.

(b) For there to be an implied agreement giving the adjudicator such jurisdiction, one needs to look at everything material that was done and said to determine whether one can say with conviction that the parties must be taken to have agreed that the adjudicator had such jurisdiction. It will have to be clear that some objection is being taken in relation to the adjudicator's jurisdiction because otherwise one could not imply that the adjudicator was being asked to decide a non-existent jurisdictional issue which neither party had mentioned.

(c) One principal way of determining that there was no such implied agreement is if at any material stage shortly before or, mainly, during the adjudication a clear reservation was made by the party objecting to the jurisdiction of the adjudicator.

(d) A clear reservation can, and usually will, be made by words expressed by or on behalf of the objecting party. Words such as "I fully reserve my position about your jurisdiction" or "I am only participating in the adjudication under protest" will usually suffice to make an effective reservation; these forms of words whilst desirable are not absolutely essential. One can however look at every relevant thing said and done during the course of the adjudication to see whether by words and conduct what was clearly intended was a reservation as to the jurisdiction of the adjudicator. It will be a matter of interpretation of what was said and done to determine whether an effective reservation was made. A legitimate question to ask is: was it or should it have been clear to all concerned that a reservation on jurisdiction was being made?

(e) A waiver can be said to arise where a party, who knows or should have known of grounds for a jurisdictional objection, participates in the adjudication without any reservation of any sort; its conduct will be such as to demonstrate that its non-objection on jurisdictional grounds and its active participation was intended to be and was relied upon by the other party (and indeed the adjudicator) in proceeding with the adjudication. It would be difficult to say that there was a waiver if the grounds for objection on a jurisdictional basis were not known of or capable of being discovered by that party."

33. There is little to add to these observations. If a party does not effectively reserve its position on a given jurisdiction issue, of which it had actual or constructive knowledge, it can not raise it as an effective objection to a claim for the enforcement of the relevant adjudication decision. It becomes a somewhat different point if there arises an issue as to whether the parties have or are to be taken to have agreed that the adjudicator is to have jurisdiction to decide his or her own jurisdiction. One then needs to determine whether there was by words or conduct or both an agreement, express or implied, to that effect. Even if there was agreement, however, the Adjudicator must adjudicate upon it; he or she must go further than simply enquiring into his or her jurisdiction and reaching a provisional view. If he or she does not adjudicate upon jurisdiction which the parties have by agreement conferred on him or her, then there will be no binding decision on that issue and the Court may then have to resolve the issue.”

  1. In GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2010] BLR 377, Mr Justice Ramsey addressed the general as opposed to specific jurisdictional objection:

“35. Akenhead J [in Allied P& L v Paradigm] did not in that paragraph deal with the position where there was a general reservation with specific reservations and left open the position on the effect of general reservations.

  1. Generally a party who wishes to do so can object to the jurisdiction of an adjudicator and may seek to do so either in general terms or by making a reservation on a specific matter.

  2. The underlying issue is whether, taking account of the particular reservation, a party by participating in the adjudication has waived its right to object on grounds of jurisdiction. If the party does not raise any objection and participates in the adjudication then, even if there is a defect in the jurisdiction of the adjudicator, that party will create an ad-hoc jurisdiction for the adjudicator and lose the right to object to any decision on jurisdictional grounds. If a party raises only specific jurisdictional objections and those jurisdictional objections are found by the court to be unfounded then that party is precluded from raising other grounds which were available to it, if it then participates in the adjudication. That participation amounts to a waiver of the jurisdictional objection and confers ad-hoc jurisdiction. Obviously this assumes that, at the relevant time when the party participated in the Adjudication, the jurisdictional objection was available. Some jurisdictional objections, for instance as to the scope of the dispute, may only become apparent during the adjudication process or at the time of the decision.

  3. Where a party raises a general reservation to the jurisdiction of an adjudicator but does not specify any particular ground for such an objection that raises potential difficulties for both the adjudicator and the other party. The adjudicator cannot investigate any specific objection and, if appropriate, decide not to proceed. The other party cannot decide whether any specific objection has merit. If so it might decide whether to take steps to remedy the situation by, for instance, starting a new adjudication. Equally, if a general reservation as to jurisdiction were to be sufficient to cover all matters that had arisen or might arise then there would, in principle, be no need for any specific objection, except to give the other party and the adjudicator a chance to consider it.

  4. Those practical difficulties suggest that the use of general reservations is undesirable but that does not answer the question whether a general jurisdictional reservation does permit a party to participate in an adjudication without thereby waiving its right to objection on jurisdictional grounds. The decision in Bothma provides strong support for the effectiveness of a general reservation. In addition in the context of arbitration, prior to the provisions of s.73 of the Arbitration Act 1996, a general reservation was held to the sufficient to preserve objection to jurisdiction by a party who participated in an arbitration. In Compania Maritima Zorroza SA v Sesostris SA, The Marques de Bolarque [1984] 1 Lloyd's Rep 652, the respondent to an arbitration had written at the time of the nomination of an arbitrator by the claimant to say that, " without prejudice to such rights as owners may have ", they were nominating an arbitrator. Those general words were held by Hobhouse J at 660 to be a sufficient reservation of the right to object to the jurisdiction of the arbitrator and so did not confer a jurisdiction on the arbitrators which they did not otherwise have.

  5. That decision was applied by Potter J in Allied Vision Ltd v VPS Film Entertainment Gmbh [1991] 1 Lloyd's Rep 392 where he said:

" Mr. Justice Hobhouse made clear that what matters is a clear qualification at the time of the appointment of the arbitrator and, implicitly, that if that is done then subsequent participation in the arbitration under the umbrella of the original reservation will not, without more, amount to a waiver or ad hoc submission. "

  1. I respectfully adopt that approach which seems to me to be equally applicable in the case of adjudication. The question in this case is therefore, whether the words of general reservation were sufficiently clear to prevent Ringway's subsequent participation in the adjudication from amounting to a waiver or an ad-hoc submission. In my judgment the words used both in the letters of 3 and 10 July 2009 and in the Response were sufficient to prevent a waiver of any jurisdictional argument, including one based on the alleged agreement of compromise/withdrawal and, as a result, there was no ad-hoc submission.”

  2. This suggests that a general reservation with the use of appropriate wording should suffice to reserve the position of a defending party in adjudication. However it will be necessary to interpret what it is that the defending party has said (a) to determine whether a general reservation has been set up and (b) in appropriate cases whether the general reservation has been maintained.

Discussion

  1. As this is a summary judgement application brought by the party seeking enforcement of the adjudication decision, it is first necessary to determine whether or not any defence put forward by the Defendant has any realistic prospect of success. The first issue is whether or not on all the evidence before the Court there was a binding agreement or agreements evidenced or contained in writing. The first part of this issue involves determining what if any contract there was between the parties. I have formed a very clear view that there was a single binding contract between the parties; my reasons are as follows:

(a) There can be no doubt that HLB’s tender was an offer capable of acceptance. Paragraph 2 actually states that HLB "hereby offer and agree to carry out the service, in accordance with the design brief and letter of invitation…”

(b) It equally clear that the offer was expressed to remain open for acceptance for two months. It is common ground that this had expired by the time that Durham sent its e-mail of 8 August 2003. Therefore, the offer had lapsed and, again it is properly common ground that, this e-mail itself was a counter offer capable of acceptance.

(c) The whole tenor of the meeting of 12 August 2003 as minuted is that HLB was being asked to proceed and was agreeing to proceed. A programme was agreed and it is not controversial that HLB proceeded with the works.

(d) I have no doubt that what was said and minuted and, if necessary, HLB’s conduct in proceeding with the work thereafter amounted to acceptance of the counter-offer.

  1. The only issue raised in relation to this is the "site investigation issue". There was recorded agreement at the meeting of 12 August 2003 that HLB was to organise the site investigation and Durham thought that this was part of the consultant’s brief. I have little doubt that it was part of the Lead Consultant’s Brief which at Paragraph 2.3 clearly requires the appointed Consultant to carry out "sufficient site investigations to determine ground conditions”. There is no dispute that the parties actually agreed that HLB would be responsible financially for the site investigation work as well. Mr Kendall accepts that this was orally agreed (orally at least) somewhat later and it is expressly recorded in Durham’s letter dated 10 September 2003 albeit the agreement was made or confirmed also at a meeting between Mr Thompson and Mr Bulmer.

  2. The next part of this issue involves determining what the agreement actually was: was it simply an agreement whereby HLB was appointed to carry out only Part 2 of the project or Parts 2, 3 and 4? The whole thrust of the e-mail of 8 August 2003 and the contents of the meeting minutes of 12 August 2003 is that HLB is being appointed as the Lead Consultant for the whole project. In commercial terms, subject to funding, there would be little point in having one Lead Consultant for Part 2 and another, when the funding came along, for Parts 3 and 4. The question of funding however was, properly analysed, by way of condition subsequent, that is, HLB is appointed as Lead Consultant for the whole project but in relation to Parts 3 and 4 only if and when funding is secured. Again, that is the clear intent of the e-mail of 8 August 2003. It cannot be a matter of total insignificance that every invoice presented by HLB was expressly presented on the basis of agreed fees and rates for additional work exactly as intended for by HLB. Mr Kendall in his written evidence suggests that he believed that he had a right to renegotiate his fees at any of the three stages, Parts 2, 3 and 4. That may have been his belief, but he does not suggest that he voiced it to Durham or their representatives; it is of course true that when the counter-offer of 8 August 2003 came in he did have the right to say no but, by everything he or his employee said and did, such a qualification was not made.

  3. The next issue is whether or not the contract between the parties was fully evidenced in writing. Many contracts may be negotiated on a written basis with relatively vestigial terms. A subcontractor may tender on the basis that it is paid £X for "carrying out works as described on the drawings”; that may be accepted in writing: “Please go ahead on the basis of your tender”. If that is the basis on which the sub-contract comes into being, the fact that the terms of the contract as evidenced in writing are vestigial, being two lines’ worth, matters not for the purposes of Section 107 of the 1996 Act because all the terms agreed between the parties are evidenced in writing. In my judgement, the contract between the parties in this case was evidenced in writing. It is quite clear that the counter-offer of 8 August 2003 specifically relates back to the Lead Consultant’s Brief and the tender and the counter-offer was accepted, eventually, in full; therefore the Brief, the tender, the e-mail of 8 August 2003 and the minute of the 12 August 2003 meeting undoubtedly evidenced the contract and, subject to the site investigation issue, all the terms of the contract. The minute was clearly intended to be an agreed minute which HLB produced. The minute clearly confirms in any event that HLB will be responsible for organising the site investigation. What the parties agreed at the meeting was that HLB would go ahead with its Part 2 services in any event (surveying and levelling exercises work to be done shortly thereafter) but that Mr Bulmer would revert to Mr Thompson of Durham on whether HLB accepted that it should pay for the site investigation. Irrespective of what may have been orally agreed between Mr Kendall and Mr Thompson, it is clear that this was agreed between Mr Bulmer and Mr Thompson and confirmed in the latter’s letter of 10 September 2003. In my view, if nothing else, that letter evidenced in writing this relatively minor issue, which was in any event clear from the terms of the Brief which had otherwise been accepted. It is suggested that an agreement can only be evidenced in writing “ if…made otherwise than in writing [if it] is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement”, as set out in Section 107(4) of the 1996 Act. That is, in my judgement, much too narrow and restrictive an interpretation of that sub-section. The wording is not that a contract can "only" be evidenced in writing if it is formally recorded by one party with the authority of both parties. That would certainly not be a purposive interpretation. Even if I was wrong about that, it would be the case that the letter of 10 September 2003 recorded the agreement about payment of the site investigation; there is no suggestion that this was challenged and a reasonable inference is that the parties accepted that it was effectively recorded.

  4. There are two remaining arguments to address in relation to whether the contract was evidenced in writing. The first is whether or not acceptance must be recorded in writing. I do not consider that it must be, albeit that it often is. There may be cases in which unequivocal conduct such as the commencement of work can properly be considered to be acceptance. There is no requirement in the 1996 Act that acceptance must be recorded in writing. What must be in or evidenced in writing are all the terms of the contract. In any event, the acceptance here is recorded in writing by the minutes of the 12 August 2003 meeting as well as the letter of 10 September 2003, coupled with HLB’s proceeding with the provision of services. The second issue is whether or not the implementation or satisfaction of the conditions subsequent must be in writing. In my view, where the parties’ underlying agreement, containing the conditions subsequent, is evidenced in writing for the purposes of the 1996 Act, there is no need for the purposes of that Act that the occurrence of the conditions subsequent must be evidenced in writing. This is because those conditions are evidenced in writing in the underlying contract.

  5. The above reasoning disposes of every point made by Mr Kendall, in relation to the contract between the parties. It follows that the defences put forward by him in these proceedings that the contract was not fully evidenced in writing and that there were three contracts rather than one has no realistic prospect of success. All that happened in relation to Parts 3 and 4 was that the conditions subsequent, the securing of funding, clearly were satisfied. There is the Pirrie issue about which there is no real doubt that the provision of Mr Pirrie’s services and HLB’s related work were and were to be treated simply as additional services under the existing contract. I do not consider that in any arguable sense the involvement of Mr Pirrie varied the contract as such; this was treated as an additional service under the contract. In any event, the agreement to his involvement was fully evidenced in writing.

  6. A final argument raised but not pressed with any vigour by Counsel for Mr Kendall was that the case of Redworth Construction v Brookdale Healthcare Ltd [2006] BLR 366 is said to establish that in enforcement proceedings a claimant cannot go beyond that the matters on which it relied in the adjudication in support of its argument that the adjudicator had the necessary jurisdiction. This is a somewhat difficult argument to maintain when, apart from the point relating to the identity of HLB (see below), none of the points currently made were obviously pursued by HLB in the adjudication. The basis of the Redworth decision was election and, it follows that, if and to the extent that HLB did not raise specific jurisdictional objections now relied upon, the doctrine of election simply can not apply because Durham could not elect to adopt a series of arguments to deal with jurisdictional objections which had not been made.

  7. That leaves his final point which is that the adjudication was initiated and pursued and the decision issued against an entity, HLB Architects, whilst the Court proceedings had been initiated against Mr Kendall trading as HLB Architects. There is no doubt that HLB Architects is a firm of which Mr Kendall is the sole proprietor; in other terms, he is HLB Architects. Although there was a hint from Counsel that, at the time of the tender and possibly later, there might have been another partner in the firm, there is no hint of that in the evidence put before the court. Indeed, to be fair to him, Mr Kendall does not suggest that and his statements speak in terms of him tendering and personally agreeing things; for instance, at Paragraph 4 of his first statement, he says: "I…decided that I would like to tender for this work". In my view, this point, apart from being wholly without merit, is a bad one. In law, HLB Architects was in effect and reality Mr Kendall; that is the name under which he traded. The firm had no independent legal existence apart from him. If someone trades under a particular name, and then is sued or otherwise proceeded against under that name, essentially it is he (or she) who is being proceeded against. The contract here was between Durham and HLB Architects which everyone must have understood was effectively a contract between Durham and Mr Kendall. Although the point was raised in the adjudication, in practice it did not stop Mr Kendall from fully participating in those proceedings.

  8. It is unnecessary for me to decide the issues relating to waiver of jurisdictional objections. Out of deference to the arguments of Counsel, I will summarise what my views would have been. The first, third, fourth, and fifth reservations were specific reservations on specific points. The language used was clearly related to the specific jurisdictional points which had been raised or "related” issues; the language typically was that HLB:

“... reserves the right to raise any or all of these points and the jurisdiction points previously raised and/or related points ” (emphasis added)

In context, this type of reservation goes to the points raised and not to any general jurisdictional complaint. The one reservation which is general is the second one where the language is clearly general:

"[HLB] reserves the right to raise any jurisdictional and/or other issues, in due course, whether previously raised or not ” (emphasis added)

It is overwhelmingly clear that ultimately, and in particular in the Response, HLB pinned its jurisdictional objection colours only to the mast of specific jurisdictional objections rather than a general objection. Put in more legal language, HLB was clearly abandoning any general jurisdictional objection. Any reasonable party and the Adjudicator would have understood by the conclusion of the adjudication that the only jurisdictional objections being maintained were the specific ones. It would therefore follow that, since none of the objections now raised in these proceedings (other than the identity of HLB) were specifically raised before the adjudicator, HLB or more properly Mr Kendall, has waived any rights to raise such objections.

Decision

The Adjudicator had jurisdiction to decide the dispute between the parties, being Durham and Mr Kendall. There was one contract whose terms were fully evidenced in writing. There should be judgement in favour of Durham and the Adjudicator’s decision should be enforced.