Nolan Davis Ltd v Steven P Catton (No1) [2000] EWHC 590

This summary was provided by CMS Cameron McKenna LLP.

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If parties agree to give the adjudicator the power to decide questions of jurisdiction, they will be bound by such election. In some circumstances, a director of a company may be personally liable where the company is not identified as the employer.

HHJ Wilcox QC, Technology & Construction Court

22 February 2000

C was the managing director of a company known as Hazel Green Village Management Ltd. The company was based at a holiday village known as Hazel Green Village, and there were another 10 companies at the resort with similar names.

C entered into a contract with N to demolish some units and carry out new build work. The contract was the Small Works Form published by the Architects and Surveyors' Institute. The employer was described in the Appendix as "Hazel Green." In fact, there was no company of that name.

A dispute arose, and N consulted Pye Consulting, when it was discovered that Hazel Green did not exist. Pye obtained counsel's opinion. Counsel advised that under the Companies Act 1985, since no company of the name of Hazel Green existed, the contract could have been entered into by C in person:

"Where a contract purports to be made by a company ... at a time when the company has not been formed ... then ... the contract has the effect as one entered into by the person purporting to act for the company ... and he is personally liable."

C said that everyone knew that the contract was entered into by one of the companies and not by him. An adjudicator was appointed, and the parties decided to give him the power to decide the jurisdictional dispute of the identity of the employer. The adjudicator was not able to identify one of the eleven similarly named companies as employer, and therefore found that C was liable. The adjudication proceeded and N was awarded sums payable by C, plus its costs.

During the enforcement proceedings, C argued that there was no jurisdiction for the adjudicator because there was no contract at all. The court disagreed. The parties had agreed to be bound by the adjudicator's decision as to jurisdiction. There was no arguable case that the parties were in error as to with whom they were contracting.

C also challenged the adjudicator's jurisdiction to award costs. The court found that there was jurisdiction as each side had asked the adjudicator to award it costs. C was also refused his application for further time to pay.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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