Cain Electrical v Richard Cox t/a Pennine Control Systems [2011] EWHC 2681 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-lawnow.com/adjudication

Judgment date: 24 May 2011

SUMMARY

(1) The question of the jurisdiction of the Adjudicator was a question for the court.  Subject to any argument of election or estoppel (which was not advanced in this case), this question is not determined or circumscribed by what either party may have argued before the Adjudicator.  (2) Where, therefore, at the time of the adjudication one of the parties was relying upon terms orally agreed but the parties come to agree, after the Adjudicator has made his decision, that  a contract wholly  in writing was in force between the parties, the Court will enforce the Adjudicator’s decision.

Technology and Construction Court, Judge Havelock-Allan Q.C.

BACKGROUND

The dispute arose from a sub-sub-contract to carry out cable works on the Humber Bridge between the sub-contractor, Pennine Control Systems (“PCL”) and the sub-sub-contractor, Cain Electrical Limited (“CEL”). CEL claimed it carried out additional works and incurred additional costs, and referred the dispute to adjudication. In the adjudication, CEL relied upon the terms of PCL’s purchase order and certain other terms that were said to have been agreed orally.  In its response, PCL denied that the matters alleged to have been orally agreed were in fact agreed and contended that, if the oral agreements were part of CEL’s case, the Adjudicator lacked jurisdiction to entertain the claim because the contract relied upon by CEL was not a contract in writing for the purposes of section 107 of the Housing Grants, Construction and Regeneration Act 1996. The Adjudicator found that there was a contract in writing and that he therefore had jurisdiction.  On the basis of the contract as he found it, he decided that PCL should pay CEL £32,989.49 plus VAT and interest, as well as his fees.


CEL commenced legal proceedings to enforce the Adjudicator’s decision.  PCL paid £23,000 plus VAT, without admission of liability, shortly after proceedings were issued.  CEL applied for summary judgment for the outstanding amounts, including the Adjudicator’s fees which CEL paid following PCL’s refusal.

PCL argued that summary judgment enforcing the Adjudicator’s decision was inappropriate as the Adjudicator had had no power to make a binding decision on the case that was put before him. During the enforcement hearing, CEL made it clear that it was abandoning its reliance upon the alleged oral terms and that it now relied upon PCL’s purchase order and an exchange of email between the parties of the same day.

ISSUES

The Court was asked to address the  issue of whether the Adjudicator had jurisdiction to determine the dispute.

DECISION

The Court held:

  • The question of the jurisdiction of the Adjudicator was a question for the court.  Subject to any argument of election or estoppel (which was not advanced in this case), this question is not determined or circumscribed by what either party may have argued before the Adjudicator.  CEL could, therefore, “disown” its claim that parts of the contract were orally agreed.
  • PCL had always denied that any terms were ever agreed which were not put in writing.
  • Therefore PCL did not have a reasonable prospect of establishing that the Adjudicator did not have jurisdiction.
  • CEL was awarded summary judgment for the amounts claimed.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-lawnow.com/adjudication

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