Picardi (Gennario Maurizio) (t/a Picardi Architects) v Cuniberti [2002] EWHC 2923 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

In contracts with a residential occupier (to which HGCRA 1996 does not apply) adjudication provisions may be unenforceable if they are not fairly and properly brought to the client's attention and individually negotiated.

His Honour Judge Toulmin CMG QC, Technology and Construction Court

19 December 2002

The Defendants ('the Cunibertis') engaged the Claimant Architect ('Mr Picardi') in connection with the refurbishment of their private dwelling house. The works cost in excess of £2m. A dispute concerning Mr Picardi's fees was referred to adjudication. The adjudicator decided that the Cunibertis should pay outstanding fees of £42,862, his fees of £5,760 plus VAT and interest.

It was agreed that there could be no statutory right to adjudication under the HGCR Act 1996, because the Act does not apply to a construction contract with a residential occupier. Mr Picardi sought a declaration from the court that he had concluded with the Cunibertis a contract incorporating the RIBA Conditions of Engagement (CE/99) (including the provisions allowing for disputes to be referred to adjudication).

The Judge found against Mr Picardi on a number of bases:

5          There was no contract between the parties that incorporated CE/99. Mr Picardi's letter of appointment was based on the RIBA model letter of appointment. It suggested, as the model letter does, that the letter and the accompanying copy of CE/99 should be signed and returned by the architect's clients. The Judge held that the letter was required to be signed as a condition of the conclusion of the contract. The Cunibertis never signed it. Other evidence also suggested that there was no concluded contract.

6          Even if there was a contract, Mr Picardi could not validly invoke any adjudication provisions. As the RIBA guidance notes on CE/99 state, the adjudication provisions are unusual terms (because adjudication would not otherwise be available). As such they should have been brought properly and fairly to the Cunibertis' attention. Mr Picardi did not do this.

7          Even if there was a contract incorporating the adjudication provisions they were excluded by the Unfair Terms in Consumer Contracts Regulations 1999 ('the UTCCR 1999'). The UTCCR 1999 applied because Mr Picardi was a supplier and the Cunibertis were consumers. The Judge held that the adjudication provisions created a significant imbalance in the parties' rights and obligations to the detriment of the consumers (the Cunibertis). He took into account the following:

  • The Cunibertis would incur irrecoverable expenditure in an adjudication: a procedure that Parliament deliberately decided should not apply to them;
  • The RIBA guidance notes on CE/99 suggest clauses such as the adjudication provisions should be individually negotiated (to prevent the UTCCR 1999 excluding the provisions).
  • The adjudication provisions stated that where the parties did not agree on an adjudicator, one would be appointed by Mr Picardi's professional body (RIBA).

In contracts with a residential occupier (to which the HGCRA 1996 does not apply) adjudication provisions may be unenforceable if they are not fairly and properly brought to the client's attention and individually negotiated.

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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