Joseph Finney Plc v Gordon & Gary Vickers [2001] HT 00/454

This summary was provided by CMS Cameron McKenna LLP.

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

An exchange of mutual promises is good consideration. The promise not to adjudicate is a promise of value, and could bind the parties

HHJ David Wilcox

7 March 2001

F and V executed a building contract incorporating the terms of the standard form JCT 1980 edition as amended private with quantities. The works were the provision of further accommodation at V's hotel in Chester.

A dispute arose between the parties relating to F's application for payment number 13 and the subsequent valuation and Architect's certificate. On 8 November 2000 the Architect certified that £347k was due. On 21 November V gave notice that they were withholding £347k on account of 14 weeks delay.

F wrote to V on 22 November disputing the deduction and said that adjudication proceedings, as provided for in the contract, would be started unless payment was forthcoming. V sent a fax to F on 24 November confirming that the certificate would be paid as per invoice. F then confirmed that it would not proceed to appoint an adjudicator. Subsequent correspondence confirmed the date for payment as 29 November. However, on 27 November V refused to pay and said that no agreement to pay had been reached. F commenced Court proceedings for V's alleged breach of compromise. F applied for summary judgment under CPR Part 24 and V applied for a stay of proceedings under s9 Arbitration Act 1996.

Having held that a stay of proceedings was inappropriate, as the parties had agreed in their contract that legal proceedings rather than arbitration would be used to resolve disputes, the Court considered the Part 24 application.

The Court held that the message of F's letter to V was clear. If payment was not forthcoming then proceedings would be started. The correspondence contained a clear promise by V to pay in accordance with the invoice and accordingly F promised not to proceed with an adjudication to enforce his rights under the contract. There was no ambiguity in that agreement. By V's letter of 27 November, V repudiated the compromise and F was no longer bound by their promise not to adjudicate. In the circumstances it was held that it would offend common sense not to construe V's letters as promises to pay on 29 November and F was therefore awarded summary judgment.

An exchange of mutual promises is good consideration. The promise not to adjudicate is a promise of value, and could bind the parties.

This summary was provided by CMS Cameron McKenna LLP.

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

Click here to read full-screen | Click here to print the case