Bracken v Billinghurst [2003] EWHC 1333 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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A sum tendered by a third party, in full and final settlement of an amount awarded by an adjudicator can, if accepted, prevent the party accepting the offer enforcing the adjudicator's award against the original contracting party.

HHJ Wilcox, Technology and Construction Court

10 June 2003

Bracken entered into a building contract, using the JCT Minor Works form, 1998 edition. The Contractor was described as "Billinghurst of Advance Building Technology Ltd." A dispute arose as to the cost of additional works. The Contractor left site until Bracken agreed to pay for these. Bracken determined the Contract and referred the dispute to adjudication.

The adjudicator had to decide the identity of the Contractor. Billinghurst argued that it was Advance Building Technology. It appeared that the majority of correspondence had been between Bracken, the Architect and Advance Building Technology. Nevertheless, the adjudicator found that the Contract was entered into by Billinghurst personally. This was a decision within the adjudicator's jurisdiction.

The adjudicator awarded Bracken £9,100. A second adjudication then took place where Bracken sought the cost of completing the works from Billinghurst. Billinghurst argued that Advance Building Technology was the proper responding party. The second adjudicator decided he was bound by the decision of the first adjudicator on this issue and awarded Bracken £31,250. Bracken made an application for summary judgment in respect of both awards plus interest.

Billinghurst argued that there had been an agreement to compromise the claims. Bracken had written to Billinghurst offering to drop the whole case on receipt of payment of £6,000. Billinghurst's solicitors replied, making it clear that their client was Advance Building Technology (represented by Billinghurst). They sent a cheque for £5,000 in full and final settlement of all matters between Bracken, Billinghurst and Advance Building Technology. The letter provided that this offer would be deemed to be accepted if the cheque was presented to the bank.

Two weeks later, Bracken presented the cheque for payment. Shortly after that, Bracken wrote to Billinghurst withdrawing previous offers of settlement and stating he would pursue the full amounts awarded by the adjudicators.

The Court held that the letter written by the solicitors was only capable of one construction. It was a counter offer, made by a third party, and the presentation of the cheque constituted the clearest acceptance of that counter offer. It did not matter that the cheque was from Advance Building Technology. In the circumstances, Billinghurst had a complete defence to Bracken's claim. In the light of that, the Court did not think it appropriate to consider the second adjudicator's refusal to consider who were the proper parties to the contract.

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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