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FIRST PRINCIPLES

LEGAL

Since the Court of Appeal's decision in Devonport v Carillion at the end of last year, the prospects of resisting enforcement of adjudicators' decisions have looked bleak, writes Sue Lindsey.

But, bucking the trend, over the summer H H J Havery QC declined to enforce an adjudicator's decision that Brookdale Healthcare paid Redworth Construction some £200,000.

The decision reminds us to start from first principles. The Housing Grants, Construction and Regeneration Act 1996 only makes adjudication compulsory in certain circumstances. The judge decided that the Brookdale/ Redworth agreement did not fall within Section 107 of the Act, that adjudication only applies to contracts in writing.

As a result the adjudicator (who had concluded it was a contract in writing, and had continued to give a decision) had no jurisdiction and his decision was of no effect.

The judge concluded on the evidence that a passing reference to a JCT contract in a document outlining the works was not enough to incorporate the standard form. At most it showed a mere intention on the part of the parties to enter into a JCT form.

As there was no JCT form, the judge had to consider the extent of the terms that were agreed in writing.

The key guidance on what is and is not a contract in writing for the purposes of Section 107 of the Act is the Court of Appeal's decision in RJT Consulting Engineers Ltd v DM Engineering. In that case the majority of the court decided that all the agreement, apart from trivial terms, has to be in writing. The third judge held that only terms material to the issues in dispute had to be in writing. As the Brookdale/Redworth agreement did not record the completion date, and that was relevant to the claim before the adjudicator, the judge concluded that applying either of the tests in the RJT case it was not a contract in writing.

It seems that finding such a 'threshold' point is now more likely to defeat an enforcement action than trying to open up and complain about the adjudication process itself.

But the prudent respondent should spot and raise the point early, then participate in the adjudication having reserved their position on the objection.

Furthermore, they should consider the point thoroughly.

Redworth, in arguing before the adjudicator that there was a contract in writing, had relied only on the document with the reference to the JCT terms.

Before the court, Redworth wanted to rely on more documents. The judge would not allow it. He decided Redworth had opted to put its case as it had before the adjudicator with a view to getting him to decide in its favour, both as to the contract in writing point and on the substantive claim. The adjudicator decided for Redworth, and it had had the benefit of that. So having elected to pursue the point in the way it had, it could not change tack before the court.

So anyone facing an adjudication should start at the beginning and look at Sections 104 to 107 of the Act. Is it a construction contract? Is it in writing? Is the respondent a residential occupier? Then, if there is a threshold point, make it out clearly and thoroughly in the adjudication.

Sue Lindsey is a barrister at Crown Office Chambers in London. Visit www.

crownofficechambers. com

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