Branlow Limited v Den-Master Demolition Limited
Thursday, 26 February 2004
Key terms: Decree de plano - dismissal - absolvitor - contract in writing - section 107 - JCT - verbal contract - partly reduced to writing - variations - lump sum - jurisdictional threshold
Branlow Limited sought to enforce an adjudicator’s decision obtained against Dem-Master Demolition Limited. Dem-Master claimed that there was no construction contract in writing in accordance with Section 107 of the Act. The parties entered into a contract by an exchange of letters dated 1 and 2 August 2002. The Judge held that these documents contained the important contractual obligations and constituted a contract. The question was whether those letters could be regarded as a “construction contract” for the purposes of section 107 of the Act.
Dem-Master argued that the letters captured a prior verbal discussion, and that the parties would have entered into a JCT Contract. The letters did not contain the specification of the works that had been discussed before production of the letters. They therefore argue that there was a verbal contract prior to the letters that had only been partially reduced to writing. In addition, Branlow were claiming for variations, and the letters did not deal with variations, as it was simply a lump sum contract for the sum of £150,000. They therefore argued that the variations were separate contracts.
The sheriff referred to the Court of Appeal case of RJT Consulting Engineers Limited v DM Engineering (Northern Ireland) Limited (2002) DLR 217 and recognised the strict requirements for a contract in writing. He concluded that as an agreement in writing had been established by the exchange of letters dated 1 and 2 August then the jurisdictional threshold for an adjudicator had been satisfied. In respect of variations, he concluded that the Adjudicator had jurisdiction to decide that the claims were validly accepted under the contract, and were therefore within the Adjudicator’s jurisdiction. As a result he enforced the decision.
Dem-Master argued that the letters captured a prior verbal discussion, and that the parties would have entered into a JCT Contract. The letters did not contain the specification of the works that had been discussed before production of the letters. They therefore argue that there was a verbal contract prior to the letters that had only been partially reduced to writing. In addition, Branlow were claiming for variations, and the letters did not deal with variations, as it was simply a lump sum contract for the sum of £150,000. They therefore argued that the variations were separate contracts.
The sheriff referred to the Court of Appeal case of RJT Consulting Engineers Limited v DM Engineering (Northern Ireland) Limited (2002) DLR 217 and recognised the strict requirements for a contract in writing. He concluded that as an agreement in writing had been established by the exchange of letters dated 1 and 2 August then the jurisdictional threshold for an adjudicator had been satisfied. In respect of variations, he concluded that the Adjudicator had jurisdiction to decide that the claims were validly accepted under the contract, and were therefore within the Adjudicator’s jurisdiction. As a result he enforced the decision.