Redworth Construction Limited -v- Brookdale Healthcare Limited
Case reference:
[2006] EWHC 1994 (TCC)
Monday, 31 July 2006
Key terms: Enforcement of Decision of Adjudicator - Jurisdiction to consider the matters - Contract in writing to satisfy section 107 HGCRA - Principle of Election
Brookdale employed Redworth under a contract for the erection of four group homes and a day care centre. The contract between the parties was made on 21st November 2003. The initial negotiations and discussions between the parties commenced in early 2003. At the conclusion of the contract Redworth’s position was that Brookdale owed it monies in respect of the total contract price, including variations.
Redworth took the matter to adjudication for outstanding monies that it believed it was due under the JCT contract governing the project. The adjudicator found in favour of Redworth and ordered that Brookdale pay £210,576.67. Redworth then sought to enforce the adjudicators’ decision. Brookdale resisted the application on the basis that the parties had not entered into a JCT contract, and the adjudicator had no jurisdiction to decide the matter. His Honour Judge Harvey QC considered five issues, with the key issues being whether the contract included the JCT terms; and whether the contract was in writing within the meaning of Section 107 HGCRA.
The Court reviewed the correspondence and negotiation between the parties. In April 2003 a draft Employer’s Requirements was produced which stated that the “form of contract will be the JCT Standard Form of Building Contract with Contractor’s Design 1998” . The form was not attached to the document but specific clauses were referred to. The date of possession and completion were blank, and the liquidated and ascertained damages were described as being £20,000 per week. It was stated that the contract would be executed as a deed. There were several other meetings between the parties but no contract was ever executed. The key meeting was held on 21st November 2003 and the following terms were agreed between the parties: a revised contract price; the liquidated and ascertained damages; the time for payments following valuations; date for the start of works; period for the works and the completion date. The JCT terms were not discussed at this meeting.
A draft contract was provided on 16 July 2004 but it was accepted by both parties that this contained an incorrect contract price. The contract was not executed and it was never pursued.
His Honour Judge Harvey QC determined that the JCT terms were not part of the contract. He stated that as at the November 2003 meeting there was, at most, a mere intention to enter into a JCT contract that did not materialise. Neither party pursed the matter. The JCT contract was never signed, executed or orally agreed. The Referral Notice relied upon the JCT provisions relating to adjudication. As a result, the Adjudicator did not have any jurisdiction and the claim was dismissed.
Redworth took the matter to adjudication for outstanding monies that it believed it was due under the JCT contract governing the project. The adjudicator found in favour of Redworth and ordered that Brookdale pay £210,576.67. Redworth then sought to enforce the adjudicators’ decision. Brookdale resisted the application on the basis that the parties had not entered into a JCT contract, and the adjudicator had no jurisdiction to decide the matter. His Honour Judge Harvey QC considered five issues, with the key issues being whether the contract included the JCT terms; and whether the contract was in writing within the meaning of Section 107 HGCRA.
The Court reviewed the correspondence and negotiation between the parties. In April 2003 a draft Employer’s Requirements was produced which stated that the “form of contract will be the JCT Standard Form of Building Contract with Contractor’s Design 1998” . The form was not attached to the document but specific clauses were referred to. The date of possession and completion were blank, and the liquidated and ascertained damages were described as being £20,000 per week. It was stated that the contract would be executed as a deed. There were several other meetings between the parties but no contract was ever executed. The key meeting was held on 21st November 2003 and the following terms were agreed between the parties: a revised contract price; the liquidated and ascertained damages; the time for payments following valuations; date for the start of works; period for the works and the completion date. The JCT terms were not discussed at this meeting.
A draft contract was provided on 16 July 2004 but it was accepted by both parties that this contained an incorrect contract price. The contract was not executed and it was never pursued.
His Honour Judge Harvey QC determined that the JCT terms were not part of the contract. He stated that as at the November 2003 meeting there was, at most, a mere intention to enter into a JCT contract that did not materialise. Neither party pursed the matter. The JCT contract was never signed, executed or orally agreed. The Referral Notice relied upon the JCT provisions relating to adjudication. As a result, the Adjudicator did not have any jurisdiction and the claim was dismissed.