Trustees of the Stratfield Saye Estate -v- AHL Construction Ltd
Case reference:
[2004] EWHC 3286 (TCC)
Monday, 6 December 2004
Key terms: Cost based contract - evidenced in writing - Section 107(4)
The contractor, AHL Construction Limited had brought three adjudications against the trustees. The adjudicator had found in favour of the claimant contractor. Trustees of the Stratfield Saye Estate argued that there was no legal foundation for the claims. He sought two declarations. First, that there was no construction contract in writing and second, the adjudicator had no jurisdiction.
Mr Justice Jackson concluded that there was clearly a contract between the parties. The more difficult question was whether it was “in writing” for the purposes of the HGCRA. The contract came in to being on 8 September 2003. At that time, the price had not been agreed. The scope of the works were set out on only three drawings and in section 2 of the minutes. Importantly, the work related to a derelict property. His Honour concluded that the work could only be described in general terms because of the nature of the derelict building and that the scope of works set out in the drawings and in the minutes were sufficient. In respect of the price, he concluded that it was a “cost plus” contract.
He referred to the Court of Appeal case of RJT Consulting Engineers v DM Engineering (Northern Ireland) Limited [2002] BLR 217. He considered that Auld LJ agreed in the result but not in the reasoning. However, Auld LJ’s reasoning was not part of the ratio of RJT. Mr Justice Jackson concluded that:
Mr Justice Jackson concluded that there was clearly a contract between the parties. The more difficult question was whether it was “in writing” for the purposes of the HGCRA. The contract came in to being on 8 September 2003. At that time, the price had not been agreed. The scope of the works were set out on only three drawings and in section 2 of the minutes. Importantly, the work related to a derelict property. His Honour concluded that the work could only be described in general terms because of the nature of the derelict building and that the scope of works set out in the drawings and in the minutes were sufficient. In respect of the price, he concluded that it was a “cost plus” contract.
He referred to the Court of Appeal case of RJT Consulting Engineers v DM Engineering (Northern Ireland) Limited [2002] BLR 217. He considered that Auld LJ agreed in the result but not in the reasoning. However, Auld LJ’s reasoning was not part of the ratio of RJT. Mr Justice Jackson concluded that:
“The principle of law which I derived from the majority judgements in RJT is this: An agreement is only evidenced in writing for the purposes of Section 107, sub sections (2), (3) and (4), if all the expressed terms of that agreement are recorded in writing. It is not sufficient to show that all terms material to the issues under adjudication have been recorded in writing.”
He concluded that the parties had met this strict test in this case. The necessary expressed terms had been agreed in writing. The specification, slim though it was, was set out in writing and the cost plus basis of the agreement was also recorded in writing. Further, the successive three adjudications entitled AHL to rely upon the written submissions in the first two adjudications to record the agreement between the parties for the purposes of the HGCRA. He therefore enforced the adjudicator’s decision.