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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Mott Macdonald Ltd v London & Regional Properties Ltd  EWHC 1055 (TCC) (23 May 2007)
Cite as:  EWHC 1055 (TCC),  CILL 2481, 113 Con LR 33
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Technology and Construction Court
131 137 Fetter Lane,
B e f o r e :
| Mott MacDonald Limited
|- and -
|London & Regional Properties Limited
Mr Hamish Lal, Solicitor Advocate (Dundas & Wilson LLP, Northwest Wing, Bush House, Aldwych, London, WC2B 4EZ, DX 127 LDE, Hamish.Lal@dundas-wilson.com Ref: HL/EB.LON016.0243) for the defendant.
Hearing dates: 1 March 2007 followed by written submissions
Crown Copyright ©
Judge Thornton QC:
3.1 Factual Background
"Further to your letter of intent dated 28 September 1999, we are writing to notify you, on behalf of our joint client, London & Regional Properties, that the authority to proceed with your services is extended from 31 July 2000 to 31 October 2000. The extended authority for you to proceed as referred to above is made on the terms and conditions as are contained within the said letter of intent."
3.2 Contractual Basis of MM's Claim in the Adjudication
"It appears to me that LRP continued to instruct MM to carry out work beyond 31 October 2000 and MM continued to carry out the work required by LRP in the same manner as work was instructed and carried out between 1 January 2000 and 30 January 2000, a period not covered by either the LoI or LRP's subsequent letter of 23 August 2000. it is clear to me that MM continued to submit invoices beyond 31 October 2000 in respect of work carried out to LRP's instructions there is nothing to suggest to me that the parties were doing anything other than proceeding on the basis of the LoI on which they had been operating since September 1999. LRP have not adduced any evidence to suggest to me that the commercial relationship between MM and LRP was not being regulated by the LoI I am persuaded by MM's submissions that the parties continued to be regulated by the LoI both whilst work continued to be carried out by MM and paid for by LRP and whilst the parties continued to negotiate the terms of the contract which was intended to supersede the LoI and govern retrospectively the work carried out by MM under the LoI.. In view of the above, I am satisfied that the LoI did not lapse on 31 October 2000, the parties having waived that provision as asserted by MM."
3.3 Issue 1 Was there a contract at all?
3.4 Issue 2 - Was the contract a construction contract?
3.5 Issue 3 - Was the relevant contract "an agreement in writing"?
"(2) There is an agreement in writing-
a. if the agreement is made in writing (whether or not signed by the parties),
b. if the agreement is made by exchange of communications in writing; or
c. if the agreement is evidenced in writing.
(3) Where parties agree otherwise than in writing by reference to terms which are in writing, they make an agreement in writing.
(4) An agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement.
(5) An exchange of written submissions in adjudication proceedings, or in arbitral or legal proceedings in which the existence of the agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in his response constitutes as between those parties an agreement in writing to the effect alleged"
"19. On the point of construction of section 107 what has to be evidenced in writing is, literally, the agreement which means all of it, not part of it. A record of the agreement also suggests a complete agreement not a partial one. An exception to the generality of that construction is the instance falling within subsection (5) where the material or relevant parts alleged and not denied in the subsequent submissions in the adjudication proceedings are sufficient."
3.6 Issue 4 Was Section 107(5) of the HGCRA applicable?
"[LRP's] agents instructed MM to proceed with the services under a contractually binding letter of intent ".
"The adjudicator should give effect to the express, clear and unambiguous wording agreed in the letter of intent between LRP and MM. It follows that the LoI, therefore, as agreed by MM and LRP, came to an end on 31 October 2000."
(1) LRP had already made it clear in its initial letter to the adjudicator that he lacked jurisdiction on various grounds including the ground that MM's consultancy appointment, by whatever contract gave effect to that appointment, did not comply with the statutory requirements for writing provided for by the HGCRA. This reservation was clearly set out by LRP's reliance on the RJT case.
(2) The adjudicator had then ruled that he had jurisdiction because the only relevant agreement was that created by the letter of intent. He had not ruled on the section 107 issue, even though it had been raised by LRP and, by inference, the adjudicator must have erroneously concluded, or was to be taken as having erroneously concluded, that the relevant agreement was in writing.
(3) MM then served its response document relying on the agreement that the adjudicator had ruled was the agreement that founded his jurisdiction. LRP pleaded to this claim. This pleading did not withdraw LRP's reservation that the adjudicator lacked jurisdiction for lack of an agreement in writing. Indeed, the RJT case is again relied on in paragraphs 28 of that pleading. Thus, this response pleading was intended to respond to MM's pleading on the basis that since the adjudicator was going to proceed with the adjudication, it would attempt to defeat MM's pleaded case on its merits whilst maintaining that the adjudicator lacked jurisdiction on section 107 grounds.
3.7 Issue 5 - Did LRP voluntarily submit itself to the jurisdiction of the adjudicator?
3.8 Issue 6 - Is the decision of the adjudicator unreviewable because LRP is seeking to challenge errors made within his jurisdiction?
"In addition, following the Court of Appeal decision in RJT Consulting Engineers Ltd v DM Engineering Ltd, it is clear that the "consultancy appointment" [a reference to both contracts relied on by MM in the alternative] does not fall into the ambit of the Construction Act".
This objection was not spelt out in any detail but, in its context, it raised the jurisdictional objection that the adjudication was invalid because the relevant agreement and any of its core terms were neither in writing nor evidenced in writing and that any disputes under it were therefore not capable of giving rise to a statutory adjudication at all.
3.9 Conclusion Jurisdictional issues
(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.
(2) The contract shall- [enable, provide, require, allow or impose the matters set out]
(5) If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts shall apply.
(1) The Minister shall by regulations make a scheme ("the Scheme for Construction Contracts") containing provision about the matters referred to in the preceding provisions of this Part.
(4) Where any provisions of the Scheme for Construction Contracts apply by virtue of this Part in default of contractual provision agreed by the parties, they have effect as implied terms of the contract concerned.
2. The Scheme for Construction Contracts
Powers of the adjudicator
12. The adjudicator shall-
(a) act impartially in carrying out his duties and shall do so in accordance with any relevant terms of the contract
19 (1) The adjudicator shall reach his decision not later than-
(b) forty two days after the date of the referral notice if the referring party so consents,
(3) As soon as possible after he has reached a decision, the adjudicator shall deliver a copy of that decision to each of the parties to the contract.
22. If requested by one of the parties to the dispute, the adjudicator shall provide reasons for his decision.
"I request that all correspondence be initially sent by facsimile using the facsimile number detailed above. In addition I require that all correspondence be subsequently sent by first class post or delivered by hand to [my office] . I do not intend to take telephone calls form either of the parties or their representatives.
Prior to releasing my Decision I will require payment of my fees and expenses by the Referring Party."
"I have reached my Decision in this adjudication which now requires to undergo final typing and editing.
I am, therefore, on schedule to fully complete my Decision by tomorrow. In accordance with my letter to the Parties dated 1 November 2006, the Referring Party is to pay my fees and expenses prior to me releasing my Decision.
I require the Referring Party to make payment of my fee account in the amount of £9,781.88 inclusive of VAT."
(1) At the start of the business day, MM transferred to the adjudicator's account the sum stated as being payable in the adjudicator's letter of 7 December 2006.
(2) Sometime before 09.59, the adjudicator signed his decision.
(3) MM notified the adjudicator by fax received by the adjudicator at 09.59, that the sum of £9,781.88 had been transferred to his account "as per your instructions".
(4) The adjudicator posted the decision by first class post to the parties at 10.00 am by Recorded Next Day Delivery.
(5) The adjudicator, due to what he described as administrative error, did not send the decision by facsimile.
(6) The decision was received by both MM and LRP on 14 December 2006.
4.2 Issue 7 - Was the adjudicator entitled to impose a precondition on the delivery of his decision to the parties that his fees should first be paid by the referring party?
4.3 Issue 7 - When did the adjudicator reach his decision?
4.4 Issue 9 - Was a copy of the decision delivered to each of the parties as soon as it was reached?
4.5 Issue 10 - What is the effect on the validity and enforceability of the decision of the answers given to issues (7) - (9)?
(1) Adjudication is intended to be a rapid and informal means of resolving disputes on a temporary basis.
(2) To that end, the scheme rules, and all other adjudication rules, provide that the adjudicator must deliver his decision promptly.
(3) Given the rationale for adjudication in its present rapid form, the rules are to be construed as being mandatory. They are rules which the adjudicator is obliged to comply with.
(4) So as to comply with this rationale, the adjudicator should use the most rapid means of delivery that are reasonably available. This will ordinarily involve use of email or facsimile facilities.
(5) Any delay after the end of the relevant adjudication period in delivering the decision must be minimal and, if the decision has been reached before the end of that period, it should be delivered within that period.
(6) Any failure to comply with the requirement of prompt and rapid delivery will render the decision unenforceable and, probably, a nullity.
HH Judge Thornton QC
Note 1  1 WLR 2344, (CA). [Back] Note 2  BLR 314, TCC, Judge Toulmin QC [Back] Note 3  SCLR 526, Court of Session, Outer House, Lord Wheatley [Back] Note 4  1 BLR 111, TCC, Judge Lloyd QC [Back] Note 5  BLR 384, TCC [Back] Note 6  BLR 30, TCC, Judge Coulson QC [Back] Note 7  EWHC 3413, TCC, Judge Coulson QC [Back]
Note 1  1 WLR 2344, (CA). [Back]
Note 2  BLR 314, TCC, Judge Toulmin QC [Back]
Note 3  SCLR 526, Court of Session, Outer House, Lord Wheatley [Back]
Note 4  1 BLR 111, TCC, Judge Lloyd QC [Back]
Note 5  BLR 384, TCC [Back]
Note 6  BLR 30, TCC, Judge Coulson QC [Back]
Note 7  EWHC 3413, TCC, Judge Coulson QC [Back]