In the following case, the court had to consider the nature of the parties relationship and in particular whether the parties had entered into a construction contract within the meaning of section 107 of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act).
Rok Building Limited v Bestwood Carpentry [2010] EWHC 1409 (TCC)
The main contractor approached Bestwood Carpentry to provide joiners on a labour only basis initially to help with the existing sub-contractor with joinery works on a project known as Oriental City, London. A number of other instructions came from the contractor over the following month and the contractor subsequently invited Bestwood to provide rates and prices on a measured basis.
In broad terms, Bestwood carried out the work that was asked of it. The issue between the parties was the basis on which the further measured work was carried out. When Bestwood commenced adjudication proceedings seeking the recovery of unpaid sums the contractor objected on the basis that there was no agreement in writing within the meaning of section 107 of the Construction Act
The parties agreed that the court should be asked to make a ruling on the jurisdiction issues only before the adjudication proceeded to any conclusion.
Was there a construction contract?
The court confirmed that all of the terms of a construction contract between the parties must be in or evidenced in writing (RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) [2002] EWCA Civ 270).
On the facts, the court held that although there was a contract between them, there were terms which were orally agreed which were not contained in or evidenced by writing. As a result, there was no construction contract and that the adjudicator had no jurisdiction to proceed as adjudicator.
Editors' comments
The case is interesting because of the "sensible" decision of the parties to ask the court to decide whether there was a construction contract. In this way, the parties avoided the cost of proceeding with the adjudication and the subsequent possibility that the losing party would challenge the adjudicator's decision on the basis of lack of jurisdiction.
View: Rok Building Limited v Bestwood Carpentry [2010] EWHC 1409 (TCC)
This article was first published in the Norton Rose Construction and infrastructure updater July 2010
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