Connex South Eastern Ltd -v- MJ Building Services Group plc

Case reference: 
[2004] EWHC 1518 (TCC)
Friday, 25 June 2004

Key terms: 
Part 8 - Declaration - “in writing” - Section 107 - Right to Adjudicate - Repudiation - Abuse of Process - Settlement

MJ Building Services Group Plc carried out work in connection with the installation of close circuit television systems for the Claimant. MJ had been invited to tender for work to 50 stations. They were given a verbal instruction to carry out the work, but a written order was not issued, nor was a written contract issued. On 20th September work was suspended. On 18th October 2000 it was agreed that work would proceed but that MJ would not claim compensation for the suspension. In February 2002 the scope of the work was considerably reduced. On 24th February 2004 MJ served a Notice of Adjudication in respect of Connex’s failure to make payment. The adjudication was stayed by consent pending the outcome of this hearing.

Connex sought the following declarations:
1. That there was no agreement as required by Section 107 of the Act;
2. MJ no longer had a right to adjudicate as it had been repudiated; and
3. MJ’s Notice of Adjudication was an abuse of process as the issues between the parties had been settled.

HHJ Havery QC held:

1. That Connex’s instruction to proceed with the work in the minutes of the meeting of 15th September 2000 constituted an acceptance of MJ’s tender. The minutes were in writing and were therefore sufficient evidence within Section 107 (4) of the Act;
2. It was well established that adjudication can occur after completion of the works. The right to adjudicate at any time survived repudiation as would an arbitration clause; and
3. The 11th February 2002 letter was not particularly clear and did not relate to an existing claim. It could not, therefore, amount to a settlement agreement. As a result MJ’s Notice of Adjudication was not an abusive process.

He therefore declined to make the declarations sought.

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