Fleming Buildings Limited v Mrs Jane Forrest or Hives and Mr William Forrest
Case reference:
[2008] CSOH 103
Tuesday, 15 July 2008
Key terms: Identity of the parties to a contract - Jurisdiction - Natural Justice
In 2005, the Defender engaged the Pursuer to demolish their existing house in Bothwell, Scotland and to rebuild a new one on the same site. The Defenders' chartered surveyor wrote to the Pursuer stating that they had been authorised by the client "KWF Holmes" to accept their tender for the works. However, throughout the course of the works, the client was generally referred to as "Mr & Mrs Forrest" . A dispute arose in relation to payment and the Pursuer commenced adjudication.
During the course of the adjudication proceedings, the Defender's solicitors submitted that there was no contract between the parties and accordingly, the adjudicator did not have jurisdiction and should resign. The adjudicator held that the parties to the contract were the Pursuer and the Defenders, and accordingly found for the Pursuer in the sum of £112,598.75. The defenders made no payment to the pursuers in respect of these sums and proceedings were commenced in October 2007.
At a preliminary proof the court considered: (1) whether or not the Adjudicator's decision is ultra vires; (2) whether or not the Defenders may plead retention and set-off on the basis of an unspecified claim for damages; (3) the question "if no notice of intention to withhold was given, does that preclude the right of retention or set off by the defenders?"; and (4) whether the adjudicator's decision should be reduced as being contrary to the rules of natural justice.
As both parties laid great importance on the question of credibility and reliability of various witnesses, the court considered evidence from four witnesses on behalf of the Pursuer and four on behalf of the Defenders in order to determine whether there was a contract and, if so, between whom.
Lord Menzies was more convinced by the Pursuer's evidence and submissions, and accordingly held that the adjudicator had jurisdiction in this matter. Furthermore, as the F10 form sent to the Health & Safety Executive had scored out the provision for a planning supervision, and as such no one was appointed, this was concrete evidence that the clients were intended to be domestic clients. Finally, the Judge held that there was nothing to suggest that the adjudicator's decision was contrary to the rules of natural justice and that there are no grounds on which the defenders may seek to retain or set-off sums against the adjudicator's decision.
During the course of the adjudication proceedings, the Defender's solicitors submitted that there was no contract between the parties and accordingly, the adjudicator did not have jurisdiction and should resign. The adjudicator held that the parties to the contract were the Pursuer and the Defenders, and accordingly found for the Pursuer in the sum of £112,598.75. The defenders made no payment to the pursuers in respect of these sums and proceedings were commenced in October 2007.
At a preliminary proof the court considered: (1) whether or not the Adjudicator's decision is ultra vires; (2) whether or not the Defenders may plead retention and set-off on the basis of an unspecified claim for damages; (3) the question "if no notice of intention to withhold was given, does that preclude the right of retention or set off by the defenders?"; and (4) whether the adjudicator's decision should be reduced as being contrary to the rules of natural justice.
As both parties laid great importance on the question of credibility and reliability of various witnesses, the court considered evidence from four witnesses on behalf of the Pursuer and four on behalf of the Defenders in order to determine whether there was a contract and, if so, between whom.
Lord Menzies was more convinced by the Pursuer's evidence and submissions, and accordingly held that the adjudicator had jurisdiction in this matter. Furthermore, as the F10 form sent to the Health & Safety Executive had scored out the provision for a planning supervision, and as such no one was appointed, this was concrete evidence that the clients were intended to be domestic clients. Finally, the Judge held that there was nothing to suggest that the adjudicator's decision was contrary to the rules of natural justice and that there are no grounds on which the defenders may seek to retain or set-off sums against the adjudicator's decision.