In September 2009, Glendalough Associated SA (“Glendalough”) invited Harris Calnan Construction Co Ltd (“HCCL”) to tender for the construction of a residential development with studios in North London. HCL submitted a tender (which was later revised), and by a letter of intent dated 24 February 2010, Glendalough instructed HCCL to proceed with the works, albeit a formal contract was never entered into.

On 1 July 2013, Glendalough’s solicitors issued a Withholding Notice, alleging HCCL was 64 weeks in delay and owed liquidated damages in the sum of £350,000. HCCL referred the dispute to adjudication seeking, amongst other things, a declaration that Glendalough was not entitled to deduct liquidated damages. In its Referral dated 23 August 2013, HCCL did not rely on any particular terms of the contract, stating in wide terms that “[b]y an agreement [Glendalough] employed [HCCL] to carry out the construction of a Residential Block…”, i.e. the letter of intent.

In correspondence, Glenadlough challenged the adjudicator's jurisdiction, based on an alleged breach of paragraph 7(2) of the Scheme. Paragraph 7(2) requires the referring party to provide copies of the contract or extracts and other documents with the Referral, and stated generally that its “rights remain reserved”.

Before the adjudicator’s decision was issued, Glendalough applied to the Court under CPR Part 8 for a declaration that the adjudicator had no jurisdiction and the decision would be unenforceable. Glendalough alleged that the contract relied on by HCCL in its Surrejoinder did not comply with section 107 of the HGCRA 1996, i.e. that HCCL did not assert explicitly that the contract relied on was one “otherwise than in writing” so as to engage section 107(5) of the HGCRA 1996.

The Judge declined to grant the declaratory relief sought and found that HCCL’s description of the contract in the Referral engaged section 107(5) of the HGCRA 1996 noting that the absence of any date of the alleged contract or reference to writing by HCCL suggested that what was being alleged was a contract otherwise than in writing. As Glendalough did not deny the existence of an agreement in writing in the adjudication, it was no longer open to it to contend otherwise.

Glendalough also submitted that on HCCL’s case the works were carried out pursuant to the letter of intent. To comply with section 107 of the HGCRA, the letter of intent must record all relevant agreed terms, citing Ward LJ’s decision in RJT Consulting Engineers v DM Engineering v DM Engineering Ltd [2002] and Coulson J in Hart Investments Ltd v Fidler and Another [2006]. The Judge agreed with Glendalough but went on to make a provisional finding that the four essential terms (the parties, scope of work, price and time) were all specified in the letter of intent and satisfied the requirements of a construction contract.