Treasure & Son Limited v Martin Dawes

Case reference: 
[2007] EWHC 2420 (TCC)
Thursday, 25 October 2007

Key terms: 
Adjudication Enforcement - Written Contract - Oral Variation - Distinction between Contractual and Statutory Adjudication - Does the Adjudicator have to sign the Decision for it to be valid? - Stay of Execution

Martin Dawes engaged the claimant, Treasure & Son Limited, to carry out refurbishment and restoration works at Dinmore Manor, Hertfordshire. The Contract incorporated the JCT Standard Form of Prime Contract 1998 with Amendments I and II. The Adjudicator decided that Mr Dawes was to pay Treasure £1,018,821.12 + VAT, interest and the Adjudicator's fees and expenses.

Mr Dawes refused to pay on the basis that part of the Decision related to an oral variation and was therefore unenforceable, the Decision had not been signed, and therefore once again was not enforceable, and finally there should be a stay of execution given the financial position of Treasure.

Akenhead J. noted that the parties agreed that there was a written construction contract for the purposes of the HGCRA 1996. However, Dawes argued that there had been a variation to the Contract because after practical completion, Treasure remained on site and the parties orally agreed that the same terms would apply after practical completion, thus allowing for the architect to issue instructions, and for the contractor to make applications for payment etc. The Judge decided that this case was different to RJT Consulting Engineers Limited v DM Engineering (Northern Ireland) Limited [2002] BLR 217, as RJT was based upon a statutory adjudication, while this case was a contractual adjudication. He said at paragraph 31:
"In my Judgment, where there is a contractual agreement to adjudicate, as here, that adjudication process is not undermined, jurisdictionally or otherwise, by the fact (if it be the case) that the terms of the original contract (containing the adjudication clause) were orally varied. ... Essentially the parties will have agreed in a binding contract the dispute will be referable to adjudication."

Further, he was not satisfied that there had in any event been an oral variation to the Contract. The Contract was operated by both parties after practical completion in the same manner as before practical completion. There was no consideration for that change. In any event, the exchange of submissions between the parties for the purposes of the adjudication amounted to an agreement in writing. This was based upon Section 107(5) of the HGCRA. Importantly, Akenhead J. disagreed with HHJ Bowsher QC in Grovetec Limited v Capital Demolition Limited [2000] EWHC 139 (TCC), where HHJ Bowsher considered that it was permissible to rely upon the debate in Parliament (pursuant to Pepper v Hart [1993] AC 593) when construing Section 107(5). In Akenhead J's view, Section 107(5) was clear, and an exchange of written submissions in adjudication proceedings was sufficient for the requirement of an agreement in writing.

The second issue related to the "no signature" point. Akenhead's view was that an adjudicator was required to "reach his decision" (following HHJ LLoyd QC's approach in Barnes & Elliott Limited v Taylor Woodrow Holdings Limited & Anor [2004] BLR 111). As a result of signature, it was not necessary. It was only necessary for the Adjudicator to reach his decision.

Finally, he refused to grant a stay on the basis of financial impecuniosity.

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Tel: +44 (0)20 7421 1986