Hatmet Ltd v Herbert (t/a LMS Lift Consultants)

For the purposes of section 107 of the Housing Grants, Construction and Regeneration Act 1996, an agreement may be sufficiently made or evidenced in writing even where the written documents are simple. They need not set out every matter concerning methodology or design where the scope of work, price and timing can be identified. Subsequent written communications may establish certainty as to varied work. Where the contract leaves the price for that varied work undetermined, a reasonable-charge mechanism may apply. Summary judgment should be refused where the evidence gives the claimant a real prospect of establishing that a construction contract existed in writing.

The claimant sought to enforce an adjudicator’s decision requiring the defendant to pay approximately £18,600 plus VAT and interest. The defendant applied for summary judgment under CPR Part 24, contending that the adjudicator lacked jurisdiction because there was no construction contract complying with section 107 of the Housing Grants, Construction and Regeneration Act 1996.

The dispute arose from a purchase order for the supply and fitting of ceilings to 18 lift cars. The parties’ documents included a quotation, a purchase order, a sketch, drawings and later communications about revised work. The central issue was whether those written materials amounted to an agreement made by exchange of communications in writing, or at least evidenced the agreement in writing.

1. Application dismissed. The defendant had not shown that the claimant had no real prospect of establishing that the adjudicator had jurisdiction. There was no other issue concerning agency or principal status before the court.
2. Under section 107.2(b) and (c) of the Housing Grants, Construction and Regeneration Act 1996, the written materials sufficiently established a construction agreement. The claimant’s evidence, supported by the later reference to the sketch, showed that a written scope of work existed. The purchase order identified the supply and fitting of ceilings to 18 lifts, the price of £1,005 per lift and the delivery period.
3. The documents did not need to state detailed terms about methodology or the design of installation methods. The obligation to fit the ceilings was sufficiently apparent from the purchase order. Any question about the meaning of that obligation could be resolved by construing the document.
4. The later approved drawing and the defendant’s instruction to proceed with the architect’s comments provided sufficient certainty about the varied work. There was, however, no sufficient agreement that the claimant’s proposed revised price would be payable. The court treated section 15 of the Sale of Goods Act 1992, as cited in the judgment, as supplying an appropriate reasonable-charge mechanism where the consideration for the service had not been determined.
5. The decision in RJT v DM Engineering was distinguishable because, in that case, significant orally agreed matters had not been recorded in writing. The earlier decision in Lloyds Project Ltd v Marlnick did not assist because the same evidential problem was absent here. It was unnecessary to decide whether the mock-up itself could constitute a record under section 107.6.