Redworth Construction Ltd v Brookdale Healthcare Ltd

A construction contract falls within the statutory adjudication regime only if the agreement, including terms material to the dispute, is evidenced in writing. An intention to use standard-form conditions does not incorporate them where they were neither discussed nor executed. A party which secured an adjudicator’s decision by advancing a particular case may be precluded by election from advancing an inconsistent case during enforcement proceedings, especially where it obtained a benefit from the earlier position. A dispute may exist despite a party’s willingness to negotiate and despite the absence of a formal application for an extension of time.

Redworth Construction Ltd sought to enforce an adjudicator’s decision requiring Brookdale Healthcare Ltd to pay £210,576.67 under a contract for construction works. Brookdale challenged the adjudicator’s jurisdiction, arguing that the parties had not entered into a contract incorporating the JCT Standard Form of Building Contract with Contractor’s Design 1998 and that the agreement was not in writing for the purposes of section 107 of the Housing Grants, Construction and Regeneration Act 1996.

The court also considered whether Redworth could rely on documents not relied upon in the adjudication, whether Brookdale was the contracting party, and whether a dispute existed.

1. The claim was dismissed. The parties made an oral agreement on 21 November 2003, but the JCT terms were not incorporated. The documents referring to those terms recorded no more than an unimplemented intention to enter into a formal JCT contract. The JCT form was never discussed, signed or executed as a deed, and the parties’ agreement was treated as informal.
2. Redworth could not rely in the enforcement proceedings on matters which it had not relied upon before the adjudicator. The principle of election, expressed in Banque des Marchands de Moscou (Koupetschesky) v Kindersley [1951] 1 Ch 112, prevented Redworth from approbating and reprobating its earlier case. Redworth had obtained the benefit of the adjudicator’s decision by advancing that case.
3. The agreement was not a contract in writing within section 107 of the Housing Grants, Construction and Regeneration Act 1996. The documents did not record the date of possession, the contract period or the completion date. Those matters, particularly the completion date, were material to the adjudicated claim concerning delay damages. Applying the reasoning discussed in RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270, the agreement therefore did not satisfy the statutory requirement.
4. Because the contract was not a contract in writing, Part II of the Housing Grants, Construction and Regeneration Act 1996 did not apply and the adjudicator had no jurisdiction. It was unnecessary to decide whether an independently incorporated clause 39A adjudication provision would avoid section 107 or whether section 13(1) of the Unfair Contract Terms Act 1977 would apply.
5. Brookdale was the correct contracting party. The evidence did not establish a novation to Signia Developments Ltd. A dispute also existed when the adjudication was commenced: the parties disagreed about delay, completion dates and deductions for damages. An expressed willingness to reach an amicable settlement did not negate the existence of that dispute.