Lead Technical Services Ltd v CMS Medical Ltd

Part II of the Housing Grants Construction and Regeneration Act 1996 provides an expeditious interim adjudication scheme. Courts should protect that purpose and adopt a rigorous approach to challenges against adjudication decisions. That policy does not justify summary enforcement where there is a real prospect, supported by cogent grounds, that the adjudicator lacked jurisdiction. A signed deed may retain legal force despite incomplete service descriptions or unquantified fees where surrounding documents provide an arguable contractual explanation. An alleged oral fee cap may also be decisive: if it was not agreed by reference to written terms, the statutory writing requirement is not met. A judge must engage with material evidence supporting these issues and give adequate reasons before granting summary judgment.

Lead Technical Services Ltd sought summary judgment to enforce an adjudicator’s fee award under Part II of the Housing Grants Construction and Regeneration Act 1996. CMS Medical Ltd challenged jurisdiction, contending that a signed Deed of Appointment had replaced the earlier agreement and required appointment by the Technical and Construction Solicitors’ Association rather than the ICE. CMS alternatively alleged an oral agreement capping fees at £20,000, which would mean that no agreement in writing existed under section 107.

HHJ Grenfell enforced the adjudication and dismissed the counterclaim summarily. The central issue was whether the evidence disclosed a real prospect that the adjudicator had acted without jurisdiction.

Appeal allowed. Lord Justice Moses gave the leading judgment, with Lord Justices Rix and Buxton agreeing.

1. Part II of the Housing Grants Construction and Regeneration Act 1996 was designed to provide a speedy interim solution to construction disputes and meet legitimate cashflow requirements. The court endorsed the rigorous approach to adjudication appeals reflected in Carillion Construction Limited v Devonport Royal Dockyard [2005] EWCA Civ 1358. That policy did not prevent the court intervening where there was a real prospect, based on cogent grounds, that the adjudicator had acted without jurisdiction.
2. The evidence concerning the Deed of Appointment gave CMS a real prospect of proving that the deed governed the parties’ agreement. The email correspondence, schedules of services and collateral warranty provided an explanation for the incomplete descriptions in the deed. The omission of a precise fee figure did not necessarily deprive the deed of legal force, as supported by Pao On & Others v Lau Yiu Long [1980] Appeal Cases page 614. If the deed governed, the adjudicator had been appointed by the wrong body and lacked jurisdiction.
3. The alleged oral fee cap was also a jurisdictional issue. The evidence included LTS’s own letter, a contractor’s witness statement, the invoices and the later increase in fees. The judge had not grappled with that evidence and had dismissed the issue in general terms. If the cap had been agreed orally without reference to written terms, section 107(3) meant that the statutory writing requirement was not satisfied and the adjudicator lacked jurisdiction.
4. Summary enforcement was therefore inappropriate. The case was a rare instance in which the evidence justified refusing to enforce the adjudicator’s decision summarily. Order: appeal allowed.

• Court of Appeal (Civil Division): allowed CMS Medical Ltd’s appeal.
• High Court of Justice, Queen’s Bench Division, Leeds District Registry: HHJ Grenfell granted summary judgment for Lead Technical Services Ltd on 17 March 2006, enforcing the adjudicator’s award and dismissing the counterclaim summarily.