Mott Macdonald Ltd v London & Regional Properties Ltd

A construction contract may be enforceable without being sufficiently documented to support statutory adjudication. Under section 107 of the Housing Grants Construction and Regeneration Act, the contract giving rise to the dispute must itself satisfy the statutory requirements for writing. A referring party cannot establish jurisdiction merely by characterising the dispute as arising under a written letter of intent where the actual contract has subsequently been amended by oral agreement or conduct. An adjudicator cannot determine his own jurisdiction conclusively unless appointed ad hoc for that purpose. Further, an adjudicator must act impartially and deliver the decision as soon as possible after reaching it. A lien on the decision for unpaid fees is impermissible. Failure to comply with the mandatory delivery requirements renders the decision unenforceable and probably a nullity.

Mott MacDonald Limited sought summary judgment to enforce an adjudicator’s decision requiring London & Regional Properties Limited to pay professional fees and most of the adjudicator’s fees. The adjudication concerned services provided under a long-running letter of intent and later contractual arrangements for infrastructure works.

LRP resisted enforcement on jurisdictional grounds, arguing that the actual agreement relied upon was not sufficiently in writing under section 107 of the Housing Grants Construction and Regeneration Act. It also challenged the adjudicator’s conduct in withholding the decision until his fees were paid and in delaying delivery. The central issues were whether the adjudicator had jurisdiction and, alternatively, whether the decision was validly delivered.

1. Judgment for the defendant. The adjudicator’s decision was unenforceable on grounds of lack of jurisdiction, procedural irregularity, lack of impartiality and non-compliance with rule 19(3) of the Scheme.
2. The relevant contract was not the unamended letter of intent. The parties’ relationship had developed through successive extensions, changes to the scope of services and revised payment arrangements. The actual contract was partly written, partly evidenced in writing, partly oral and partly formed by conduct. It therefore did not satisfy section 107(2)(a) or section 107(2)(c) of the Housing Grants Construction and Regeneration Act.
3. The distinction between an agreement made in writing and an agreement evidenced in writing was material. As explained in RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] 1 WLR 2344, the agreement, rather than merely part of it, must be evidenced where section 107(2)(c) is relied upon.
4. Section 107(5) did not validate the adjudication. MM had not alleged that the agreement was otherwise than in writing, and LRP’s response did not admit the existence of such an agreement. LRP had consistently reserved its jurisdictional objection.
5. The adjudicator had no jurisdiction to make a binding determination of the section 107 issue. His decision that the letter of intent had been extended could not cure the defective appointment. There was no voluntary submission to jurisdiction or waiver by LRP.
6. Assuming jurisdiction existed, the adjudicator acted in breach of rules 12(a) and 19(3) of the Scheme by making payment of his fees a condition of releasing the decision. That condition created an appearance of partiality and improperly restricted prompt delivery.
7. The decision was reached on 8 December 2006, not when it was signed on 13 December. It was not delivered as soon as possible because it was withheld pending payment and sent only by post. The authorities including Bloor Construction (UK) Ltd v Bowmer & Kirland (London) Ltd [2000] BLR 314, Barnes & Elliott Ltd v Taylor Woodrow Holdings Ltd [2004] 1 BLR 111 and Cubitt Building & Interiors Ltd v Fleetglade Ltd [2006] EWHC 3413 supported mandatory, rapid delivery by the most effective available means.