Treasure & Son Ltd v Dawes

A contractual adjudication clause remains enforceable despite an alleged oral variation of the underlying construction contract, unless the contract expressly requires variations to be recorded or evidenced in writing. The adjudicator’s jurisdiction is determined by the dispute referred in the notice, and later documents ordinarily clarify rather than enlarge that dispute. An adjudicator’s decision need not be signed where the evidence establishes that it is the adjudicator’s decision and the contract requires only that the decision be reached and sent in writing. Enforcement will generally proceed summarily. A stay requires special circumstances, and evidence of probable inability to repay the judgment sum must be established; speculative concerns about the successful party’s finances are insufficient.

Treasure & Son Ltd sought summary judgment under CPR Part 24 to enforce an adjudicator’s decision requiring Martin Dawes to pay over £1 million, together with VAT, interest and adjudication costs. The underlying contract was a JCT Prime Cost Contract containing a contractual adjudication procedure.

Dawes challenged enforcement on three grounds: an alleged oral variation after practical completion, the adjudicator’s failure to sign the decision, and Treasure’s alleged inability to repay the judgment sum after the parties’ pending arbitration. The central issues were whether the alleged variation affected jurisdiction, whether signature was contractually required, and whether a stay of execution was justified.

1. Oral variation. The court rejected the jurisdictional challenge. Where the contract itself contains an agreement to adjudicate, an oral variation of other contractual terms does not undermine the adjudication agreement. That would differ from a case involving only the statutory right to adjudication under the Housing Grants, Construction and Regeneration Act 1996, where the statutory writing requirements are jurisdictional. The contract contained no term requiring variations to be recorded in writing.

2. On the evidence, Dawes had not established that any binding oral variation had occurred. The contractor remained obliged to complete the works, and the contract did not impose an obvious time limit on instructions issued by the architect. The claim for post-completion overheads was within the dispute referred to the adjudicator. The adjudicator therefore had jurisdiction to decide it, whether or not an oral variation existed.

3. The court accepted the claimant’s alternative submission concerning section 107(5) of the Housing Grants, Construction and Regeneration Act 1996. An exchange of written submissions in adjudication proceedings, followed by a response that did not deny the alleged oral agreement, could constitute an agreement in writing for the purposes of that provision. The judge expressly disagreed with the contrary view in Grovedeck Ltd v Capital Demolition Ltd, although the point was unnecessary to the outcome.

4. No signature. Clause 9A.5.3 required the adjudicator to reach a decision and send it in writing. It did not require signature. A signature may provide useful evidence of authorship, but no term requiring signature was necessary or reasonable to make the contractual procedure work. The unsigned decision was plainly the adjudicator’s own decision and was enforceable.

5. Stay of execution. Applying the principles summarised in Wimbledon Construction Co 2000 Ltd v Derek Vago, the court refused a stay. Treasure was not insolvent, had substantial trading history and net assets, and the evidence did not establish a probable inability to repay. The possibility that its directors might distribute reserves was speculative. Summary judgment was entered for £1,222,818.05, with the remaining interest issue left for further consideration.