Allen Wilson Joinery Ltd v Privetgrange Construction Ltd

For section 107 of the Housing Grants, Construction and Regeneration Act 1996, all express contractual terms must be recorded in writing. Whether an orally agreed matter is trivial is an objective question assessed in the context of the particular contract and parties. The court must also determine whether the oral discussion was intended to create a binding obligation. Terms implied by law do not prevent an otherwise written construction contract from satisfying section 107. An adjudicator has no freestanding jurisdiction to award interest under paragraph 20(c) of the Scheme for Construction Contracts. Interest must be a properly referred matter in dispute, within the parties’ agreed scope, or necessarily connected with the dispute.

The claimant subcontractor sought summary judgment to enforce an adjudicator’s decision requiring the defendant main contractor to pay sums said to be due for staircase manufacture, delivery and installation. The defendant challenged enforcement, alleging that additional terms concerning design, completion dates and subcontracting had been agreed orally, so that the contract was outside section 107 of the Housing Grants, Construction and Regeneration Act 1996. It also challenged the adjudicator’s jurisdiction to award interest.

The court had to determine whether there were triable issues concerning the alleged oral terms and whether any part of the adjudicator’s decision could nevertheless be enforced.

1. Summary judgment. The claimant’s application was dismissed. The defendant was given leave to defend conditionally on paying £10,000 into court within 14 days.
2. Written contract. Applying and endorsing the principles in RJT Consulting Engineers Ltd v DN Engineering (Northern Ireland) Ltd [2002] BLR 217 and Trustees of the Stratfield Saye Estate v AHL Construction Ltd [2004] EWHC 3286 (TCC), all express terms of the construction contract must be recorded in writing for section 107 purposes. It is insufficient that only terms material to the adjudication are written down.
3. Whether an orally discussed matter is trivial must be assessed objectively by reference to the particular contract and parties. The court must also decide whether the discussion was intended to create a binding agreement, and whether a later written agreement superseded it.
4. Terms implied by operation of law, including terms implied by statute or to give business efficacy, do not prevent an otherwise written contract from falling within section 107. The court preferred the approach in Connex South Eastern Ltd v MJ Building Services Group PLC [2004] BLR 333. The alleged design and completion-date agreements raised factual issues. The alleged non-subcontracting term did not affect the written-contract question. The price issue was not a valid jurisdictional objection.
5. Interest. Applying Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2006] BLR 15, paragraph 20(c) of the Scheme for Construction Contracts conferred no freestanding power to award interest. The interest question had not been properly referred, agreed as within the adjudication, or shown to be necessarily connected with the dispute. The interest part of the adjudicator’s decision was therefore unenforceable, even if the underlying construction contract was ultimately found to satisfy section 107.
6. The costs of the summary judgment application and hearing were reserved.