Estor Ltd v Multifit (UK) Ltd

On an application to enforce an adjudicator’s decision, a jurisdictional challenge dependent on disputed facts will defeat summary judgment if it has a realistic prospect of success. The court should not resolve credibility issues summarily. Where the identity of the contracting party is disputed, oral evidence may be required, and the written-contract requirements of the Housing Grants and Regeneration Act 1996 do not exclude extrinsic evidence used to resolve ambiguity. A construction contract remains a contract in writing despite implied terms, provided the express terms are evidenced in writing. An adjudicator’s decision on fees is within jurisdiction where the adjudicator has power to allocate fees. If a discrete part were jurisdictionally invalid, the remaining decision could ordinarily be severed and enforced.

Multifit carried out fitting-out works after its original contracting party, Hub Design Ltd, encountered financial and operational difficulties. Multifit later adjudicated against Estor Ltd, claiming that Estor was the contracting party. The adjudicator found that a contract existed between Estor and Multifit, awarded Multifit money, and allocated adjudication fees.

Estor sought declarations that there was no contract between the parties and that the adjudicator’s decision was unenforceable. Multifit applied for summary judgment to enforce the award. The principal issue was whether Estor had a realistic prospect of establishing that it was not the contracting party. Further issues concerned the written-contract requirement under section 107 of the Housing Grants and Regeneration Act 1996, incorporation of terms, and the adjudicator’s treatment of fees.

1. Summary judgment. The court applied the requirement that a jurisdictional objection must be properly arguable and have a realistic prospect of success. Although courts approach adjudication enforcement challenges cautiously, that caution does not justify deciding disputed factual issues summarily.
2. There was, just, a realistic prospect that Estor could establish that it had not contracted with Multifit. Mr Warner’s evidence was not so incredible that it could be dismissed without oral evidence. The credit-reference documentation and evidence from Multifit’s representatives pointed the other way. The identity of the contracting party therefore required a trial.
3. The contract was primarily evidenced by the emails of 20 and 23 October 2008 and their attachments. The Housing Grants and Regeneration Act 1996 requires the express terms of a construction contract to be in writing, but implied terms do not prevent a contract from qualifying. Extrinsic oral evidence may resolve ambiguity about the contracting party, just as the factual matrix need not itself be recorded in writing.
4. The adjudicator’s possible inclusion of additional documents did not deprive him of jurisdiction. Once jurisdiction existed under a written construction contract, an error in identifying further contractual documents did not undermine that jurisdiction. The alleged novation was unsupported by evidence and had properly been abandoned.
5. The adjudicator had jurisdiction to decide responsibility for his fees. His allocation of some overlapping work from the abortive adjudication was an exercise of that discretion, not a jurisdictional error. Even if part of the fee allocation had exceeded jurisdiction, the identifiable sum could have been severed without invalidating the remainder.
6. Estor was given leave to defend only on the identity-of-contracting-party issue, conditional on payment of £35,000 into court by 28 August 2009. If payment was not made, judgment would be entered for Multifit. Costs were in the cause.