Rok Building Ltd v Bestwood Carpentry Ltd

For a construction contract to be “in writing” under the Housing Grants Construction and Regeneration Act 1996, all express terms must be recorded in, or evidenced by, writing. It is unnecessary for the contract price to be expressly stated. A price may instead be ascertainable through construction of the written agreement, an agreed formula, or an implied term arising by law. An oral agreement about an essential term, such as agreed rates, which is merely referred to but not evidenced in writing, prevents the contract from qualifying. A written confirmation of an oral agreement is insufficient. A contract for daywork labour does not, without more, confer a contractual right to require variations.

Rok engaged Bestwood to supply joiners at a construction project. The parties initially agreed orally that Bestwood would provide joiners on a daywork basis, with agreed rates, possible additional labour on notice, snagging instructions, and supervision by Rok. The arrangement was partly confirmed by a fax and subsequent site instruction.

An adjudication was commenced concerning payment disputes. Rok challenged the adjudicator’s jurisdiction, arguing that the relevant contract was not a construction contract in writing under section 107 of the Housing Grants Construction and Regeneration Act 1996. The central issues were whether the February arrangement contained all its express terms in writing and whether Rok’s standard subcontract documents had been incorporated.

1. The claim succeeded. The court declared that Mr Bingham had no jurisdiction to proceed with the adjudication concerning the dayworks contract.
2. Following RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd [2002] EWCA Civ 270, all express terms of the construction agreement had to be in, or evidenced in, writing for the purposes of section 107. It was insufficient that only terms material to the adjudication were recorded. The February agreement contained unwritten terms concerning additional joiners on 48 hours’ notice, snagging sheets, Rok’s supervision and management, and the agreed rates.
3. The fax’s reference to “agreed rates” confirmed that rates existed but did not evidence what they were. That omission alone meant that the contract was not a construction contract in writing.
4. The court agreed with the approach in Murray Building Services v Spree Developments that an express written price was unnecessary. A price could be established by construing the written agreement or applying an agreed verbal or mathematical formula. However, the court rejected any suggestion that an otherwise written construction contract failed merely because a reasonable price would be implied by law. That observation in Murray Building Services v Spree Developments was obiter.
5. The February arrangement was a limited dayworks contract. It did not give Rok a contractual right to require Bestwood to carry out variations. The standard subcontract documents were not incorporated; the pro forma reference to the “Main Order” did not alter that conclusion.
6. An interim payment of £15,000 was ordered on account of costs. The issues concerning any separate measured-work contract remained undecided.

Not stated in the judgment.