Harding (t/a MJ Harding Building Contractors) v Paice & Anor

Contractual amendments must be construed objectively and as a whole. Deleting an article containing an adjudication provision does not remove a separate, self-standing adjudication clause in the contract conditions unless the wording makes that consequence clear. A contract provision is not dependent on a separate article where the conditions have otherwise been incorporated and operate in their own terms. Background correspondence cannot be used to infer the parties’ subjective intentions for the purpose of contractual interpretation. The application of these principles established that the adjudicator had jurisdiction.

The claimant sought summary judgment to enforce two adjudication decisions awarding sums under a building contract for the construction and fitting out of two houses. The defendants argued that amendments to the JCT Intermediate Building Contract had deleted the contractual provision for adjudication. They also raised the alternative issue whether adjudication arose only as an implied term under the Housing Grants, Construction and Regeneration Act 1996 and the Scheme, subject to the residential occupier exception in section 106.

The central issue decided was whether clause 9.2 remained effective despite the deletion of article 7 and the insertion of “n/a” in the contract particulars.

1. Summary judgment granted. The claimant obtained judgment to enforce the two adjudication decisions, subject to submissions on the appropriate sum and any payment made in respect of the first adjudication.
2. The contract was to be interpreted objectively and by considering its terms as a whole. Negotiating correspondence and subsequent conduct were not assistance in interpreting the contract. Subjective intentions expressed during negotiations could not establish the objective meaning of the agreement.
3. Clause 9.2 expressly provided that, where a dispute arose which either party wished to refer to adjudication, the Scheme applied subject to stated qualifications. It was a self-standing adjudication provision. Its operation did not depend on article 7, because the conditions containing clause 9.2 were incorporated and clause 9.2 operated on its own terms.
4. The deletion of article 7 therefore did not remove adjudication. The “n/a” entry against clause 9.2.1 was ambiguous: it might indicate that the parties did not wish to name an adjudicator or nominating body, rather than that adjudication itself was excluded. It could not override the clear wording of clause 9.2.
5. The comparison with arbitration did not alter that conclusion. Arbitration under clause 9 was expressly linked to article 8 and the contract particulars stated whether the arbitration provisions applied. The drafting relating to sectional completion and listed items was also materially different, because those provisions lacked the necessary contractual definitions or particulars.
6. On the true construction of the contract, the adjudicator had jurisdiction in both adjudications. The court consequently did not decide whether an implied adjudication term arose under the Act and the Scheme or whether the residential occupier exception applied.