Goldsworthy & Ors (t/a Goldsworthy Builders) v Harrison & Anor

On a summary judgment application to enforce an adjudicator’s decision, the court must refuse judgment where the contractual basis for the adjudicator’s jurisdiction presents a genuine triable issue. Contract formation depends objectively on the parties’ words and conduct. Parties may become bound while deferring important matters, and subsequent conduct may assist in determining whether particular terms were agreed. However, where an incomplete standard-form contract contains a carefully balanced package of rights and liabilities, the court should avoid imposing a different and less complete bargain. If the standard terms were contractually incorporated, an adjudication clause was not excluded merely because the employer was a residential occupier or because it was not separately discussed. A final certificate issued during an adjudication may be considered, but a promptly disputed certificate may properly be given little weight.

The claimants, builders trading as Goldsworthy Builders, sought summary judgment to enforce an adjudicator’s corrected decision requiring the defendants, residential occupiers, to pay £72,400.25 plus VAT, interest and the adjudicator’s fee.

The principal issue was whether the parties had agreed that the JCT Minor Works Building Contract 2011 terms applied, including the adjudication clause. The defendants argued that the works proceeded under informal arrangements and that the payment regime was inconsistent with the standard form. They also argued that a final certificate and the claimants’ later statement of account displaced or reduced the adjudicated dispute.

The court rejected the secondary challenge but held that the contractual issue was borderline and could not be resolved on the evidence available for summary judgment.

1. Secondary challenge. The adjudicator had to decide the dispute on the facts existing when the decision was made. A final certificate issued during the adjudication might be relevant, particularly if unchallenged. Here, it was immediately disputed and unsupported by adequate evidence, so the adjudicator was entitled to give it little weight. The claimants’ statement of account showing £8,661.46 did not negate or reduce the existing dispute because it represented an additional balance yet to be claimed.
2. Contract formation. Applying the objective approach stated in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] UKSC 14, the question was what the parties communicated by words or conduct and whether they intended legal relations and agreed the terms necessary for a binding contract. A contract may arise during performance, and parties may bind themselves to agreed terms while leaving other matters for later agreement.
3. Conduct after formation may assist in deciding whether a particular term was agreed, consistently with Great North Eastern Railway Ltd v Avon Insurance plc [2001] EWCA Civ 780. The court nevertheless had insufficient evidence of the discussions behind the parties’ emails to determine whether the Minor Works terms had contractual effect.
4. The Minor Works conditions formed a carefully designed package of costs, liabilities and risks. The court should be cautious about constructing an incomplete bargain with a different balance of risks, although the evidence might justify finding that the parties agreed to be bound by an incomplete package.
5. The alternative submission that, if incorporated, the Minor Works terms excluded the adjudication clause was rejected. The court would have treated the adjudication clause as incorporated, without requiring a separate discussion, because the Minor Works terms had been proposed by the employers’ architect. The authorities on formal documentation, including Harvey Shopfitters Ltd v ADI Ltd [2003] EWCA Civ 1757 and Bryen & Langley Ltd v Boston [2005] EWCA Civ 973, supported that conclusion. Twintec Ltd v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC) turned on the wording of the particular letter of intent and established no general contrary principle.
6. Disposition. The secondary challenge was rejected. The primary challenge could not be resolved summarily because there was a triable issue as to whether the adjudication clause had been agreed. Summary judgment enforcing the adjudicator’s decision was therefore refused. Costs were provisionally reserved.