M Hart Construction Ltd & Anor v Ideal Response Group Ltd (Rev 1)

On a summary judgment application to enforce adjudicators’ decisions, a disputed oral novation ordinarily requires an oral hearing where the evidence presents a real conflict and the alleged conduct does not make novation easy to infer.

An adjudication notice must identify the dispute, but it need not state every contractual term with complete accuracy. Misdescription of the contract will not deprive the adjudicator of jurisdiction where the underlying construction contract and dispute are identifiable, and the error does not alter the substantive dispute. The court may nevertheless enforce an adjudicator’s decision where the claimant’s contractual entitlement is sufficiently established despite such misdescription.

The claimants sought summary judgment to enforce three adjudicators’ decisions concerning profit shares under informal construction arrangements for works at the Olympic Village.

The arrangements were initially made orally between Ideal Response Group Ltd and Mr Hart personally. The claimants later alleged that the contracts had been novated to M Hart Construction Ltd. PK Maintenance Ltd was also a party to the defects contract. Ideal disputed the alleged novation and challenged the adjudicators’ jurisdiction, contending that the notices identified contracts involving M Hart Construction Ltd when the original contracts had been made with Mr Hart.

The central issues were whether the alleged novation could be resolved summarily, whether the notices validly identified the disputes and relevant contracts, and whether PK Maintenance Ltd could enforce its adjudicator’s decision.

1. M Hart Construction Ltd claims. Summary judgment was refused on the two claims brought by M Hart Construction Ltd. There was a direct conflict between Mr Hart’s and Mr Ibrahim’s evidence about the alleged conversation said to initiate the novation. The surrounding conduct, including invoices, correspondence and the pay less notice, did not make novation sufficiently clear to justify summary determination. The issue required oral evidence and Ideal had a real prospect of defending the claims.
2. Novation. Novation requires the consent of all parties and extinguishes the original contract, replacing it with a new contract. The evidence did not establish, on a summary basis, that the original contracts had been novated ab initio to M Hart Construction Ltd.
3. Adjudication notices. Section 108 of the Housing Grants Construction and Regeneration Act 1996 and paragraph 1 of the Scheme require the referral of a dispute arising under a construction contract. They do not impose a separate requirement to identify every contractual term or to describe the contract with complete accuracy. The notices identified the dispute concerning entitlement to profit shares. If novation had been established, the inaccurate description of the contracts would have been an error or misdescription, not a jurisdictional defect.
4. PK Maintenance Ltd claim. PK Maintenance Ltd was admittedly party to a contract with Ideal. The notice’s reference to M Hart Construction Ltd misidentified one contracting party, but that misdescription did not affect the substantive dispute concerning PK Maintenance Ltd’s profit share. Summary judgment was therefore granted for the sums awarded in the PKM defects adjudication, with interest to be assessed.

First-instance decision. No prior appellate decision is stated in the judgment.