Delta Fabrication & Glazing Ltd v Watkin Jones & Son Ltd

For a contractual variation to amalgamate separate construction contracts, the parties’ conduct must be unequivocal and consistent only with an agreement to vary. Combining payment notices, applications or final-account figures, while separately identifying the underlying work packages, will not ordinarily satisfy that test. The statutory expression “a construction contract” in the Housing Grants Construction and Regeneration Act 1996 bears its normal contractual meaning. Contracts that remain separate at common law do not become one contract merely for the purposes of adjudication. An estoppel argument requires evidence of representation, reliance and detriment. Where the adjudicator therefore determined disputes under two separate contracts in one referral, the court may refuse summary enforcement for want of jurisdiction.

The claimant sought summary judgment to enforce an adjudicator’s award under the Housing Grants Construction and Regeneration Act 1996. The parties accepted that they had originally entered into two separate sub-contracts, one for brick slip cladding and one for roofing works. The defendant challenged the adjudicator’s jurisdiction on the basis that the claimant had referred disputes under both contracts in a single adjudication.

The claimant argued that the contracts had later been amalgamated by conduct, alternatively for the purposes of the Act, or that the defendant was estopped from denying a single contract. The central issues were whether the parties had varied or otherwise agreed to treat the contracts as one, and whether the adjudicator consequently had jurisdiction.

1. Summary judgment test. The defendant needed only to show a real prospect of successfully defending the claim. The prospect had to be real rather than fanciful, and the court should avoid a mini-trial. Summary judgment was nevertheless appropriate where the court had sufficient material to conclude that the defence had no real prospect of success.
2. Amalgamation by conduct. The parties’ conduct had to be unequivocal and consistent only with an agreement to vary the separate contracts into one. The combined payment notice and payment application did not meet that standard. Each document separately identified and calculated the cladding and roofing works. The consecutive numbering of variations, separate warranty deeds and later correspondence also showed that the contracts continued to be treated as distinct.
3. The court distinguished RCS Contractors Ltd v Conway [2017] EWHC 715. That decision concerned an oral agreement for one contract covering three sites. It did not establish that separate written contracts become one merely because payment documentation is combined.
4. Application of the Act. Section 104(1) defines a construction contract as an agreement for specified construction operations. The Act contains nothing indicating that “contract” or “agreement” bears a meaning other than its ordinary contractual meaning. Separate contracts cannot therefore become one construction contract for adjudication purposes without being amalgamated at common law. In any event, the payment arrangements did not unequivocally show that the parties had operated the two contracts as one.
5. Estoppel. The claimant had not produced evidence of representation, reliance or detriment. The payment notices were equally consistent with administering payments together while retaining separate contracts. The estoppel case therefore had no real prospect of defeating the jurisdictional defence.
6. The defendant had a strong prospect of establishing that the adjudicator lacked jurisdiction because the referral concerned disputes under two separate contracts. The application for summary judgment was dismissed. The court also refused to make permission to defend conditional on payment into court.