Jaevee Homes Limited v Steve Fincham

A construction contract may be concluded through informal electronic communications where the objective circumstances show agreement on the scope, price and essential terms. The absence of an agreed duration, precise start date or complete payment machinery does not necessarily prevent formation.

Where the parties agree only part of a payment regime, Part II of the Scheme for Construction Contracts Regulations 1998 supplements the contract only to the extent necessary. It does not displace agreed terms. An invoice may constitute a payment application or payee’s notice in default if, viewed objectively in context, it identifies the sum claimed and the basis of calculation.

Jaevee Homes Limited sought declarations concerning its contract with Steve Fincham, a demolition contractor, and the validity of four invoices relied on in an adjudication. The adjudicator had concluded that the contract was formed by WhatsApp exchanges on 17 May 2023, that the parties had agreed payment by invoice within 28 or 30 days, and that the invoices were payable because no payless notices had been served.

The adjudicator’s decision was enforced in earlier TCC proceedings, subject to a set-off. Jaevee then brought this Part 8 claim seeking declarations that its written subcontract governed the relationship and that the invoices were invalid. The central issues were when and on what terms the contract was formed, how the statutory payment regime operated, and whether the invoices were valid payment applications.

1. The Part 8 claim was suitable for determination because there was no substantial dispute of fact. The court rejected Jaevee’s case that the written subcontract sent on 26 May 2023 had been incorporated. The contract had already been concluded through the WhatsApp exchanges on 17 May 2023.

2. Objectively, the exchanges established the contracting parties, scope of work, price and an intention to start promptly. A precise duration and start date were not essential terms because the law could supply a reasonable time for completion, and the works could begin without a precisely agreed date. Payment terms were also not essential to formation because the statutory regime could fill any compliant gap.

3. The payment exchange established an entitlement to monthly applications and payment no later than 30 days after submission of an invoice. Properly construed, “monthly applications” permitted one application in each monthly period, not an unlimited number. No particular date for the monthly period had been agreed.

4. Applying CIMC MBS Ltd v Bennett (Construction) Ltd [2019] EWCA Civ 1515, the court treated the contract as the starting point. Part II of the Scheme supplemented non-compliant or incomplete payment provisions only to the extent necessary. It did not displace the agreed monthly-application and payment-timing provisions. Because the contract did not explain how monthly instalments were to be calculated, paragraph 2 of Part II supplied that mechanism.

5. The invoices sufficiently stated the basis on which the sums were calculated. The first two were intelligible when read with the quotation and marked-up plan; the third claimed the balance for completed internal works; and the fourth claimed agreed additional labour and skips. Objectively, they were intended to operate as applications for payment or payee’s notices in default.

6. Only three invoices were valid within the agreed monthly periods. Invoices 1078, 1079 and 1083 were valid. Invoice 1081 was not valid because it was the second application in its monthly period. The first declaration was refused. The second declaration was granted in modified terms, and the third was modified accordingly.

Not an appeal. The judgment records earlier adjudication-enforcement proceedings in the TCC before District Judge Baldwin, culminating in an order enforcing the adjudicator’s decision, and a later directions order by Waksman J refusing a stay. This court determined the Part 8 claim.