The adjudicator was correct in finding that an initial oral agreement was caught by a "written agreement" under s107 of the HGCR Act 1996 due to substantial documents produced after the initial agreement. The adjudicator therefore had authority to act. (Overruled on appeal).
HHJ Mackay, Technology and Construction Court
9 May 2001
RJT were consulting engineers engaged by DM, a mechanical and electrical sub-contractor in connection with the refurbishment of the Holiday Inn in Lime Street, Liverpool. A Part 8 claim was brought to resolve a dispute between the parties as to the validity of an adjudication which DM purported to bring under the HGCRA 1996 in which it claimed damages in excess of £858,000 for alleged professional negligence on the part of RGT.
RJT claimed their oral engagement by DM was not an "agreement in writing" for the purposes of s107 of the 1996 Act. The adjudicator considered the agreement between the parties, although oral, was evidenced in writing and therefore was caught by the Act. RGT sought a declaration that the agreement was not an "agreement in writing" for the purposes of the Act.
The court found that "the purpose of the Act, and in particular s.107, was to bring in, notwithstanding that agreements were not in writing, those agreements which could be caught by the Act". Thus the Act's purpose was to ensure that parties to a construction agreement would be able to take advantage of the procedures set out in the Act. The written material between the parties was comparatively great including invoices setting out the nature of the work, the names of clients and the identity of the place of work. The court adopted a purposive approach and held it was not necessary to have a recitation of the terms of an agreement when the existence of the agreement, the parties to the agreement, the nature of the work and the price of the agreement were plainly to be found in documentary form. Although the initial agreement was oral, for it not to be caught by the Act would run contrary to what the Act intended and the extensive documentary evidence in this case was sufficient to bring it within the adjudication proceedings. The declaration was refused.
RJT were given permission to appeal on the grounds there was a significant issue between the parties in an area not presently governed by authority which may affect other contractors/consultants. DM was ordered that no steps be taken for 28 days.
The adjudicator was correct in finding that an initial oral agreement was caught by a "written agreement" under s107 of the HGCR Act 1996 due to substantial documents produced after the initial agreement. The adjudicator therefore had authority to act.
This decision was overruled by the Court of Appeal in a judgment given on 8 March 2002.
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