In RJT Consulting Engineers vs DM Engineering the court held that there was no "contract evidenced in writing", and, therefore, that the adjudicator had no jurisdiction.
In Motherwell Bridge vs Micafil Vakuumtechnik the court decided not only that a contract existed, but also the date on which it was formed – even though the subcontract was said to be on FIDIC terms when FIDIC did not produce a subcontract at the time (18 October, page 58). What factors persuade one court that there is not a contract, and another that one exists?
Section 107(1) of the Construction Act provides that adjudication provisions apply only where the contract is in writing. An agreement may be in writing if "the agreement is evidenced in writing". If a contract is not "in writing" then the act does not apply and an adjudicator has no jurisdiction.
In RJT, enforcement of the adjudicator's decision was challenged on the basis that the contract was not in, or evidenced in, writing. The adjudicator therefore had no jurisdiction under the act. The Court of Appeal had to consider what was meant by an agreement that is "evidenced in writing". It followed the approach of Ward LJ who held that "what has to be evidenced in writing is, literally, the agreement, which means all of it, not part of it".
In Motherwell Bridge, the issue before Judge Toulmin was, what were the particular terms of the contract? The proceedings did not relate to an adjudication, so there was no requirement for the contract to be in writing. Consequently, the judge's task was to find out what the contract between the parties was, rather than whether it met the test of being in writing under the act.
It should also be noted that the Court of Appeal judgment in RJT was given after the decision in Motherwell Bridge and, in any event, takes precedence over the decision of the lower court.
When to serve an expert's report
A contractor is withholding money from our firm's subcontract account for reasons including alleged defects. We want to commence adjudication to recover our money. We intend to instruct an expert to prepare a report on the alleged defects. Do we have to serve the report on the contractor before we start adjudication or can we start and serve the report later?
Before a party commences adjudication proceedings, it must ensure that it has informed the other party of its claims and given it a proper opportunity to consider its response. If it doesn't, it is vulnerable to the argument no dispute has arisen and that any favourable decision given by an adjudicator is unenforceable. A referring party must also ensure its notice of intention to refer includes all claims it wishes to refer to the adjudicator. The adjudicator has no authority to consider any new claims introduced part way through the process. However, a party is entitled to present new evidence in support of claims that have been referred to adjudication.
You could commence adjudication proceedings before serving your expert's report, provided the report introduces no new arguments or claims but only includes new evidence to support your position. But this is risky. At this stage you do not know what your expert's report will say – he may want to introduce a new argument to justify your position. It may be better to wait for your expert's report, serve it on the contractor and, after giving it time to consider its response, commence adjudication. This will put you in the best position to avoid any jurisdictional challenges to the adjudicator's decision.
Oral variations to a written contractI have a cladding subcontract with a contractor that was renovating a shop. The contract was fixed in duration and price and included a written scope of works. There were no written provisions for variations or work beyond the scope as described. At the request of the contractor we ended up undertaking a large amount of additional cladding. Nothing was put in writing but the contractor accepted we would get paid for the additional work. Yet this extra work has not been paid for despite forming part of our final account. We have written to the contractor saying that we intend to go to adjudication. It has responded saying we are not entitled to adjudicate because the disputes relate to oral variations that amount to individual oral collateral contracts and so are not subject to the Construction Act. Is this right?
Can the statutory adjudication scheme be evoked in relation to your contract? Section 107(3) provides that where you have an agreement made otherwise than in writing, provided that such an agreement refers to terms that are in writing, it will amount to a written agreement. Your dispute has arisen out of your written construction contract as orally varied by the parties. In Total M&E Services Limited vs ABB Building Technologies Limited (2002) the judge held that the contract, as varied, was clearly within section 107 notwithstanding that it was partly in writing and partly oral. The judge found that the adjudicator had jurisdiction to make determinations as to the additional work. I would suggest that you go ahead and adjudicate – although be warned, rumour has it another recent case has been decided on the basis that the variations themselves need to be in writing. Even if it is ultimately held you do not have a right to adjudicate, you can still go to court for your money.