ACERAMAIS HOLDINGS LTD v HADLEIGH PARTNERSHIPS LTD

Even if the employer had established that there was no contract in writing for the purposes of the Construction Act, the court would nevertheless have been reluctant to exercise its discretion in favour of making the declaration sought by the employer that there was no such contract
 
 

Technology and Construction Court
Her Honour Judge Frances Kirkham
8 July 2009

 
Even if the employer had established that there was no contract in writing for the purposes of the Construction Act, the court would nevertheless have been reluctant to exercise its discretion in favour of making the declaration sought by the employer that there was no such contract.
 
The contractor served a notice of adjudication on the employer. The employer contended that the adjudicator had no jurisdiction because there was no contract in writing within the meaning of section 107 of the Construction Act, issued court proceedings seeking a without notice injunction to prevent the adjudication from proceeding and did not participate in the adjudication. The court gave directions for a speedy trial and ordered that the contractor was not to seek to enforce any adjudicator’s decision in its favour pending trial. The adjudicator awarded the contractor a specified sum. A consent order was made for the employer to give further disclosure, failing which its claim for injunctive relief would be struck out, but the employer failed to do so. The only relief sought by the employer at the trial was a declaration that the construction contract was not an agreement in writing and it did not ask for any other declaration. Judge Kirkham at the trial found that the contract was made in writing and ordered that the employer’s claim in the court proceedings should be struck out.
 
Judge Kirkham held that even if, contrary to the court’s finding, the employer had established that there was no contract in writing, the court would nevertheless have been reluctant to exercise its discretion in favour of making the declaration sought by the employer. The employer’s approach by issuing the court proceedings was both inappropriate and disproportionate. The instant case was not rare or exceptional insofar as the questions were common place, namely whether there was a contract in writing and whether the adjudicator therefore had jurisdiction. The issue of whether there was a contract in writing was not so clear cut that the court could act quickly insofar as there was a trial with disclosure and oral evidence. The employer could and should have raised this issue at the enforcement stage insofar as Coulson J pointed out in Dorchester Hotel v Vivid Interiors (2009). Whilst the parties must have spent a substantial amount of time and money in preparation before trial, the court had been asked to decide only a very narrow issue and the effort put into the court proceedings would bear little fruit.
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