Gibson v Imperial Homes
The employer had no real prospect of success at trial in its defence to the contractor's application to enforce the adjudicator's decision in its favour that there was no agreement in writing within the meaning of section 107(1) of the Construction Act 1996
27 February, 2002
Disputes arose between the employer and the contractor which were referred to adjudication. The employer contended that the adjudicator had no jurisdiction on the ground that no written contract had come into existence for the purposes of section 10791) of the Construction Act 1996. Section 107 provides by sub-section (1) that the Act only applies when the construction contract is in writing and by sub-section (2) that an agreement is in writing where it is evidenced in writing or there is an agreement otherwise than in writing which is recorded by a party to the agreement or by a third party with the parties? authority. The adjudicator concluded that there was not sufficient doubt that there was a contract between the parties to the action to prevent him from proceeding with the adjudication. The contractor applied for summary judgment to enforce the adjudicator's decision that the employer should pay a specified sum to him. The employer contended at the court enforcement proceedings that its defence had to succeed insofar as the contractor's reply to its response to the contractor's notice of referral was that the agreement arose out of and was subsequent to the developer's agent's letter to the contractor on which the contractor relied as evidencing the agreement (the contractor contending that the reply was plainly an error). Judge Toulmin rejected the employer's contention on the basis of the evidence produced and held that that contention had no real prospect of success at trial . The obvious inference was that the developer's agent's letter evidenced an agreement in writing under section 107(4) on the basis that the letter constituted a record made by a third party, ie the developer's agent, with the parties? authority. This was because work began soon after the letter was sent and the employer did not contend that the work was carried out on terms which were in conflict with those in the letter. Advice Note If an authorised agent notes the existence of an oral construction contract and sets out its terms in a letter whose accuracy is accepted, the contract will come within the Act's ambit notwithstanding that it is not in writing.