Grovedeck Limited -v- Capital Demolition Limited

The sub-contracts made orally in the first instance were not agreements in writing under section 107 of the Construction Act 1996
The sub-contractor carried out works pursuant to two oral sub-contracts. Disputes arose and the adjudicator made a decision in the sub-contractor's favour. The sub-contractor sought to enforce the decision by applying for summary judgement. The contractor contended that the Construction Act 1996 did not apply to the sub-contracts because they were not in writing. The sub-contractor alleged that the sub-contracts were brought within the Act by its referral notice and by the contractor's response to that notice once the adjudicator had embarked on his enquiry as to his jurisdiction in response to the contractor's request for him to do so. Sub-section 107(1) provided that the Act was only to apply where the construction contract was in writing and any other agreement as to any matter was only effective for the purposes of the Act if it was in writing. Sub-section (5) provided that an exchange of written submissions in adjudication proceedings or in arbitration or court proceedings in which the existence of an agreement otherwise than in writing was alleged by a party and not denied by the other party in his response constituted an agreement in writing to the effect alleged. Judge Bowsher held that the sub-contracts were not agreements in writing under sub-section 107(5) with the results that the Act did not apply to them. The sub-contractor's contention involved the unstated proposition that even though in every communication after his unlawful appointment the contractor challenged and denied the adjudicator's jurisdiction, those communications themselves changed the nature of the sub-contracts and gave him jurisdiction. Parliament could not have intended the unjust result that if a party to adjudication alleged the existence of an oral agreement and the other party did not deny its existence, there was an agreement in writing for the purposes of section 107 of the Act. The sub-contractor did not contend that the contractor made an ad hoc submission to adjudication or waived any right to challenge the jurisdiction. Advice Note Section 107 of the Construction Act clearly provides that only construction contracts in writing are subject to the Act's adjudication provisions. The courts will not be sympathetic to detailed analyses of what was said by the parties in their adjudication written submissions to ascertain whether, perhaps unknowingly, the defendant by inference admitted the existence of the contract so as to invoke sub-section (5).