RJT Consulting Engineers Limited V DM Engineering (Northern Ireland) Ltd (Part I)

The consultancy agreement was in writing for the purposes of section 107 of the Construction Act 1996

Technology and Construction Court
His Honour Judge Mackay
9 May 2001
A dispute arose which the sub-contractor sought to refer to adjudication. The engineer challenged the sub-contractor's right to seek adjudication on the basis that the consultancy agreement was not in writing for the purposes of section 107 of the Construction Act 1996 and applied to the court for a declaration to that effect. Section 107(1) provided that the Act only applied where the construction contract was in writing. Section 107(2) provided that there was an agreement in writing if the agreement was (a) made in writing (whether or not signed by the parties) (b) made by an exchange of communications in writing or (c) evidenced in writing. Section 107(3) provided that the parties made an agreement in writing where they agreed otherwise than in writing by reference to terms which were in writing. Section 107(4) provided that an agreement was evidenced in writing if an agreement otherwise than in writing was recorded by one of the parties or by a third party with the parties' authority. Section 107(5) provided that an exchange of written submissions in adjudication proceedings or in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing was alleged by a party and was not denied by the other party constituted an agreement in writing.
Judge Mackay refused to grant the declaration and held that the contract was one in writing on the basis of the case falling within section 107(2)(c) as being evidenced in writing. It was not necessary to have a recitation in writing of the terms of an agreement in circumstances where the existence of the agreement, the parties to it and the nature of the work and the price of the agreement were clearly to be found in documentary form insofar as such a requirement would run contrary not only to the Act but also to the court's duty to carry out the law at any particular time. Also the documents evidencing the contract were more than sufficient to bring the case within section 107(2)(c) of the Act. Advice Note Judge Mackay's decision was overturned by the Court of Appeal who set out guidelines for the interpretation of section 107 which emphasised that generally a contract will only be in writing (and therefore subject to the Construction Act 1996) where all the agreement's terms have been recorded in writing.