Westdawn Refurbishments Ltd v Roselodge Ltd

Not all the material terms of the contract were in writing within the meaning of section 107 of the Construction Act

Technology and Construction Court
His Honour Judge McCahill QC
25 April 2006
The contract was for the refurbishment of flats. A dispute arose and the adjudicator made a decision in the contractor's favour. The employer refused to pay the sum awarded by the adjudicator to the contractor. The contractor brought court proceedings to enforce the decision. One of the grounds on which the employer resisted enforcement was that not all the material terms of the contract were in writing. If this contention was correct, this would have meant that the adjudicator lacked jurisdiction by reason of (1) the requirement in section 107 of the Construction Act that a construction contract must be in writing for the Act's adjudication provisions to apply and (2) the Court of Appeal's interpretation of this requirement that all "material" terms of the contract must be in writing.
Judge McCahill agreed with the employer's contention. The following contractual payment terms which were admittedly agreed orally were material for the purpose of section 107 on an objective basis by reason of being payment terms and providing certainty as to the time for payment (and in particular when the obligation to pay arose), namely (1) the trigger point for when completion of work in each flat had been achieved and when the contractor was entitled to raise an invoice for the work done was when the keys to the flat were returned and the relevant electrical and gas certificates had been issued and (2) payment was to be made within 30 of the contractor issuing each invoice, which arrangement was subsequently changed to a 25% pre-payment of the contract sum with the purchase order. Judge McCahill also considered the employer's submission that the full description of the works was not in writing. The employer submitted that a number of matters, such as colour, style, make of boiler and the location of rose pendants, were not in writing. The judge rejected this on the basis that the adjudicator had been entitled to take a robust view and to use the powers conferred on him to deal with minor matters and to use the powers conferred on him to deal with minor matters having considered the contractual documentation (including the quotation, the acceptance and the invoice) in its factual matrix.