RCS Contractors Limited v Conway [2017] EWHC 715 (TCC)

Published 1 June 2017

Executive Summary

The Honourable Mr Justice Coulson enforced an Adjudicator's award on summary judgment following a dispute as to whether there was one contract across three sites; or three separate contracts. Whilst Coulson J was able to deal with the simple facts in this instance, the case serves as a warning of difficulties faced by Adjudicators when dealing with oral contracts, and the problems that could follow on enforcement.

The Facts

RSC Contractors ("RSC") carried out groundworks for Mr Conway as a sub-contractor at three sites: Walmer Road, Notting Hill, London; Middlemas Green, Pewsey, Wiltshire; and Ridge Road, Sutton, Surrey.

There was a dispute over the final account which RSC referred to Adjudication.

RSC said there was one oral contract for the work across all three sites. Mr Conway maintained that there were three separate oral contracts and that, in consequence, the Adjudicator did not have the necessary jurisdiction.

This was the only issue before the Court on enforcement.

Authorities

Under s108 of the Construction Act, a party may only refer a single dispute to Adjudication.

In general terms, any difficulties that might arise from this have been ameliorated by the familiar passage from Fastrack Contractors Limited v Morrison Construction Limited [2000] BLR 168:

"20.. During the course of a construction contract, many claims, heads of claim, issues, contentions and causes of action will arise…When a dispute arises, it may cover one, several or many of one, some or all of these matters. At any particular moment in time, it will be a question of fact what is in dispute. Thus, the 'dispute' which may be referred to adjudication is all or part of whatever is in dispute at the moment that the referring party first intimates an adjudication reference. In other words, the 'dispute' is whatever claims, heads of claim, issues, contentions or causes of action that are in then in dispute which the referring party has chosen to crystallise into an adjudication reference."

Due to the width of that text, there are few cases where the Court has concluded that the Adjudicator did not have the necessary jurisdiction because there was "more than one dispute".

The more successful argument is where there is more than one contract. For example:

• Grovedeck Limited v Capital Demolition Limited [2000] BLR 181 - decided obiter that, because there were claims under two separate contracts, there could not be one single dispute; the Adjudicator did not have jurisdiction
  
  
• Enterprise Managed Services Limited v Tony McFadden Utilities Limited [2009] EWHC 3222 (TCC), under r4.90 of the Insolvency Rules, the financial position under four contracts had to be considered together; it was not a single contract, thereby depriving the adjudicator of jurisdiction.
  
  
• By contrast, in AMEC Group Limited v Thames Water Utilities Limited [2010] EWHC 419 (TCC), although there were numerous works contracts, the parties' overarching obligations were set out under a single framework agreement. The dispute arose under that single framework agreement, so there was no jurisdictional issue.
  
  
• In Viridis UK Limited v Mulally & Co Limited [2014] EWHC 268 (TCC), the works spanned across a number of different locations. Summary judgment was not ordered because the claimant had not shown that there was a single overarching contract.

Decision

The issue was simple. Either there was one contract and one dispute; or three contracts and three separate disputes. HHJ Coulson considered the evidence and concluded that there was one single contract.

The decision was therefore enforced.

Comment

As a post script, Coulson J took opportunity to express his dissatisfaction with the amendments to the Construction Act which remove the requirement for a contract in writing. He said that this leaves Adjudicators grappling with oral contracts with all of the uncertainty and contention that such a situation endangers. It will also invariably lead to problems on enforcement. As Coulson J commented:

"only rarely will a disputed oral agreement be the subject of a successful summary judgment application"

This serves as a warning to those seeking to refer disputes under oral contracts that, not only will this leave the Adjudicator "grappling" with the issues; there may also be trouble ahead on enforcement.