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Sun October 25 2020

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S. G. South Ltd. V Swan Yard (Cirencester) Ltd.

5 Mar 10 The adjudicator awarded S.G. South (SGS) £70,450.14 plus VAT. There had been no written contract between the parties, and, although Swan Yard had not made an issue of this at the adjudication, the adjudicator had undertaken his own investigation.

The adjudicator awarded S.G. South (SGS) £70,450.14 plus VAT. There had been no written contract between the parties, and, although Swan Yard had not made an issue of this at the adjudication, the adjudicator had undertaken his own investigation. Despite concluding that there was no written contract and that the parties’ agreement had been formed either by conduct and/ or oral agreement, the adjudicator concluded that he did have jurisdiction, and continued to make his award.

Section 107 of the Housing Grants Construction and Regeneration Act 1996 requires the construction contract to be in writing. Consequently, as there was no written contract here, it had been open to Swan Yard to challenge the adjudicator’s jurisdiction on that basis. However, Swan Yard made no complaint about the adjudicator’s jurisdiction either before or after the adjudication. They even went so far as to state in a letter sent after the award was made that they did not dispute the decision on that basis.

In the present enforcement proceedings, the particulars of claim carefully avoided any reference to whether or not there had been a contract in writing, alleging instead that the parties had proceeded on the basis that the JCT Management Contract had formed the basis of any contract between them.

The provisions of s.107(5) of the Housing Grants Construction and Regeneration Act 1996 appear to prevent a party which has accepted an adjudicator’s jurisdiction notwithstanding a lack of a written contract from going back on this concession. In the present case, in their exchanges and written submissions, SGS had alleged that a contract existed otherwise than in writing, and Swan Yard had not denied it. In those circumstances, the judge concluded that the adjudicator had had jurisdiction.

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Throughout the works, Swan Yard had made direct payments to SGS’ works contractors, which had caused many of the current problems facing the court.. The sum awarded by the adjudicator included an amount of just over £12,000 for work carried out by Farmington Stone and £15,000 for work carried out by Gulley Electrical. During the adjudication, there was a dispute about whether these payments had been made, and the adjudicator decided that Swan Yard had not proved that it had made them. During preparations for the enforcement proceedings, SGS’ enquiries had shown that Swan Yard had paid out those sums, and, consequently, it conceded that direct payment had been made and did not pursue enforcement of the award for the £27,000-odd.

Swan Yard also maintained that it had made direct payments to Woodward Projects. SGS made no concession in respect of this alleged direct payment, and the adjudicator had found that there was no evidence of any direct payment. The court rejected the documents supplied as proof of the direct payment. The adjudicator had rejected the alleged agreement which Swan Yard relied upon, and there was no basis for challenging his decision.

The court also rejected that the adjudicator had made a mistake in his calculation of the sums awarded as preliminaries, but, even if he had made a mistake, it was one which he had been entitled to make and could not be used to defeat a claim for summary judgment.

The final element of the dispute related to the demolition works. Once again, Swan Yard submitted that the adjudicator had made yet another mistake; this time that he had misread some documents. Its final shot was that it would be wrong to award SGS the £19,457 claimed when its Final Account claim for the works which was to be determined in the Bristol District Registry was only for £8,800. Swan Yard argued that because SGS were now admitting that they were not entitled to the £19,457 by way of their own Final Account claim, the court should not enter judgement for that sum by way of enforcement. This argument assumed that Swan Yard’s case on direct payments was correct, and this was not an assumption that the present court could make. The adjudicator had found that Swan Yard had not made out its case; his decision in respect of the direct payments would remain temporarily binding until the Final Account point was considered in detail by the Bristol District Registry at some future date.

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