PT Building Services Ltd v ROK Build Ltd

Factual and Procedural Background

The Plaintiff ("PTB") was engaged by the Defendant ("ROK") to perform kitchen and bathroom works in council-owned properties as part of a housing project in The City. Disputes arose regarding payments claimed by PTB, which led to a series of adjudications concerning the sums due. PTB served notices of adjudication in August and October 2008, seeking payment for works completed. ROK disputed the existence of a crystallised dispute, the adjudicator's jurisdiction, and the enforceability of the adjudicator’s decisions. The first adjudicator ruled in PTB’s favor on 1 October 2008, awarding sums claimed. PTB sought to enforce this decision through court proceedings, while ROK resisted enforcement on multiple grounds including jurisdictional challenges and the nature of the contract between the parties.

Legal Issues Presented

1. Whether ROK is entitled to contend that the adjudicator's decision is not binding in light of its objections to the second adjudication and payment of adjudicator's fees.
2. Whether there was a contract in writing within the meaning of section 107 of the Housing (Grants) Construction Regeneration Act 1996 ("1996 Act").
3. Whether ROK can resist enforcement on the basis that the claim included work outside the scope of the contract in writing.
4. Whether the Adjudicator lacked jurisdiction because the dispute had not crystallised, or whether the referral process breached natural justice.
5. Whether non-compliance with paragraph 7(2) of the Scheme invalidated the adjudication or breached natural justice.
6. Whether the Adjudicator answered the wrong question, thereby depriving the decision of effect.

Arguments of the Parties

Plaintiff's Arguments

• ROK elected to accept the adjudicator’s decision by relying on it to persuade the second adjudicator to resign and by paying the adjudicator’s fees, making the decision binding.
• All terms of the contract were evidenced in writing, including a document titled "Subcontract pre-contract interview notes" and subsequent documents and communications.
• The adjudication concerned a single dispute under one construction contract, and the adjudicator had jurisdiction to decide the sums due.
• The dispute had crystallised by the time of the second notice of adjudication, based on prior correspondence and negotiations.
• Any procedural non-compliance with the Scheme was not so serious as to invalidate the adjudication or breach natural justice.
• The adjudicator answered the appropriate question concerning sums due under the contract.

Defendant's Arguments

• ROK denied that a dispute existed and opposed the enforcement of the adjudicator’s decision on jurisdictional grounds, including lack of a written contract and absence of a crystallised dispute.
• ROK argued the adjudicator had no jurisdiction because the dispute referred was not crystallised and the referral process was flawed.
• ROK submitted that payment of the adjudicator’s fees was made by mistake and did not amount to acceptance of the decision.
• ROK contended that the adjudication included work outside the scope of any written contract and that multiple disputes under different contracts could not be adjudicated together without consent.
• ROK maintained that the second adjudicator had no jurisdiction to proceed because the dispute had already been decided by the first adjudicator.
• ROK argued that the adjudicator answered the wrong question by treating the dispute as an interim accounting rather than a final account issue.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed whether ROK could challenge the adjudicator’s decision after having taken benefits from it. Applying the doctrine of election and approbation and reprobation, the court found that by relying on the first adjudicator’s decision to persuade the second adjudicator to resign and by paying the adjudicator’s fees (absent evidence of mistake), ROK had elected to treat the decision as binding and was precluded from challenging it.

Regarding the contractual relationship, the court analysed the documents, notably the "Subcontract pre-contract interview notes," and found that although the scope of work was not fully detailed, the contract terms were sufficiently evidenced in writing under s.107 of the 1996 Act. The court held that instructions for additional work, even if given orally or subsequently, did not negate the written evidence of the contract.

On the issue of whether the adjudication included work outside the contract, the court found that the various works performed were part of one construction contract administered under the written terms and that no separate subcontracts had been formed for these works at the relevant time.

The court considered the crystallisation of the dispute and concluded that a dispute had crystallised by the time of the second notice of adjudication, based on prior negotiations and correspondence. The additional details in the second notice did not create a new dispute but continued the existing one.

Concerning procedural compliance, the court distinguished between fundamental provisions of the Scheme and associated procedural requirements. It held that the failure to provide the construction contract documents with the initial referral notice did not deprive the adjudicator of jurisdiction nor constitute a serious breach of natural justice warranting non-enforcement.

Finally, the court rejected the submission that the adjudicator answered the wrong question, finding that the adjudicator addressed the sums due under the contract as framed by the notice of adjudication and dispute.

Holding and Implications

The court granted summary judgment in favor of the Plaintiff (PTB), enforcing the adjudicator’s decision dated 1 October 2008 and ordering payment of the sums claimed including interest. The Defendant (ROK) was found to have no real prospect of successfully defending the enforcement proceedings based on its jurisdictional and procedural challenges.

The decision directly affects the parties by confirming the enforceability of the adjudicator's award and rejecting the Defendant's multiple grounds of challenge. The opinion does not establish new legal precedent but applies established principles of election, contract formation under the 1996 Act, adjudication jurisdiction, and procedural fairness in the context of construction adjudication enforcement.