3) Jurisdiction – existence of contract – estoppel by convention – natural justice – reversing burden of proof – Changing Climates Ltd v Warmaway Ltd [2021] EWHC 3117 Sarah Watson QC (judgment 6 September 2021)
The defendant contended that there was a consortium between defendant (as lead), claimant and a third company (Dynamics), formed to make a composite tender bid for M&E and HVAC to a main contractor (Broadley) – thus one contract and it was between the consortium and Broadley. Alternatively the defendant contracted with Broadley as agent for both the claimant and Dynamics. After reviewing at length the contemporaneous documents and the witness evidence, the judge concluded there was no realistic prospect of the defendant proving at trial that a consortium had existed, beyond a loose agreement to form a consortium for future orders, nor of establishing an agency. On the contrary the evidence clearly pointed to a single contract between the defendant and Broadley for the whole of the M&E and HVEC works, and to agreement for and actual issue of separate ‘sub-contract’ order by the defendant to the claimant (and to Dynamics).
In an interesting but fact-specific case, HHJ Watson enforced the decision of the adjudicator and refused leave to appeal.
There were three issues.
(1) Was there a contract between claimant and defendant, it being agreed that if there was a contract then it was a construction contract? (2) Even if there was a contract, was the claimant estopped by convention from alleging its existence and relying upon it? (3) In contending for a reversal of the burden of proof on issue (1), had the claimant drawn the adjudicator into a breach of the rules of natural justice?
Issue 2 - Estoppel
There was no evidence of a shared or assumed understanding or reliance on facts and matters sufficient to create an estoppel.
Issue 3 - Natural Justice
Although the referral notice invited the adjudicator to consider that the burden was on the defendant to prove there was no contract as alleged, rather than the burden of proof being on the claimant to prove the existence of the contract, there was nothing in the decision to indicate that the adjudicator had adopted the wrong approach.
Issue 1 – was there a contract?
The claimant said it had received a sub-contract order from the defendant pursuant to which it made payment applications, received payment certificates and interim payments from the defendant.
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