107772.001 SH Construction Case Booklet

4. Jurisdiction – Oral contract – Scheme – Reservation – Waiver Donald Insall Associates Limited v Kew Holdings Ltd [2019] EWHC 364 TCC Mrs Justice O’Farrell judgment, 5 February 2019 In this case, a number of jurisdictional challenges were raised in the adjudication and reprised on enforcement. The case raised the issue of reservation and waiver considered by the Court of Appeal in Bresco . 15 The Claimant sought to enforce the decision of the adjudicator in its favour. The Defendant resisted on the grounds the adjudicator lacked jurisdiction. The Claimant (“DIA”) provided architectural services and the Defendant company (“Kew”) was the leasehold owner of the King’s Observatory in Kew, Richmond. Mr Brothers, resident in Hong Kong, was a director of Kew, a company based in the Cayman Islands. DIA was approached by Mr Brothers to provide architectural services for the conversation of the King’s House from commercial to residential use. DIA sent a fee proposal to Mr Brothers by letter 9 July 2010, on the basis that the contract would be based on RIBA Design Services standard form of agreement. Work commences just after the fee proposal. DIA sent Mr Brothers the RIBA standard suite of appointment documents on 3 September 2010. The documents identified the client at “RJF Brothers”. At a meeting on 14 October 2010 it was agreed works would be taken forward on the basis of the fee proposal letter which was signed by Mr Brothers “Confirmed: KEL Holdings Limited” and beneath that “RJF Brothers. Director” and the date. On 26 October 2010 DIA sent an email to Mr Brothers confirming the appointment in which it was clear that DIA believed in was contracting with the company Kew. There was no reply to that email. Invoices were sent by DIA to Mr Brothers via email in Hong Kong and paid either by Mr Brothers, or by Kew. There was a statutory change to the treatment of the works for VAT purposes. Mr Brothers having taken advice told DIA that invoices should now be addressed to him personally as they were. By 2018 a dispute had arisen as to the fees properly due to DIA which DIA referred to adjudication before Dr Chappell. By a letter dated 31 October 2018 Kew’s solicitors raised a number of ‘threshold’ jurisdictional challenges under a reservation “without prejudice” that there was “no construction contract between the referring party and the respondent.” The ii)   The purported contract was not in writing or evidenced in writing as then required by s 107 of the Housing Grants Construction and Regeneration Act 1996 (before it was amended) iii)   No crystalised dispute as the invoices relied on were all issued to Mr Brothers not Kew. following jurisdictional challenges were raised. i)   There was no contact between DIA and Kew

Dr Chappell considered and rejected the objections and determined that DIA was due £173,573.20 plus interest and the adjudicator’s fees. DIA paid the fees. Kew failed to pay the sums awarded. Having rejected a submission on behalf of Kew that the claim form and particulars failed to plead a proper cause of action, the Court went on to consider the various jurisdictional challenges. The first and central (threshold) issue was whether there was a contract between the parties, or was it made with a director of the Defendant company, a Mr Brothers? And if there was a contract, was it a construction contract i.e. in writing or evidenced in wiring as required by s 107 of the Housing Grants Construction and Regeneration Act 1996 (before it was amended), Kew contending that if there was a contract it was made by an oral variation? The correct approach was to ask whether there was a real prospect of Kew persuading the Court that there was either no contract, or one subject to an oral variation; and whether it was appropriate to determine those issues now within the summary judgment application, or whether a trial was required. The Court was content to decide the issues upon the documents and the witness statements before the Court and found, as had the adjudicator, that there was a concluded contract between the parties in the proceedings. The following background facts were held not to be conclusive of the contractual arrangements. The fact that invoices were sent direct by DIA to Mr Brothers, as that fitted several explanations including the need reduce VAT liability. The issue of who paid the fees, since part was paid by Kew and part by Mr Brothers. Contract with others made by Mr Brothers in his personal capacity. The fact that Mr Brothers was to occupy the residence when completed. All such matters could not override the very clear effect of the written contract signed by Mr Brothers in his capacity as a director of Kew and the DIA confirmatory email which spelled out who was the client and was not responded to. Next, was there a crystalised dispute? The Court found there was. The sending of the invoices to Mr Brothers was found to have been done in his capacity as a director and as a convenience given Kew was registered in the Cayman Islands.


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