Cases - Westminster Building Company Ltd v Andrew Beckingham

Record details

Name
Westminster Building Company Ltd v Andrew Beckingham
Date
[2004]
Citation
EWHC 138
Legislation
Keywords
Adjudication - JCT standard form - IFC - Intermediate Form of Contract - enforcement - unfair - jurisdiction - acquiescence
Summary

This matter concerned the refurbishment of a property owned and occupied by Mr Beckingham as his residence. Specifications were prepared by a firm of chartered surveyors and the works were awarded to Westminster. It was common ground between the parties that the works were not subject to the provisions of the Act.

Westminster contended that the works were governed by the JCT Intermediate Form of Contract ('IFC'), which incorporated adjudication procedures. Beckingham denied this.

Disputes arose as to payment, which Westminster referred to adjudication following the procedures in the IFC form of contract. The adjudicator decided that Beckingham should pay Westminster the sum of £122,409.16 plus interest.

Those sums were not paid and these proceedings were brought by Westminster in which they applied for summary judgment in respect of the adjudicator's decision.

The enforcement proceedings were defended on 3 grounds:

  1. The contract did not include any adjudication provisions and therefore there was no right to adjudicate.
  2. Even if the contract had contained such provisions, the adjudication clause should be declared of no effect by reason of the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083). Therefore the adjudicator's decision is a nullity.
  3. Even if the above 2 arguments fail, the parties had agreed a maximum liability in respect of the works and the adjudicator had exceeded his jurisdiction by finding that a sum higher than this agreed cap was due and payable.

With regard to point (1), a letter of intent had been issued, which confirmed that formal contract documents would be issued for execution by the parties. Beckingham's surveyors had prepared such a document, which had been issued by Westminster, signed by Westminster and returned to Beckingham's surveyors. Beckingham's surveyors never indicated that there was any aspect of the contract with which they were unhappy, but the contracts were not sent to Beckingham for counter-signature.

The judge found as a matter of fact that a contract had come into being based on the IFC standard form of contract, notwithstanding that Beckingham had not counter-signed the contract.

With regard to point (3), the adjudicator had found that the agreement between the parties was unsupported by consideration and was therefore unenforceable. The judge refused to go behind the adjudicator's reasoning in this part of his decision, finding instead that the adjudicator had made a decision within his jurisdiction.

With regard to point (2), the judge was referred to the judgment in Lovell v Legg and Carver (2003) and concluded that:

  1. 'The terms in this case were not individually negotiated but were couched in plain and intelligible language.
  2. The terms of the contract were decided upon by Mr Beckingham's agent, who are chartered surveyors, and Mr Beckingham had, or had available to him, competent and objective advice as to the existence and effect of the adjudication clause before he proffered and entered into the contract. Westminster did no more than accept the contract terms offered and had no reasonable need to draw to Mr Beckingham's attention the potential pitfalls to be found in the adjudication clause and in its operation during the course of the work. The clause did not, therefore, contravene the requirement of good faith (see especially the speech of Lord Bingham in the Director General of Fair Trading v First National Bank plc [2002] 1 AC 481]).
  3. The clause did not, if considered at the time of making the contract, constitute a significant imbalance as to Mr Beckingham's rights (see especially the judgment of Judge Moseley [in Lovell v Legg and Carver]).
  4. The clause does not significantly exclude or hinder the consumer's right to take legal action or other legal remedy or restrict the evidence available to him (see especially the judgment of Judge Moseley [in Lovell v Legg and Carver]).'

For all these reasons, the judge concluded that the adjudication clause, on the facts of this case, was not unfair and was binding on Mr Beckingham.