By an agreement dated 4th December 1996 the defendant had agreed to act as a developer in respect of a development for the claimant. The agreement was subsequently amended by a deed of variation dated 20th July 1998. The claimant, Earls Terrace Properties Limited, sought a declaration that the agreement, as amended by the variation, between them and the defendant was not a construction contract within the definition of the Act. The parties agreed (solely for the purpose of the application) that the first agreement came within the definition of a construction contract for the purposes of the Act. However, that agreement pre-dated the operative date of the Act, so Part II of the Act did not apply to the first agreement. The deed of variation was entered into after the effective date of the Act. The deed of variation merely amended the fee due to the defendant, and deleted one sub-clause in the main agreement. While the deed of variation was entered into after the effective date of the Act, the variation itself did not amount to construction operations for the purpose of the Act.

The main issue was whether the effect of making the deed of variation on 20th July 1998 (not in itself a construction contract), but which varied the terms of the main agreement of 4th December 1996 (which was a construction contract, but not one to which the Act applied because the agreement pre-dated the operative date of the Act) was to bring within Part II of the Act the entirety of the agreements.

HHJ Seymour QC held that the deed of variation quite simply modified the provisions concerning the fees and so did not bring the primary agreement between the parties within the scope of the Act. He did go on to say that it is possible to comprehend that a variation to a construction contract made before the relevant provisions of the Act came into force could amount to a construction contract and therefore bring the entirety of the varied agreements within the scope of the Act. However, that had not happened in this case. As a result the adjudication that had been commenced was void and of no effect, and the adjudicator had no jurisdiction to act.