In or around June 2003 Roselodge Limited (RL) carried on business buying properties and redeveloping them before renting them to tenants. Westdawn Properties Limited (“WPL”) was in the business of refurbishing properties. RL engaged WPL to carry out works of refurbishment and repair at numerous properties owned by RL, over the following twelve months. These works included the works the subject of this claim, which were described as the Summerwood contract. The contract between RL and WPL was entered into on or around 27 January 2004 and under this contract WPL agreed to carry out refurbishment works at the Summerwood property.

WPL went into voluntary liquidation on 9 August 2004, and it was alleged that on 25 May 2004 WPL assigned the benefits of its contracts, including the one with RL to Westdawn Refurbishments Limited (“WRL”).

The Court considered whether the Contract was in writing; whether the contract was a construction contract; and whether there was merely an assignment of the benefit of the contract or a novation between WPL and WRL.

In relation to the question of whether there was a contact capable of being referred to adjudication the court reviewed the relevant sections of the Housing Grants Construction Regeneration Act 1996 and whether these sections could apply to an assignee.

The argument as to whether there was a contract in writing was raised before the adjudicator as a challenge to jurisdiction. In additional to this argument, in the hearing before HHJ McCaihill QC RL sought to advance two new additional arguments on jurisdiction. The first being that the reference to the adjudicator was flawed from the outset because WRL was not a party to the contract and was an assignee. The second was that under the Scheme the notice of adjudication had to be given to every other party to the contract and as there was an assignment and not a novation this has not occurred. RL noted that WPL was in voluntary liquidation at the time but it had now been struck off the register and dissolved.

HHJ McCaihill QC considered the evidence in relation to the negotiations and dealings between the parties prior to commencing works on the Summerwood property and held that the materials terms as to payment, being the trigger event that marked completion, the time for payment of invoices and variations to the invoice payment procedure, were agreed between the parties. This agreement was via expressly agreed oral terms that were not recorded or evidenced in writing, and as such they did not satisfy the requirements of Section 107 HGCRA.

HHJ McCaihill QC noted that on this basis it was not necessary for a decision to be reached in relation to the assignment point raised, but in any event HHJ McCaihill QC decided to express a view as to whether this argument would have succeeded. The Court noted that on the evidence it would have held that an assignment took place on 24 May 2004. In relation to the argument as to whether an assignee is entitled to invoke the adjudication process the Court did not comment, as this was an issue which it determined needed further consideration.

In relation to the final point, being whether service had been correctly affected as WPL was struck off and did not receive notice of the proceedings, the Court noted that a company could be restored to the register but did not regard the failure to do this as fatal. The issue as to whether there was in fact an assignment or novation was not considered as it was noted that an analysis of the facts would need to be fully undertaken for determination on this point.

Many thanks to Martin King of Castons and Corbett Haselgrove Spurin of Nationwide Academy of Dispute Resolution UK Ltd for supplying copies of the approved judgment and judgment respectively.