Pegram Shopfitters Limited v Tally Wiejl (UK) Limited
Friday, 14 February 2003
Key terms: Construction contract - disputed terms - section 108 - the Scheme
Pegram carried out refurbishment works at a new retail store for Tally Wiejl on Oxford Street. Following practical completion, disputes as to the value of the work arose and Pegram referred the matter to adjudication and were awarded the sum of £95,483.78 plus interest and the adjudicator's fees.
Tally Wiejl declined to pay on the grounds that there was no construction contract between the parties or if there was a contract, that the contract was different in content to the construction contract found to exist found to exist by the adjudicator.
HHJ Thornton QC found it was clear that both parties contended that there was a written construction contract. However, Pegram claimed that it was one based on its own conditions of sale whilst Tally claimed that it was one based on the JCT prime cost Standard Form of Contract 1998 and hence that the rules that should be followed in the adjudication were those set out in the JCT rules. There were no adjudication provisions in the Pegram standard terms and so if Pegram were correct, the Scheme would apply.
Here, HHJ Thornton QC found that the parties had entered into a construction contract in such a way that it terms were not clearly and unquestionably capable of being identified. The reason was that negotiations consisted of a series of offers and counter offers. No complete set of contract documents was identified. Therefore the parties had not produced a construction contract whose terms enabled the party to give notice at any time of the intention to refer a dispute to adjudication. In the circumstances, section 108 of the HGCRA provides that the Scheme shall apply. Therefore, it was correct that the Adjudicator had been appointed under the scheme and applied the scheme in the adjudication. There was no complete contractual documentation setting out the parties' rights to give notice of referral of a dispute to adjudication. Therefore the mandatory requirements for section 108 of the Act had not been complied with and the Scheme applied.
Note also that care must be taken when adopting a position in adjudication proceedings. Tally had in the adjudication accepted that there was a contract in being for the refurbishment of work out at the defendant's retail clothing stall and accordingly Tally was estopped from resiling from that position in the enforcement proceedings.
Tally Wiejl declined to pay on the grounds that there was no construction contract between the parties or if there was a contract, that the contract was different in content to the construction contract found to exist found to exist by the adjudicator.
HHJ Thornton QC found it was clear that both parties contended that there was a written construction contract. However, Pegram claimed that it was one based on its own conditions of sale whilst Tally claimed that it was one based on the JCT prime cost Standard Form of Contract 1998 and hence that the rules that should be followed in the adjudication were those set out in the JCT rules. There were no adjudication provisions in the Pegram standard terms and so if Pegram were correct, the Scheme would apply.
Here, HHJ Thornton QC found that the parties had entered into a construction contract in such a way that it terms were not clearly and unquestionably capable of being identified. The reason was that negotiations consisted of a series of offers and counter offers. No complete set of contract documents was identified. Therefore the parties had not produced a construction contract whose terms enabled the party to give notice at any time of the intention to refer a dispute to adjudication. In the circumstances, section 108 of the HGCRA provides that the Scheme shall apply. Therefore, it was correct that the Adjudicator had been appointed under the scheme and applied the scheme in the adjudication. There was no complete contractual documentation setting out the parties' rights to give notice of referral of a dispute to adjudication. Therefore the mandatory requirements for section 108 of the Act had not been complied with and the Scheme applied.
Note also that care must be taken when adopting a position in adjudication proceedings. Tally had in the adjudication accepted that there was a contract in being for the refurbishment of work out at the defendant's retail clothing stall and accordingly Tally was estopped from resiling from that position in the enforcement proceedings.