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Blowing Hot and Cold

KIM FRANKLIN

It is easy to lose sight of the fact that many construction disputes have less to do with buildings

than with the rights and obligations of those who build them. This is why lawyers who have noconstruction background still end up specialising in project work. (Although it has to be said that,after practicing construction law for a decade or two, you end up knowing more about the industrygenerally, and drains in particular, than do most people.) Conversely the absence legal trainingdoes not prevent the industry from expressing a view on the law, particularly when things start tolook contentious.

But it is a minefield out there, especially now that many forms of dispute resolution depend uponthe nature of the agreement entered into between the parties. In the old days it used to becommon enough for a contractor to refuse to pay a sub-contractor on the grounds that there wasno concluded contract. The same contractor would now regret such a stance if they subsequently

wanted to refer a dispute, for example over contra charges, to adjudication. Without a contractthere is no right to adjudicate. Could they do a nifty U-turn whilst, with uncharacteristic modesty,professing their new found ignorance of matters legal?

This question was considered in the recent case of Redworth v Brookdale Healthcare Limited(Judgment 31.7.06). The claimant contractor agreed to build a care home for the defendantemployer for 4.5m. No contract was executed but all appeared to go well until the conclusion ofthe works when the parties fell out over delay, defects and damages. As the temperature wasraised, Redworth sent a heated letter denying the existence of a design and build or any form ofcontract. A few months later, however, Redworth referred the dispute to adjudication claiming thatthe contract incorporated the JCT standard form of Design and Build contract. At Brookdales

request the adjudicator was called upon to reconcile Redworths apparent schizophrenia. Theadjudicator dismissed Redworths original position as a knee jerk reaction, found that there was acontract entitling Redworth to adjudicate and ultimately awarded them 200,000.

In court Redworths Mr Roberts sought to explain away the no contract letter as lashing out as aresult of pure anger and frustration. He concluded, I knew it was wrong when I wrote it. TheJudge accepted that Roberts was angry but still found him to be rational and coherent. Hepointed out that Redworth were blowing hot and cold over the existence of a contract, or, as we

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lawyers would say trying to approbate and reprobate their argument. This was not permitted.Redworth should be held to their election and not allowed to resile from it. The judge concludedthat there was no contract in writing, that the adjudicator had no jurisdiction and that Redworthwere not entitled to the sums awarded.

So next time, think twice before lashing out. Phone a friend. Phone your lawyer. Or you may beheld to your election.