Goldsworthy & Ors (t/a Goldsworthy Builders) v Harrison & Anor

This is an application for summary judgment to enforce a decision made by an adjudicator of a construction dispute. By a corrected decision dated 22 April 2016 the adjudicator decided that the defendant homeowners were to pay to the claimant builders the sum of £72,400.25, plus any applicable VAT, as interim payments due under a building contract, inclusive of interest at 5.5% per annum up to the date of the decision, with further sums as continuing interest and reimbursement of the adjudicator’s fee.

The defendants were residential occupiers, so there was no statutory requirement for adjudication.

The primary issue between the parties is whether they had agreed contract terms which contained an adjudication clause. If they did not, the adjudicator had no jurisdiction. If they did agree contract terms containing an adjudication clause, there is a secondary argument arising from the issue of a final certificate.

Since this is a summary judgment application, I can only decide the application in the claimants’ favour if I conclude that the defendants have no real prospect of successfully defending the enforcement claim and that there is no other compelling reason for a trial (CPR 24.2). The claimants submit that the position is clear because the relevant material is all in writing. My principal conclusions are in paragraphs 85-86 below.

The claimants’ case is that the parties agreed, and proceeded on the basis that, the JCT Minor Works terms (MW 2011) were to apply, and that these terms contain a provision for adjudication, which was therefore incorporated into the parties’ contract.

The defendants’ case is that, although the parties expressed an intention that they would enter into a Minor Works form of contract the parties did not do so because they never reached final agreement on the terms of such a contract. Instead, the work proceeded under an informal agreement, which did not include an adjudication clause. Moreover, the defendants say that the parties’ conduct is not consistent with a concluded agreement that the MW conditions should apply, because the payment mechanism that was actually followed was not the same as in the MW contract. As an alternative, even if the parties incorporated the MW terms which regulated the work, they did not incorporate the adjudication clause.

The secondary issue is a contention that the adjudicator had no jurisdiction to decide on the dispute over interim payments, because that dispute was overtaken, during the adjudication, by the issue of a final certificate, and by a statement of account issued by the claimants themselves, showing a balance due of only £8,661.46 plus VAT.

At the time of the works the current edition of the standard form Minor Works Building Contract was MW 2011. This consists of Articles of Agreement (Recitals, Articles and Contract Particulars), Conditions, and three Schedules. The Articles contain various blanks to be filled in by the parties. At the end there are printed Guidance Notes.

There are three kinds of blanks and other optional elements in the Minor Works form:

Article 6 states:

Clause 7.2 of the Conditions states:

The ‘Scheme’ is the statutory scheme for adjudication applying to construction contracts.

The provision for adjudication in the Contract Particulars is the first kind of option, ie, a default option. Where the parties do not select a named adjudicator or any particular nominating body, the body to nominate the adjudicator is to be any one of five bodies listed, as may be selected by the party requiring the reference to adjudication.

Guidance Note 7 states:

The MW Conditions make provision for interim payments in clause 4 on the following lines:

The Minor Works form contains provisions for a defined completion date, for the grant by the contract administrator of extensions of time for completion for reasons beyond the control of the Contractor, and, in the event of failure to complete by the original or any extended date for completion, for the payment by the Contractor of liquidated damages at a rate stated in the Contract Particulars.

The provisions of the Minor Works form constitute a carefully designed package which, when properly filled in, sets an agreed balance of costs, liabilities and risks. This feature needs to be kept in mind when considering whether an incomplete Minor Works form constitutes a binding contract. When parties intend that they will contract on a Minor Works form, but fail to complete it, the Court needs to be wary of imposing on them a less complete contract, with a different balance of risks partly reflecting the Minor Works form and partly inconsistent with it: a contract which, if asked, they would not have agreed to. However, this does not prevent a finding, if justified by the evidence, that the parties did in fact choose to bind themselves contractually on the basis of an incomplete package.

The defendants appointed Gryffydd John Ringe Architects Ltd (‘GJR’) to act for them. On 27 October 2011 GJR sent to the claimants a proposed schedule of works to the main roof of the claimants’ house. This identified the defendants as the Employer and GJR as the contract administrator. The Contractor was to provide a programme, but no duration was specified for the works. The schedule included a term which provided:

On 23 November 2011 the claimants provided a quotation for the roof works in the sum of £26,945 exclusive of VAT.

The project did not proceed at that stage because of delays in obtaining necessary approvals and the like.

The claimants were subsequently asked to quote for some further works, involving some demolition, a new garden access, and three trial pits; and they did so in writing on 15 August 2012, proposing the further sum of £21,919 exclusive of VAT.

Up to this point there was no mention of MW terms.

The evidence is not clear as to exactly when work began, but it appears possible that it was in about late October 2012. It seems that there must have been discussions about acceptance of the existing quotations and about further extending the works so as to include a major programme of alterations to the house. On 30 October 2012 GJR emailed the claimants, stating-

There are no contemporaneous written details of the discussion, referred to in this email, about the use of the MW form of contract. Nor is the discussion specifically described in any of the witness statements that have been served.

By a further email, also on 30 October 2012, GJR sent a schedule of works ‘as a general guidance for work’ to the house, adding-

It seems that architects’ drawings were also provided, in addition to the schedule. The schedule contains items listed from 1 to 49, and these numbers correspond with numbers on architects’ drawings.

It can be inferred from the documents that at some point before 6 November 2012 GJR orally instructed the claimants to proceed with at least some part of the works for which the claimants had quoted, because GJR’s email of 6 November 2012 to the claimants refers to 90% of the demolition element having been carried out and confirms some site instructions concerning works then being carried out.

The email of 6 November 2012 begins:

The email then sets out various works and prices totalling around £58,000 in all. The sums include the £26,945 for roof works from the quotation dated 23 November 2011, an allowance of £1,000 for a second chimney, additional costs of £8,833 for various stated items including slates and scaffolding, and £21,666 for windows and dummy door to front elevation. The source of the figures £8,833 and £21,666 is not apparent; presumably the claimants had provided further quotations. Confusingly, despite the phrase ‘the “contract” to date is therefore as follows’, and despite the fact that demolition was 90% complete, the email makes no express mention of the demolition quotation dated 15 August 2012 for £21,919.

After setting out the figures, the email continues-

It can be seen that the interim payment arrangements for these initial works were different from those in clause 4 of the MW Conditions. They were to be based on monthly invoices (not on a four-weekly cycle of valuations), the final date for payment was to be 14 days from certificate (not 14 days from the calculated ‘due’ dates), and there were to be no retentions.

Taking the emails of 30 October 2012 and 6 November 2012 together, it can also be seen that, while the agreed works were to be carried out initially on a relatively informal contractual basis, it was envisaged that, if agreement were reached on further, more substantial works, this would be on the basis of MW terms, including the application of retentions to interim payments.

According to a schedule attached to the adjudication referral notice, the claimants’ first invoice for works was dated 17 December 2012.

It seems that by January 2013 the defendants had decided that they wanted to proceed with extending the scope of works to include the garage, the summerhouse and the main works. On 4 January 2013 GJR emailed the claimants:

There then followed a list of 15 items. I note:

In February 2013 the claimants responded to the email of 4 January 2013 by providing a list of quoted prices. The list largely corresponds to the email, except that at least seven of the items are priced as provisional sums, and there is an additional item of £15,000 for sanitary ware. (I take this round figure for sanitary ware also to be provisional.) The grand total of the list is £526,689.21 excluding VAT.

Mr Ringe of GJR says in his witness statement, provided at the request of the defendants, that as at February 2013 it was his intention to invite the parties to sign up to a JCT Minor Works Contract and indeed the claimants indicated that they would be willing to do so, including making interim invoices subject to retention. Mr Malcolm Goldsworthy says in his witness statement, in reference to the provision of the February 2013 quotation, that he understood that, if the claimants were given the job they would be operating under the terms of the JCT Minor Works Contract.

On 28 March 2013 GJR emailed the claimants, stating-

Work proceeded, but formal documents were not signed, or perhaps even prepared at that stage. According to the schedule attached to the referral notice the claimants rendered invoices dated at the end of May 2013 and then at the end of every month from July 2013 to May 2014 inclusive, with the exception of February 2014. While the invoices are said to have borne month-end dates, in practice, according to the schedule, they were sent to GJR on a variety of actual dates, ranging from the day before the invoice date to the 21^st of the succeeding month. Mr Ringe’s witness statement gives valuation dates which differ from the invoice dates in the schedule.

By October 2013 there had been a significant number of variations, and there were concerns on the defendants’ side about the speed of progress and on the claimants’ side about outstanding information required in order to proceed with various items.

On 22 October 2013 the claimants commented in an email that, when in receipt of the contract documents, they would pass them to their solicitor for comment. Three days later the claimants had received the proposed documents, but what had been issued to them was a JCT Intermediate form instead of Minor Works. They emailed GJR taking immediate objection to this and stating that they had tendered on the basis of a JCT Minor Works contract, adding-

GJR responded on the same day:

On 19 November 2013 the claimants emailed to GJR. Only the header of the email is in evidence. It is possible that it was a query about how quickly payments should be made by the defendants. On the same day GJR replied:

This payment regime is consistent with the proposal in the schedule for the main roof dated 27 October 2011 if in that proposal the phrase ‘within 7 days of valuation’ is read as meaning ‘within 7 days of issue of valuation’. It is also consistent with the payment terms mentioned in the email of 6 November 2012. Further, it is consistent with the dates of certification by GJR, in so far as they are currently available in evidence (Footnote: ⁶), if the certification dates are compared either with the dates when the claimants’ invoice was sent to GJR according to the schedule of actual dates and payments or with the valuation dates stated in Mr Ringe’s statement, rather than with the dates said in the schedule to be stated on the invoice. The three interim certificates which are in evidence all show the date for final payment as being 14 days from the date of the certificate, in accordance with the email of 19 November 2013. This regime is in conflict with the payment regime in MW Condition 4.

On the three interim certificates which are in evidence there is a reference ‘GJRMW’ which indicates a Minor Works contract (at least in the mind of GJR, or at least potentially) and the ‘contract’ is said to be dated ‘11^th December 2012’. This date does not correspond with any documented date of agreement, and neither counsel for the claimants nor counsel for the defendants was able to shed light on why this date was stated.

In January 2014 GJR finally produced a completed MW form of contract for signature, dated as of 16 January 2014, with the contract sum filled in as £526,689.21 as per the February 2013 quotation. The contract documents included (a) a programme drafted by GJR indicating a completion date which the claimants considered had not been agreed and (b) drawings which the claimants were concerned were later revisions than the drawings on which the contract sum had been calculated. Elements filled in included the specifying of liquidated damages as being at the rate of £150 per week or part thereof. The completed form also proposed a rectification period of 6 months (in place of the 3 months default period), with a special 12 months’ period for mechanical and electrical works, and a minimum of £10 million for contractors’ liability insurance. After consulting their solicitor, the claimants ultimately declined to sign. The claimants did not put their reasons in writing, nor did they propose any amendments to the form.

Mr Ringe’s witness statement says:

Paragraph 13 of Mr Ringe’s statement is consistent with the documented history, but is only an indirect summary of a conversation, and what exactly Mr Goldsworthy meant is open to interpretations consistent with either party’s case. (Mr Goldsworthy’s own statement does not recount or comment on this conversation.) Paragraph 14 needs to be read in light of and subject to the actual history of the payment regime as set out above.

The last certificate issued by GJR was on 20 May 2014, which covered the April 2014 invoice. Payments by the defendants ceased in April 2014.

Emails show that as at 16 June 2014 GJR was intending to issue the practical completion certificate on the next day. Mr Ringe’s witness statement says that it was in fact issued. If so, it is not currently available in evidence. A proposed email from GJR to its own clients, the defendants, stated-

The email also refers to an outstanding invoice, owed to the claimants, being considerably overdue. It is apparent from the full terms of this email that GJR was advising its client both to pay the claimants’ invoice 17/14 which GJR had certified on 20 May 2014 and to pay half of the retention amount on the basis that the works had reached practical completion. Mr Ringe states that the reference to a Minor Works contract dated 16 January 2012 was a mistake.

In an email of 22 July 2014 the defendants’ solicitor reported the claimants’ then solicitor (Mr Symons of Gilbert Stephens LLP) as having said on the telephone that-

Mr Symons’ own account of this call, in his witness statement, includes his giving the reason for refusal to sign as being the inclusion of the requirement for liquidated damages and the revised programme.

In August 2014 GJR was replaced as contract administrator by K M Eke Development Services (Mr Kevin Eke).

The adjudication claim was launched by a notice of adjudication dated 18 March 2016. The claim was for the balance based on the last certified sum (subject to a small adjustment for over- and underpayments on previous certificates), plus amounts in four further invoices, being the invoice at the end of May 2014 and three further invoices in June 2014. Out of these four invoices, one was for the release of the first half of the retention, and two of them were, according to the adjudicator, for works done under a separate contract, so were excluded from his decision.

On 22 March 2016 Mr Eke issued a final certificate, accompanied by a final account statement which considerably reduced the value of the works and showed a corrective balance due from the claimants to the defendants. Like the interim certificates, the final certificate showed the contract date as 11 December 2012.

The final certificate contained the words ‘This certificate is issued in accordance with clause 4.8.1 of the above mentioned Contract’. This would be the correct clause number for a final certificate issued under form MW 2011. The defendants’ solicitors also referred to this in a letter of 22 March 2016, thereby asserting the relevance of the MW form. The defendants’ solicitor has explained that these two references to clause 4.8.1 derive from him, dating from a period when he had seen the apparently completed MW contract on file but was unaware that the claimants had declined to sign it.

The claimants responded on 24 March 2016 by issuing a pay less notice, stating that they would pay nothing against the ‘purported final certificate’, and showing their own calculation on a statement of account. This showed an anticipated final account of £708,050.58, with ‘payments claimed to date’ standing at £699,389.12, leaving a further balance of £8,661.46 to be claimed.

On 31 March 2016 the defendants’ solicitors wrote to the adjudicator stating that they had obtained their clients’ instructions and that there was no intention on their clients’ part to be bound by the terms of the JCT Minor Works Contract 2011. On that basis they took the objection that there was no adjudication agreement in force between the parties, given that the defendants were residential occupiers.

The adjudicator decided to proceed. He issued his decision initially on 17 April 2016 and corrected his figures on 22 April 2016. In his decision he said that the disputed final certificate lacked evidence to substantiate the figures in it and that he therefore gave it little weight.

On 24 May 2016 Mr Eke issued a different final certificate, after consideration of the claimants’ statement of account dated 24 March. This now showed a balance due to the claimants of £5,015.51 excluding VAT. It was not accompanied by a breakdown of the calculation. (Footnote: ⁷) According to the defendants’ solicitor the reason for Mr Eke’s large alteration to the certificate was that there had been ‘a misunderstanding over the very complicated VAT position’.

On 25 May 2016 the claimants commenced the present proceedings.

According to the defendants’ solicitor the defendants were not personally aware of the proposed figure of £150 per week for liquidated damages or of the adjudication process as included in the Minor Works form until relatively recently. Mr Ringe’s statement says that, since the claimants were not willing to be bound by the terms of the standard form, he never got as far as explaining the terms to his clients and obtaining their agreement to them. Since he filled in the form and gave it to the claimants for signature, it may be doubted whether he ever actually intended to do so. However, it is not in dispute that GJR was the defendants’ agent at the material times, or that such agency extended to binding the defendants contractually.

I accept that an adjudicator’s decision must be made on the basis of the facts as they are at the time at the time of the decision. If a final certificate is issued during the adjudication, depending upon what the adjudicator has been charged to decide, it may have to be taken into account as impacting on the parties’ dispute. This may in particular be the case if the certificate stands unchallenged. Here, however, the final certificate was immediately disputed by a formal notice and by provision of the claimants’ calculations for the final account. Accordingly I consider that the adjudicator was entitled to treat it as of little weight.

I also reject the defendants’ argument that the claimants’ statement of account showing a balance of £8,661.46 had the effect of negating or reducing the existing dispute between the parties which the adjudicator was required to decide. This stated balance was an additional balance, yet to be claimed. Rightly understood, as Mr Eljadi lucidly explained, the claimants’ statement of account did not support any reduction to the amounts claimed in the adjudication.

The difficulty of analysis that arises in this case is similar to that in many other cases where parties have proceeded with works without fully formalising the terms of their legal relationship. The difficulty arises simply because the parties have not clearly expressed and formalised their position, so it becomes necessary to analyse unclear expressions and make the best sense of them that one can. For example, in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] UKSC 14, [2010] 1 WLR 753, the High Court found that a contract had been concluded which excluded the standard form conditions which had been proposed, the Court of Appeal disagreed, finding that there had been no contract, and the Supreme Court disagreed yet further, concluding both that there was a contract and that it included the standard form conditions.

At [45] the Supreme Court stated:

The Supreme Court’s discussion of these general principles at [46]-[56] includes the further propositions that-

It follows from the second of these propositions that it can be appropriate to look at the parties’ conduct for the purpose of determining whether and how a contract was made.

As Mr Eljadi rightly submitted, the conduct of the parties after the contract has been made may also be very relevant to an inquiry whether a particular term was or was not agreed: Great North Eastern Railway Ltd v Avon Insurance plc [2001] EWCA Civ 780, [2001] 2 All ER (Comm) 526, [29], [36]-[37].

Mr Eljadi cited Harvey Shopfitters Ltd v ADI Ltd [2003] EWCA Civ 1757, [2004] 2 All ER 982, and Bryen & Langley Ltd v Boston [2005] EWCA Civ 973, [2005] BLR 508, for the proposition that, where the parties envisage the execution of formal documentation, this does not preclude a finding that a binding contract was nonetheless entered into, without such formal documentation being executed. In Bryen & Langley this had the effect that an adjudication clause contained in standard form contract terms was binding on a residential occupier. These two cases are in line with the subsequent guidance from the Supreme Court to which I have referred above.

Mr Stokell did not dissent from the principles relied on by Mr Eljadi, but submitted that the Minor Works terms were not incorporated into the parties’ contract on the facts of this case. As an alternative, he submitted that the Minor Works terms which were incorporated were only those required to govern the work and enable it to proceed. These did not include the adjudication clause, which was not necessary for that purpose, and which in the case of a residential occupier was an unusual and unnecessary clause which would need to be discussed in the light of paragraph 7 of the Guidance Note (set out above), and which, if so discussed, might be excluded by amendment of the standard terms. He referred to Twintec Ltd v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC), [2014] BLR 150, where the Court held that a letter of intent which referred to works being carried out ‘in accordance with’ the DOM/2 form of subcontract only incorporated the primary obligations relating to the work and not the secondary obligations such as the dispute resolution provisions. In my view this aspect of the decision in Twintec flowed from the interpretation of the particular wording of the letter of intent and does not establish any general principle. However it is right to say that the question whether dispute resolution clauses are effectively incorporated into a contract merely by reference to a set of terms found elsewhere has given rise to numerous disputes and differing results in decided cases, particularly in the context of arbitration (rather than adjudication) clauses.

It is ironic that the defendants, who for most of the period from October 2012 onwards envisaged and desired that the full works would be done under a Minor Works contract, now contend that this intent was never contractually agreed or implemented, whereas the claimants, who resisted signing the Minor Works form when it was offered and did not revert with any altered version said to reflect the parties’ agreement, now contend that the Minor Works terms were contractually agreed and governed the works.

My factual finding in paragraph 32 above, that as at 6 November 2012 the use of the MW form was envisaged for the full works, does not amount to a finding that there was a contractual agreement by the parties at that stage to use the MW form and bind themselves to the MW terms.

The claimants’ case on offer and acceptance is that the relevant offer was the claimants’ quotation in February 2013 and the contractual acceptance was GJR’s instruction to commence works in its email of 28 March 2013. The offer was made against the invitation in the email of 4 January 2013, which expressly referred to the need to fill in a JCT MW contract, and the acceptance referred to JCT MW as being the basis of the tender.

Without knowing what was said between the parties in March 2013, and without a better understanding of the then proposed works than can be obtained on a summary judgment application, I am not able to make a definite finding that the email of 28 March 2013 concluded a contract for the carrying out of the full works on Minor Works terms. In that email the instruction to commence refers expressly only to the works in reducing levels and building up the rear extensions. Based on the present evidence, the fact that party wall agreements are said to be in place may or may not mean that everything listed in the February quotation is to proceed. Further uncertainty is introduced by the sentence ‘Now that the roof work is under way and most unknowns are opened up I would like to ensure the figures firm up where we can.’ Depending on the tenor of the parties’ discussions, this might be taken to imply that figures may still be open to contractual negotiation, and does not clearly attest a binding agreement on the basis of the provisional sums. It may be right that the email of 28 March 2013 should be read as a firm acceptance of the February quotation, but on the present evidence I am not able to say definitively that it should be read in that way.

The reference in the email of 28 March 2013 to preparation of formal contracts for signature is similarly equivocal and could mean either that the parties were intending to formalise terms which they had already agreed or that they were not committing themselves to the Minor Works terms until signed. The reference to the tender basis as being Minor Works could mean either that the parties had agreed that the Minor Works terms would apply or that the tender price was on an assumption that the parties would in due course agree a Minor Works contract. Where no specific provision is made for contract duration or damages for late completion, the law is capable of supplying the omission by means of an obligation to complete within a reasonable time, carrying a right to unliquidated damages in the event of breach. But it is relevant to observe that a contractor’s price under a Minor Works contract may be affected by the speed with which works are required to be carried out (which would be defined by inserting a date for completion in the Contract Particulars) and by the rate of liquidated damages (which would be defined by insertion in the Contract Particulars). It is common ground that neither of those provisions had been agreed as at 28 March 2013.

The claimants rely additionally on the parties’ conduct after 28 March 2013 as showing that they regarded themselves as bound by the MW terms. They rely upon the formal certification of interim payments, with their heading ‘GJRMW’ and their method of calculation (consistent with MW Condition 4, including 5% retention). They rely also on the reference to the MW form in the email of 16 June 2014 concerning issue of the certificate of practical completion and on the reference in the final certificate to clause 4.8.1.

In my view, on the present state of the evidence these matters are equivocal:

Moreover, the claimants’ statement on 22 October 2013 that, upon receipt of the contract documents, they would pass them to their solicitor for comment, does not help the claimants’ case that the parties were already bound on Minor Works terms; and the issue by GJR of the Intermediate Form of Contract in October 2013, without prior discussion with the claimants, was a strange step if the parties’ understanding at that time was that they were already contractually committed to the Minor Works terms. While the claimants’ response (‘We would be happy if you could provide us with the JCT Minor Works contract discussed and agreed’) could be read as supporting the claimants’ case, it could also be read as referring merely to the parties’ common understanding that in due course a Minor Works form would be used for a formal contract between the parties. GJR’s reply ‘I guess we should be able to use minor works’ is far short of an admission that the parties were already contractually bound on MW terms.

Conversely, the facts that the parties agreed terms of payment inconsistent with the Minor Works terms and that they made no agreement on completion date and liquidated damages do not establish definitively that the Minor Works terms did not apply. The agreement could have been that the Minor Works terms should apply subject to an agreed amendment to the payment terms, and without any definition of the time for completion or any provision for liquidated damages. But there is no evidence of an express discussion to that effect. Moreover, as Mr Stokell submitted, if the general law is used to fill in the time for completion as a reasonable time and the remedy for lateness as a claim for unliquidated damages at common law, the result would at least arguably be a different kind of contract from the Minor Works contract which the parties intended they would enter into.

In all the circumstances, without fuller evidence from both sides, in particular of the discussions lying behind the emails (ie, between the claimants on the one side and GJR as representing the defendants on the other side), I find it impossible for me to say that there is not a triable issue on the question whether the parties did or did not reach a stage where they agreed with contractual effect to the application of the Minor Works terms, with gaps where particular options were not filled in or agreed.

For completeness I should mention that Mr Stokell raised some further points, which I do not consider had any real merit:

Had it been necessary for me to consider the defendants’ alternative contention that there was contractual agreement upon those parts of the Minor Works form governing the work but not upon the secondary dispute resolution provisions, I would not have accepted it. If the Minor Works terms were contractually agreed, there would be no sufficient reason in this case to exclude the adjudication clause. Given that the Minor Works terms were proposed for use by the architect representing the employers, there would be no reason to consider that an express discussion and agreement was required on whether the employers were to be bound by the adjudication clause.

The secondary challenge to the adjudication decision is rejected.

The primary challenge is more difficult to determine. Whether the application of Minor Works terms, and therefore of the adjudication clause, was contractually agreed is a borderline issue. It cannot be confidently decided without the full evidential picture. I am therefore not in a position to grant summary judgment to the claimants for enforcement of the adjudicator’s decision.

I reach this conclusion with a degree of regret. So far as the present evidence goes, the reasons given by the defendants for not paying the claimants’ invoices do not appear to justify particularly large reductions, and it is common ground that there is an outstanding balance due to the claimants in respect of the works. In theory the next step would be to proceed to a full trial of the issue of whether the parties’ contract included the adjudication clause. Such a trial would determine only the enforceability of the adjudicator’s decision. It would not finally determine how much money is owing from the defendants to the claimants in respect of the works. The parties may take the view that a better course, to avoid the risk of legal costs escalating on both sides in a manner disproportionate to the amount truly in dispute, would be to sit down and arrive at a fair figure for payment to resolve all their differences.

I wish to thank counsel on both sides for their clear and helpful skeleton arguments and oral submissions.

After the hearing I received written submissions from each side concerning the amounts of legal costs claimed. I did not specifically ask for, and hence did not receive, submissions on what costs order I should make if I found myself unable to definitively accept either side’s contention regarding the terms of contract and instead determined that there was a triable issue.

The defendants would no doubt argue that, the application for summary judgment having failed, the claimants should pay the costs of it. The claimants would no doubt argue that, while that would be a possible course at this stage, it might be seen at trial not only that the defendants were in the wrong but also that they only succeeded in staving off summary judgment by submitting incomplete evidence in opposition to the application, so that it would be unjust certainly for the claimants to pay the defendants’ costs of the application and possibly also for the claimants not to recover their own costs of the application from the defendants.

Since the latter possibilities cannot be ruled out, my provisional view is that I should not order payment of costs by the claimants to the defendants at this stage; the fair order is that the costs be reserved, so that the full picture can be taken into account by the trial judge, if a trial ever takes place. For the record, I do not consider on present information that the claimants acted unreasonably in making the application.

The parties should submit a draft order, giving effect to my decision, no later than 5pm on Tuesday 5 July 2016. If either party wishes to make further submissions regarding costs, so that I may reconsider the proposed order as to costs, these should be provided in writing, accompanying the draft order, and should not exceed three pages in length. This permission should not be read as an encouragement to the parties to make such submissions.