Hatmet Ltd v Herbert (t/a LMS Lift Consultants)

"(b) If the agreement is made by exchange of communications in writing, or (c) if the agreement is evidenced in writing." 18 I have been taken to the decision of the Court of Appeal in RJT v DM Engineering [2002] BLR at page 217 and to the decision of His Honour Judge Bowsher QC in Carillion Construction Limited v Devonport Royal Dockyard [2003] BLR at page 79 and I have been reminded of a judgment which I gave in a case called Lloyds Project Limited v Marlnick, an unreported judgment dated July 2005. 19 The defendant's case is that there is no construction contract within the meaning of either subsection (b) or subsection (c). Their case is that a contract was made orally in April 2004. There is, however, a difficulty with that submission in that Mr Herbert's own evidence contradicts that, as I have outlined. He says that he had to go back to Bouygues to check that they were happy with the price that was proposed. 20 The defendant's case is that there was no written evidence of the specification for the work to be undertaken. It was not clear, they say, what was contained in the mock-up to confirm the feasibility of the design. There was no indication in writing as to responsibility for the installation in the sense that there was no methodology and no design of the installation methods evidenced in writing. There was no agreement as to price as at 4 October 2004. The defendant proceeds on the basis that there was an agreement but not all of the important matters, they submit, were recorded. 21 The claimant put forward a revised price in its letter of 17 November but there was no agreement as to the revised price and that, Miss Gillies submits, was fundamental to a contract of this sort. Miss Gillies submits that the mock-up is vital in this context. It formed the basis of the discussions as to what was to be done and at what price. All of those matters are missing from the written records upon which the claimant seeks to rely. In relation to the mock-up I should just add that it may be that there is more than one mock-up but that is not material to this decision. The claimant's case is that a contract was made by exchange of communications in writing, as section 107.2(b) provides, alternatively, that the documents evidence a construction contract within the meaning of 107.2(c). 22 I am persuaded by Mr Lee's submissions that a contract was made in writing in April 2004. That appears from Mr Borner's evidence, which itself is supported by the reference in the letter of 28 September 2004. A sketch indicating the scope of the work to be undertaken had been prepared and was in existence at the relevant time, even if it cannot now be found, and, of course, there was the defendant's purchase order. 23 One finds in these documents, in my judgment, a sufficient definition of the scope of the work to be undertaken and the price and indeed the document in the purchase order records the time period during which the work was to be carried out. It is a simple contract but the elements which the parties had discussed were present. In my judgment, there was no need and no requirement for the documents to spell out terms as to methodology or design of the installation methods. It was clear on the face of the purchase order that the claimant had an obligation to fit the ceilings. It is, in my judgment, a question of construing what was meant by that phrase and no doubt if it is relevant for that to be done reference will be made to what is said in the purchase order. 24 During the summer of 2004 drawings were prepared, as I have outlined. On 4 October the claimant sent the approved drawing. The facsimile enclosing that makes a specific reference to these being approved drawings issued to the claimant by Bouygues. By that fax the claimant expressly asked the defendant how they were to proceed. The inference must be from that facsimile that the question that was being asked was: should they proceed in accordance with the scope of work agreed in April or should they proceed in accordance with the varied work as set out in the approved drawing? Mr Herbert, for the defendant, gave as clear an answer as one could expect to see in his e-mail of 4 October. He said: "Please proceed urgently with the manufacturing of the ceilings incorporating the architect's comments." [Judge’s note: unable to check the wording] 25 As I have said, the facsimile of 4 October had annexed to it the drawing referred to. There was certainty as to what was to be built. But Mr Lee submits that there are two possible ways of viewing the question of the increase in price. One possibility is for the court to conclude that the defendant accepted that it would proceed on the basis of the revised price which the claimant envisaged would be set, as can be seen in the 17 November letter. In my judgment, that would not arrive at a position where there was sufficient certainty between the parties as to what was to be paid or how that matter was to be resolved. 26 The second proposition which Mr Lee puts forward is that the Sale of Goods Act 1992 at section 15 provides a mechanism by which the price will be determined, that section, of course, providing that where under a contract for the supply of a service consideration is not determined, and so on, then there is an implied term that the party contracting with the supplier would pay a reasonable charge. In my judgment, that must be the appropriate mechanism to operate in this case. 27 In my judgment, therefore, there is sufficient exchange of written communications between the parties to amount to an agreement made by exchange of communications in writing, as section 107.2(b) requires, or at the very least such as to evidence the agreement in writing, as section 107.2(c) requires. 28 It is not suggested by either Mr Herbert or Mr Borner that terms were discussed or agreed between them orally which were not recorded in writing and that, of course, is one of the essential differences between this case and the RJT case. The Marlnick decision does not assist me here. In that case it was said that there were many significant matters which the parties had agreed orally but which had not been reduced to writing; that is not the case here. 29 Mr Lee has made submissions as to section 107.6 as to whether the mock-up, or one of the mock-ups if there were more than one, could amount to a record within the meaning of the Act. It is not necessary for me to decide that point in relation to this case and I think that that interesting question will have to await another case. 30 In all the circumstances I conclude that there was an agreement in writing, as section 107 requires. The defendant has failed to persuade me that the claimant has no real prospect of succeeding in demonstrating that the adjudicator had jurisdiction to make the decision that he did, given that there was a construction agreement .