Mast Electrical Services v Kendall Cross Holdings Ltd

Mast, a sub-contractor issued proceedings against Kendall for declarations that the sub-contract arrangements in respect of three construction projects in Newcastle were contracts in writing for the purpose of section 107 of the HGCRA. Kendall had been seeking to sub-contract the electrical work and had accepted tenders from the Mast, who then provided a revised quotation based on comparable properties to those on which it would be working. These rates were accepted by Kendall in principle. Specific quotations were submitted at a later date. Disputes arose between the parties over what rates, if any, had been agreed. Mast eventually ceased work on the site due to the disputes over the agreed rates. Mast commenced adjudication in respect of one project. Kendall said that there was no contract in writing between the parties and therefore the adjudicator lacked jurisdiction. The adjudicator agreed and resigned. Accordingly, Mast sought a declaration from the court.

Mr Justice Jackson, although he said that he had some sympathy with Mast's position, (as Mast had been permitted or even invited to start work before rates had been agreed), nevertheless held that the documents relied upon by Mast did not satisfy the requirements of section 107. They failed to set out or record all the material terms of the sub-contract, particularly in respect of any agreed rates of payment. Accordingly it was highly probable that there was no contract at all between Mast and Kendall. As a result, Mast was not entitled to the declarations sought and was unable to refer the payment disputes to adjudication. Whilst, Mast may have been entitled to refuse to start work before all contractual terms had been agreed and recorded, commercial pressures overrode legal considerations. In the words of the Judge, “the parties decided to get on with the project and hope for the best.” All the Judge could offer, was to see if any litigation that Mast might decide to bring could be expedited.