Birse Construction Ltd v St David Ltd (No. 2)
Citation: 78 Con LR 121 (TCC)
Nature of case:
Birse, the contractor, was engaged by St. David, the developer, to carry out work on luxury apartments in the Cardiff Bay development. The parties had agreed to proceed with the project on a partnering basis. The JCT form of contract discussed was never signed. Following a number of disagreements which led to Birse leaving the site and commencing an action for payment, the court had to consider whether the parties had reached a concluded contract in the course of their negotiations and dealings.
The Court of Appeal in Birse Construction v St. David (No 1) had ruled that the parties had not agreed that this issue should be resolved by affidavits and had remitted the matter to be decided on the factual evidence. In the result, the deputy judge held that the parties had, at the material times, acted towards each other as if the contract was still in the course of negotiation. The conclusion was therefore that no contract had been formed. It followed that St. David could not rely on the arbitration clause in the unsigned JCT form and its application for a stay of Birse’s proceedings pending arbitration would therefore fail.
