Hillcrest Homes Ltd v Beresford and Curbishley Ltd
Citation: [2014] EWHC 280 (TCC)
Background Facts​
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A luxury residential property at Sleepy Hollow, Prestbury, under a JCT Design and Build Contract (2005 Edition).
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Structural engineer Howard Taylor Associates (HTA) had been appointed by Hillcrest before the building contract.
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The contract required that HTA be novated (transferred) to B&C so that B&C would assume responsibility for structural design.
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HTA did not sign the novation agreement until after practical completion, and B&C refused to sign it at all.
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B&C alleged that Hillcrest misrepresented that novation had been agreed, leading B&C to enter into the contract.
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B&C commenced adjudication claiming negligent misstatement (misrepresentation) and seeking declarations that novation had not occurred and that the novation deed was void.
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The adjudicator ruled in B&C’s favour, finding Hillcrest made a negligent misstatement and that there was no effective novation.
​Judgment
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Jurisdiction and scope:
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The court held that the adjudicator lacked jurisdiction to determine claims of misrepresentation under the Misrepresentation Act 1967 as these did not arise "under the contract" (Article 7).
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​
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Multiple disputes:
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The court found that B&C had improperly referred more than one dispute to adjudication without consent, contrary to Article 7.
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Natural justice:
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The adjudicator determined the validity of the novation agreement on a legal basis not argued by either party, breaching natural justice.
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​
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Final determination on novation:
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The court concluded there was no effective novation of HTA to B&C:
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The Employer’s Requirements envisaged novation at the time of the building contract.
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HTA signed only after practical completion.
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Execution by all three parties (Hillcrest, B&C, HTA) as a deed was required but never completed.
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​
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Outcome:
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The adjudicator’s decision was unenforceable.
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Hillcrest was not entitled to its declarations.
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B&C had not wrongfully refused to sign the novation agreement.
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General Principles Developed
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Scope of adjudication ("arising under the contract"):
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Claims for misrepresentation under the Misrepresentation Act do not fall within "arising under the contract" adjudication clauses, distinguishing such claims from contractual claims.
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Single dispute requirement:
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Only one dispute can be referred to adjudication unless the parties consent; multiple disputes without consent render an adjudicator’s decision unenforceable.
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Natural justice in adjudication:
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An adjudicator must not decide a case on grounds not argued by the parties; doing so is a material breach of natural justice.
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Novation formalities:
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For novation to be effective, there must be clear tripartite agreement, and if contemplated as a deed, all parties must execute it as such.
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Timing and conditions set out in contract documents are critical.
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​
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No implied breach or estoppel:
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A contractor is not automatically in breach for failure to procure novation unless expressly required by contract.
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Estoppel arguments require clear representations and detrimental reliance, which were not found here.
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