Identity of Contracting Parties – again

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Donald Insall Associates v Kew Holdings Limited [2019] EWHC 384, BLM 2019 TCC

Facts

Mr Brothers was a Director of Kew Holdings.  He contacted Donald Insall Associates (DIA) and asked them to provide him with architectural services in connection with works at a property known as “King’s Observatory” in the Cayman Islands.  He wanted the building to be turned into a residential dwelling which he would then occupy.  DIA sent a fee proposal to Mr Brothers in for £173,000 of unpaid invoices and started work shortly afterwards.

Mr Brothers signed the fee proposal on 14 October writing the words “confirmed: Kew Holdings Limited” and his signature, beneath which he wrote “RGF Brothers, director.

Various fees were invoiced by DIA; some were paid by Mr Brothers and some were paid by Kew Holdings Limited (“Kew”). Later Mr Brothers asked for all invoices to be addressed to him personally for VAT reasons.  DIA were not paid, and went to adjudication against Kew for £173,000 of unpaid invoices.  Kew denied the existence of a contract but the adjudicator ruled against it and decided that it should pay DIA £173,000.  Enforcement proceedings were brought.  Kew continued to deny that there was a contract between it and DIA.

Held

Although DIA sent a fee proposal in July and started work shortly afterwards, the fact of their negotiating meeting in October was evidence that a contract had not as yet been formed.  Further the meeting of 14 October was identified by the Court as the critical point at which offer and acceptance had coincided, and there had been contractual intention on both sides. Thus an agreement had been concluded at that point, between DIA and Kew – Mr Brothers had made clear he was acting on behalf of his company and not in his own right.

Comment

In this robust and sensible judgment, the Court dealt with a common problem where the parties form a contract at some point in a series of confusing and conflicting communications.  The key problems are identifying contractual intention and identifying the point at which an offer (or counter-offer) is accepted.

Normally, one sees individuals trying to off-load contractual liability on to a limited company.  It is rare for a limited company to seek off-load the liability on to one of its directors.