Simon Arnold, instructed by Jan Rzedzian of Hay & Kilner LLP, acted for the successful claimant Farad Maftoon in High Court declaratory relief proceedings.

The issue for the court to resolve was whether Mr Sayed (the First Defendant) had contracted with Mr Maftoon for building and fit out works at a restaurant in Yarm in his personal capacity or as agent for Lebaneat (Yarm) Limited, the Second Defendant.

In an earlier adjudication brought by Mr Maftoon against Mr Sayed  a jurisdictional argument was advanced  that Mr Sayed had entered into the building contract in his capacity as a director of the Second Defendant, rather than personally and consequently the adjudicator did not have jurisdiction to decide the dispute and should resign.   The adjudicator was swayed by Mr Sayed’s submissions and consequently resigned.  

The scene was set:  did Mr Sayed contract personally or as an agent for the Second Defendant? That was the issue for the court to resolve on a Part 8 basis.  In a comprehensive judgment handed down on 7 July 2020 HHJ Davis-White QC agreed with the Claimant’s submissions and found that Mr Sayed had contracted with Mr Maftoon personally.

In just shy of 11 weeks the court gave directions for determination of the issue, held a remote Skype trial, and delivered judgment notwithstanding the challenges the court and judiciary face with the ongoing pandemic. 

This judgment is a useful illustration that the court can quickly and cost effectively resolve issues which may flow from adjudications or other Business and Property Court matters using the part 8 procedure to order declaratory relief.

Especially with the prevailing economic uncertainty a party may be tempted to assert that the contracting entity was a limited company in attempt to avoid personal liability.  Any such approach can be readily resolved – as this case demonstrates – and unmeritorious arguments swiftly despatched.

Jan Rzedzian of Hay & Kilner LLP said:  “In any commercial situation, it is essential for all parties to fully understand the roles that they are playing right from the start if they want to avoid confusion and potential problems further down the line.

This is particularly important for individuals with a number of roles within a given project, who need to make extra sure that they do not leave any room for doubt about the context within which they are acting.”

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