Should English Courts be the jurisdiction for Jersey JCT building contract disputes?

It's not often that the Jersey Court hears a dispute relating to a building contract, but an interesting case came before it recently, brought by Sharon Campbell against Cape Construction Limited.

In this case, the parties entered in to a JCT Minor Works contract dated April 2012 in which Cape contracted to build a new house for Ms Campbell. As is the norm, the contract was amended to take account of what are commonly known as "the Jersey law amendments", including changing reference to VAT to GST and stipulating that the contract is subject to Jersey law instead of English law.

The build progressed but Ms Campbell alleged that the house was defective and that Cape had failed in certain material respects. She therefore brought proceedings against Cape for damages.

In reply, Cape submitted that she was wrong to bring the matter to the Jersey Courts because notwithstanding that it specifically prescribed reference to Jersey law, with the contract stating: "Subject to Article 6 and (where it applies) to Article 7, the English Court shall have jurisdiction over any dispute or difference between the parties which arises out of or in connection with this contract."

The Jersey Court therefore had to decide on the impact of such clause: should the dispute be held before the English Courts, but applying Jersey law, or was this jurisdiction clause non-exclusive, such that Ms Campbell could choose to bring proceedings in Jersey?

Evidence revealed that neither party had given this clause much thought before signing the contract.

Ms Campbell asserted that Jersey was the obvious jurisdiction given it was where the parties and the property are located and the contract was governed by Jersey law. Cape contended that nevertheless, the contract clearly provided that English Courts were to have jurisdiction and the terms of the contract should be observed.

The Court, after careful analysis, concluded that when agreeing the form of contract, it was clearly important to both parties that it worked as a matter of Jersey law and that it would have been 'wholly unsurprising' to see reference to the Jersey Courts having jurisdiction.

Having considered the disputed clause, the Court determined that, at best, it allowed the parties to bring proceedings before English Courts, but that this was not a requirement, and it did not confer exclusive jurisdiction to the English Courts, especially given they had no apparent nexus to any other aspect of the contract or its performance. Ms Campbell was therefore granted permission to continue her action before the Jersey Courts.

So, what should developers learn from this? That careful consideration of a building contract is crucial before signing. Repetitively inserting standardised "Jersey law amendments" without analysis of the particular facts of the project and without checking every aspect covered may lead to uncertainty, dispute and a contract with a very different construct than intended. It's like the safety demo on a plane: just because you've seen it many times, doesn't mean you shouldn't still pay close attention!