Rsl (South West) Ltd v Stansell Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
Judgment Date16 June 2003
Neutral Citation[2003] EWHC 1390 (TCC)
Date16 June 2003
Docket NumberCase No: HT-03136

[2003] EWHC 1390 (TCC)

IN THE HIGH COURT OF JUSTICE

TECHNOLOGY AND CONSTRUCTION COURT

QUEENS BENCH DIVISION

St. Dunstan's House,

133137, Fetter Lane,

London, EC4A 1HD

Before:

His Honour Judge Richard Seymour Q.C.

Case No: HT-03136

Rsl (south West) Limited
Claimant
and
Stansell Limited
Defendant

Sarah Hannaford (instructed by Davies and Partners for the Claimant)

Alexander Nissen (instructed by Masons for the Defendant)

JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN

H.H. Judge Richard Seymour Q. C. :

1

In this action the Claimant, RSL (South West) Ltd. ("RSL"), seeks to enforce against the Defendant, Stansell Ltd. ("Stansell"), the decision ("the Decision") of Mr. Brian Hinchcliffe, acting or purporting to act as an adjudicator, dated 19 April 2003. By the Decision Mr. Hinchcliffe determined that Stansell should pay to RSL within seven days the amount by which £381,572.98, plus Value Added Tax as applicable, exceeded the amount which had already been paid to RSL in respect of the project in relation to which the dispute referred to Mr. Hinchcliffe for determination had arisen. It was common ground before me that the sum already paid was £302,250 plus Value Added Tax, and that the whole of the sum of £381,572.98 attracted Value Added Tax, so that the sum payable by reason of the Decision, if it was valid and enforceable, was £93,204.50. It was also common ground that no part of that sum had been paid.

2

An application was made in the action on behalf of RSL for summary judgment for the sum which it was claimed was due, alternatively for:-

"an Interim Payment under Part 25.6 for any sum or part thereof due under the Adjudicators decision as the court may hold the Defendant liable to pay."

3

That application was resisted on behalf of Stansell. Mr. Alexander Nissen, who appeared as Counsel for Stansell at the hearing before me, contended that the Decision was not binding upon Stansell for three reasons. The first was that in reaching it Mr. Hinchcliffe had failed to comply with the terms of an agreement made with Mr. James Brydon of J. Brydon Associates Ltd., which company acted on behalf of Stansell in relation to the adjudication, by which Stansell agreed to the expressed wish of Mr. Hinchcliffe to seek assistance from Mr. Mark Adie in relation to programming issues which fell to be considered for the purposes of the adjudication. Mr. Hinchcliffe and Mr. Adie are in fact both senior consultants with the well-known firm, Messrs. E. C. Harris. The second reason put forward as to why Stansell was not bound by the decision of Mr. Hinchcliffe was that, so it was said, Mr. Hinchcliffe reached his decision in breach of the rules of natural justice. However, as I understand it, this was simply a different analysis from a legal point of view of the facts said to underlie the first reason. No separate matters were relied upon in addition to the contention that Mr. Hinchcliffe did not comply with the terms of the agreement to which I have referred. The third reason which was put forward as justifying the proposition that the decision of Mr. Hinchcliffe was not binding upon Stansell again seemed to be a different analysis in law of essentially the same basic facts, for it was that Mr. Hinchcliffe had wrongfully delegated to Mr. Adie the making of his decision in relation to extensions of time. That latter analysis did involve one more factual assertion, however, which was that Mr. Hinchcliffe simply adopted whatever conclusions Mr. Adie reached, without making any assessment of his own.

4

Stansell carries on business as a building contractor, while the business of RSL is that of structural steel fabricators and erectors. In 2000 Stansell was engaged upon a project ("the Project") at a site ("the Site") in Union Street, Bristol. For the purposes of the Project it was necessary that certain structural steelwork and staircases be fabricated and erected. In this judgment I shall refer to the fabrication and erection of that steelwork as "the Sub-Contract Works".

5

By an agreement ("the Sub-Contract") apparently dated 8 September 2000 and made between Stansell and RSL RSL agreed to undertake the Sub-Contract Works for Stansell. The Sub-Contract incorporated the provisions of the standard form of domestic sub-contract DOM/ 2 1981 Edition (reprinted 1998), published by the Construction Confederation, incorporating amendments 1 to 8. Clause 38A of that form of sub-contract contained provision for the parties to submit disputes which arose between them to adjudication. So far as is presently material, clause 38A was in these terms:-

".1 Clause 38A applies, where pursuant to Article 3, either Party refers any dispute or difference arising under this Sub-Contract to adjudication….

.4.1 When pursuant to Article 3 a Party requires a dispute or difference to be referred to adjudication then that Party shall give notice to the other Party of his intention to refer the dispute or difference, briefly identified in the notice, to adjudication…..

.5.3 The Adjudicator shall within 28 days of his receipt of the referral and its accompanying documentation under clause 38A.4.1 and acting as an Adjudicator for the purposes of S.108 of the Housing Grants, Construction and Regeneration Act 1996 and not as an expert or arbitrator reach his decision and forthwith send that decision in writing to the Parties. Provided that the Party who has made the referral may consent to allowing the Adjudicator to extend the period of 28 days by up to 14 days; and that by agreement between the Parties after the referral has been made a longer period than 28 days may be notified jointly by the Parties to the Adjudicator within which to reach his decision…

.5.5 In reaching his decision the Adjudicator shall act impartially, set his own procedure and at his absolute discretion may, take the initiative in ascertaining the facts and the law as he considers necessary in respect of the referral which may include the following:…

.5.5.7 obtaining from others such information and advice as he considers necessary on technical and on legal matters subject to giving prior notice to the Parties together with a statement or estimate of the cost involved…

.7.1 The decision of the Adjudicator shall be binding on the Parties until the dispute or difference is finally determined by arbitration or by legal proceedings or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given.

.7.2 The Parties shall, without prejudice to their other rights under the Contract, comply with the decisions of the Adjudicator; and the Contractor and the Sub-Contractor shall ensure that the decisions of the Adjudicator are given effect.

.7.3 If either Party does not comply with the decision of the Adjudicator the other Party shall be entitled to take proceedings in the Courts to secure such compliance pending any final determination of the referred dispute or difference pursuant to Clause 38A.7.1…"

6

The Sub-Contract Sum agreed for the purposes of the Sub-Contract was £288,500. It was also agreed that the execution of that part of the Sub-Contract Works which fell to be performed on the Site would commence on 27 November 2000 and that the works would be completed within eight weeks.

7

In the event it appears that the execution of that part of the Sub-Contract Works which fell to be carried out on the Site did not commence until 11 December 2000 and that the Sub-Contract Works were not completed until 15 July 2001. It was accepted on behalf of Stansell that it was responsible for the delay to the commencement of the Sub-Contract Works on the Site, and for the delays thereafter up to 2 January 2001, but there was a substantial dispute as to the causes of the bulk of the delay to the completion of the Sub-Contract Works.

8

Under cover of a letter dated 2 April 2001 RSL sent to Stansell a draft Final Account in respect of the Sub-Contract Works in the total sum of £335,394.84. That draft Final Account included elements in respect of what were said to be variations to the Sub-Contract Works and items said to be reimbursable on a daywork basis, but did not include any element in respect of alleged loss and expense. The draft Final Account indicated that there was a claim in respect of additional drawing office costs, but that that had yet to be quantified. There were a number of exchanges between the parties in relation to the draft Final Account the detail of which is not presently material. A revised draft Final Account dated 6 September 2001 was in the total sum of £372,792.23 and included additional items said to be variations or to be reimbursable on a daywork basis, as well as quantifying the claim in respect of additional drawing office costs. Again there were exchanges between the parties concerning the revised draft Final Account. Under cover of a letter dated 28 January 2003 RSL submitted to Stansell a further revised Final Account, this time in the sum of £417,805.45. The differences between the elements in the new revised draft and its predecessor were a modest revision of £487.60 in the amounts claimed on a daywork basis, but most significantly the addition of a claim for loss and expense in the sum of £44,525.62. The letter dated 28 January 2003 requested a response from Stansell by 14 February 2003. No response was forthcoming by the date requested. In a letter to Stansell dated 14 February 2003 Mr. Edward Acford of RSL indicated that unless RSL heard from Stansell by 28 February 2003 it would assume that the parties were in dispute and would take advice as to its position. Mr. Richard Ross, Area Commercial Director of Stansell, did reply in a letter dated 20 February 2003 requesting a variety of pieces of further information.

9

RSL then instructed Knowles Legal Ltd. ("Knowles") to advise it and to act for it in adjudication proceedings. A notice of...

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