Supablast Nationwide Ltd v Story Rail Ltd (Case No HT-09-483)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 21 January 2010 |
| Neutral Citation | [2010] EWHC 56 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-09-483 |
| Date | 21 January 2010 |
[2010] EWHC 56 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION TECHNOLOGY AND CONSTRUCTION COURT
Before: Mr Justice Akenhead
Case No: HT-09-483
Lynne McCafferty (instructed by Wragge & Co LLP) for the
Claimant Steven Walker (instructed by Dickinson Dees LLP) for the Defendant
Hearing dates: 14 January 2010
Mr Justice Akenhead:
Introduction
This case raises interesting jurisdictional issues in the context of adjudication decision enforcement proceedings where there are or may be disputes arising under two contracts between the parties which are referred to a single adjudicator.
The Factual Background
Story Rail Ltd (“Story”) was engaged by Network Rail in 2008 to carry out substantial refurbishment works to a railway bridge known as Carr Mill Viaduct in St Helens, Merseyside. In 2007, Story approached Supablast (Nationwide) Ltd (“Supablast”) with a view to engaging them as potential subcontractors for parts of the project.
By letter dated 18 September 2007, Story invited Supablast to tender for grit blasting and painting work on this project. Story sent to Supablast a compact disc which contained details of the grit blasting and painting work as well as other works including the scaffolding and encapsulation works together with steelwork repairs. On 2 October 2007, Supablast provided their quotation in the sum of £270,209.82 to Story but also took the opportunity to provide a fully priced Bill of Quantities in relation to amongst other things the steelwork repairs, scaffolding and encapsulation works. In November 2007 Story asked Supablast to quote for these further works again.
There were discussions between the parties in relation to the grit blasting and painting works together with the scaffolding and encapsulation works. By letter dated 17 December 2007, Supablast sent to Story a letter stating as follows:
“Further to our recent quotation for the grit blasting, painting and scaffolding works for the above named tender we have pleasure in confirming our subsequent agreed prices:
1. Grit Blasting and Painting for the fixed price of £222,000.00
2. Scaffolding and Encapsulation for the fixed price of £158,459.60”
They looked forward to receiving Story's “official order”.
By letter dated 18 December 2007, Story wrote to Supablast as follows:
“Further your quotation…dated 17 th December 2007 for grit blasting, painting and scaffolding works on the above contract. We confirm our acceptance of your price in the sum of £380,459.60 nett plus VAT.
Please treat this letter as our order to carry out the works. Our sub contract order amended in line with the main contract will follow in due course. The terms and conditions of subcontract shall be the ICE sixth edition form of subcontract. The sub contract reference number that should be quoted on all correspondence is SUB0000232/SR12960…
Please note that it is a condition of the sub-contract that you have the requisite insurance cover as required under the Main Contract. We would be obliged if you would send a copy of your certificate(s) of insurance to our head office…”
This letter is headed “Letter on [sic] Intent”
The ICE sixth edition form of subcontract contained the following clauses:
“8(1) The Sub-Contractor shall make such variations of the Sub-Contract Works, whether by way of addition, modification or omission, as may be:
(a) ordered by the Engineer under the Main Contract and confirmed in writing the Sub-Contractor by the Contractor; or
(b) agreed to be made by the Employer and the Contractor and confirmed in writing to the Sub-Contractor by the Contractor; or
(c) ordered in writing by the Contractor…
(9) (1) All authorised variations of the Sub-Contract Works shall be valued in the manner provided by this Clause and the value thereof shall be added to or deducted from the price specified in the Third Schedule hereto or as the case may require.
(2) The value of all authorised variations shall be ascertained by reference to the rates and prices (if any), specified in the Sub-Contract for the like or analogous work, but if there are no such rates and prices, or if they are not applicable, then such values shall be such as is a fair and reasonable [sic] in all the circumstances. In determining what is fair and reasonable valuation, regard shall be had to any valuation made under the Main Contract in respect of the same variation…
18(1) If any dispute or difference shall arise between the Contractor and the Sub-Contractor in connection with or arising out of the Sub-Contract, or carrying out of the Sub-Contract Works…whether arising during the progress of the Sub-Contract Works or after their completion it shall be settled in accordance with the following provisions…
(4) (a) The Contractor and the Sub-Contractor each has the right to refer any dispute under the Sub-Contract for adjudication and either party may at any time give notice in writing (hereinafter called the Notice of Adjudication) to the other of his intention to refer the dispute to adjudication. The Notice of Adjudication and the appointment of the adjudicator shall…be as provided at paragraphs 2 and 3 of the Institution of Civil Engineers’ Adjudication Procedure (1997). Any dispute referred to adjudication shall be conducted in accordance with the Institution of Civil Engineers’ Adjudication Procedure (1997)…”
On 20 December 2007, Supablast finalised its quotation for the steelworks, it having been provided by Story with revised steelwork quantities; the quote was for £562,571.40. There is an immaterial factual issue between the parties as to when Story received this; Story says that it was on 3 January 2008. It seems beyond doubt that between the receipt of this finalised steelwork quotation and 16 January 2008 agreement was reached between Story and Supablast on a price for the steelwork.
On 16 January 2008, Story convened a meeting, the minutes of which were to read “Minutes of Subcontractors Preliminary Meeting”. Although the minutes were apparently produced several weeks later, there is no issue that the minutes record what was said and agreed. The minutes are on a pro forma document where various boxes are filled in. The material boxes were as follows:
There was an “Any Other Business” box to be filled in as required. Mr Smithson of Story says in his witness statement of 8 January 2010 that, at the end of 16 January 2008 meeting, he “anticipated that Supablast would be carrying out the steelwork repairs”
| Sub-Contractor Name | Supablast Nationwide Ltd |
| Description of Works to be Sub-Let | Scaffold and encapsulation Steelwork repairs inc new walkway, bracings etc Blasting and painting |
| MAIN CONTRACT DETAILS | |
| Main Contract Form | RT3 form of contract based on ICE 6 th Edition |
| LA Damages | £2500.00 per day |
| Sub-Contract Details | |
| Conditions applicable | ICE 6 th Edition amended in line with the main contract |
| Further documents to be incorporated in subcontract agreement | Documents listed in subcontract enquiry 18th of September 2007 Schedule of application and payment dates |
| Subcontract Price (EXC VAT) | Scaffold £158,459.60 Steelwork £552,203.40 |
| Blasting and painting £222,000.00 | |
| Fixed or Fluctuating Price | Fixed Price |
| Payment Details: (Clause 15) | |
| Insurance's-Cover/Expiry Date/Provide Details | Expires 31/3/08 SNL to renew and maintain for the duration of the contract |
| Retention | 3% till practical completion 1.5% till making good defects certificate |
| Applications for payments-Submission dates | As per payment schedule handed over in this meeting |
| The first date for application for payment | 26 th January 2008 |
| Programme | |
| Main contract commencement date | 28 th January 2008 |
| Main contract completion date/period | 14 weeks |
| Period for submission and approval of all subcontractor's drawings… | SNL to supply programme by 21/1/08 |
| Period of notice to subcontractor to commence on site. | Notice given in meeting |
| The date for commencing of the subcontract works on site will, subject to the progress of the Main Contract programme be… | Scaffold to commence 21 st Jan 08 |
| Overall period carrying out and completion of the subcontract works on site: | 60 Days |
| Number of separate visits | One continuous |
| Information | |
| Subcontractor's Requirements | Full set of contract issue drawings requested. JW [of Story] to action |
| Subcontractor to prepare shop drawings/As Built/Maintenance Manual | Prior to final payment |
| Particular client and specification requirements | …JP [Supablast] proposed alternative steel specification JP to TQ [raise Technical query] SRL |
| Materials and Equipment | |
| Contract Manager/Tel no: | Lauront Hostache 07766 776696 Blast and paint Rob Broadhurst for scaffold Steelwork to be advised |
| Number of men, average/peak | 6 for scaffold 6 for painting 6 for steelwork |
| Any Proposed sub-contractors? | Scaffold by Lyndon Steelwork to be advised |
| Attendance at Progress/Technical Meetings? (Date of 1 st meeting) | Every two weeks first to be held 5 th February 08 |
| Additional Issues | |
| All terms and conditions of subcontractors quotation deleted in favour of the Main Contractor conditions | |
| It is noted that the subcontractor fully under-stands the work and has quoted in relationship to the drawings and specification. No work will be entertained through lack of knowledge of these documents. |
There appears to be no issue that broadly works started on or about 21 or 23 January 2008, although there is an issue which is probably immaterial as to whether steelwork started. It was common ground at the hearing that the scaffolding had to go up first in any event to enable...
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