Supablast (Nationwide) Ltd. v Story Rail Ltd.

Factual and Procedural Background

This case concerns jurisdictional challenges arising from enforcement proceedings of an adjudicator's decision under construction sub-contracts involving two sets of works: grit blasting, painting, scaffolding, and steelwork repairs. The Plaintiff subcontractor ("Supablast") was engaged by the Defendant contractor ("Story") to perform refurbishment works on a railway bridge. Initial contracts and quotations were exchanged in late 2007, primarily covering grit blasting, painting, and scaffolding works. Supablast also provided quotations for steelwork repairs, which were later agreed upon in early 2008.

The parties conducted the works under what was effectively treated as a single sub-contract, despite Story later asserting the existence of two separate sub-contracts. Payment applications and extensions of time were processed on a composite basis. Disputes arose over the final account, and Supablast initiated adjudication in September 2009, treating the works as governed by one sub-contract. Story challenged the adjudicator’s jurisdiction on grounds including the assertion of two separate sub-contracts. The adjudicator ruled that there was a single sub-contract and issued a decision awarding payment to Supablast.

Story did not comply with the adjudicator’s decision, leading Supablast to commence enforcement proceedings in December 2009. The court was tasked with determining whether the adjudicator had jurisdiction and whether the enforcement should be granted on a summary basis.

Legal Issues Presented

1. Whether there were one or two separate sub-contracts between the parties governing the works.
2. Whether the adjudicator had jurisdiction to decide disputes relating to the steelwork repairs, either as part of a single sub-contract or as a variation to the original sub-contract.
3. Whether the adjudicator’s decision should be enforced by summary judgment despite the jurisdictional challenge.

Arguments of the Parties

Appellant's Arguments (Story)

• There were two separate sub-contracts: one for steelwork repairs and another for grit blasting, painting, and scaffolding.
• The steelwork repairs could not legally be treated as a variation under the December 2007 sub-contract.
• The adjudicator lacked jurisdiction to determine disputes arising from two separate contracts in a single adjudication.
• The single payment mechanism was used solely for administrative convenience and did not indicate a single sub-contract.
• There was a sufficiently arguable defense to the claim, so summary judgment should not be granted.

Appellee's Arguments (Supablast)

• There was only one sub-contract covering all works, including steelwork repairs, as evidenced by the parties’ conduct and meeting minutes.
• The parties agreed, or at least proceeded on the basis, that all works were governed by a single sub-contract.
• Alternatively, the steelwork repairs were instructed as a variation to the original sub-contract.
• There was no documentary or conduct-based indication of two separate sub-contracts before or during the project.
• The adjudicator had jurisdiction to decide the issue of whether there was one or two contracts as part of the substantive dispute.

Table of Precedents Cited

Court's Reasoning and Analysis

The court undertook a detailed factual and contractual analysis, focusing on the parties’ communications, conduct, and the minutes of the 16 January 2008 meeting. It found that:

• A sub-contract was clearly formed by the letters of 17 and 18 December 2007 covering grit blasting, painting, and scaffolding.
• Both parties were aware of the steelwork quotation and its likely inclusion in the works before the January 2008 meeting.
• The meeting minutes objectively evidenced agreement that all works, including steelwork repairs, were to be carried out under a single sub-contract, with one contract price, one completion date, and one payment process.
• The parties’ conduct throughout the project, including payment applications and extensions of time, treated the works as governed by one sub-contract.
• Story’s later assertion of two separate sub-contracts was not communicated to Supablast and lacked objective foundation.

The court concluded there was no real prospect that Story could establish the existence of two separate sub-contracts or rebut the estoppel by convention that there was one sub-contract. It also noted that even if the steelwork repairs were not originally included, the parties’ conduct treated them as a variation to the existing sub-contract. The court found that the adjudicator had jurisdiction to decide this issue as it was part of the substantive dispute.

The court applied the legal principles from relevant case law, including the test for summary judgment, the scope of adjudicators’ jurisdiction, and the interpretation of variation clauses. It rejected Story’s jurisdictional challenge, finding it bound to fail.

Holding and Implications

Holding: The court granted summary judgment in favor of Supablast, enforcing the adjudicator’s decision. The jurisdictional challenge by Story was dismissed as having no real prospect of success.

Implications: The decision confirms that where parties conduct their contractual relationship as under a single sub-contract, an adjudicator has jurisdiction to determine disputes encompassing all related works, including variations. It also illustrates that an estoppel by convention may prevent a party from later asserting multiple contracts if the parties have behaved consistently otherwise. No new legal precedent was established beyond the application of existing principles to the facts of this case. The court awarded costs to Supablast, with a reduction to reflect the arguable nature of some issues.