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

Precedent	Rule or Principle Cited For	Application by the Court
Three Rivers DC v Bank of England (No 3) [2001] UKHL 16	Test for summary judgment: absence of reality of defense, not probability.	The court applied this test to determine that Story had no real prospect of successfully defending the claim.
Air Design (Kent) Ltd v Deerglen (Jersey) Ltd [2008] EWHC 2047 (TCC)	Adjudicator’s jurisdiction to decide if multiple contracts are variations of a single contract.	Supported the view that the adjudicator could properly find the steelwork repairs were variations of the original sub-contract and had jurisdiction to decide this.
Camillin Denny Architects Ltd Adelaide Jones and Company Ltd [2009] EWHC 2110 (TCC)	Adjudicator’s jurisdiction can overlap with substantive issues when jurisdictional issues form part of the substantive dispute.	Reinforced the principle that adjudicators properly appointed have jurisdiction to resolve jurisdictional issues that coincide with substantive disputes.
Thomas-Fredric's (Construction) Ltd v Keith Wilson [2004] BLR 23	Limits on adjudicator’s jurisdiction to decide jurisdictional issues unless parties submit to it; summary judgment only if no real prospect of success on jurisdictional defense.	The court applied this to assess Story’s jurisdictional challenge and found it had no real prospect of success.
Blue Circle Industries PLC v Holland Dredging Company (1987) 37 BLR 40	Determining whether additional work falls within a variation clause depends on the contract’s scope; some work may be wholly outside original contract and not a variation.	Referenced to illustrate that whether steelwork could be a variation was arguable but not decisive here.
Harris Calnan Construction Co Ltd v Ridgewood (Kensington) Ltd 2008 BLR 132	Basis for indemnity costs where no arguable defense exists in enforcement proceedings.	Considered in relation to costs but court declined indemnity costs as Story’s defense was arguable.
Fiona Trust [2007] UKHL 40	Commercial and pragmatic interpretation of dispute resolution clauses to favor a single tribunal unless clearly excluded.	Supported the approach that parties likely intended disputes under related works to be decided by the same adjudicator.

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.