Ringway Infrastructure Services Limited v Vauxhall Motors Limited
Case reference:
[2007] EWHC 2421 (TCC)
Tuesday, 23 October 2007
Key terms: Interim Payments – Payment Notices – Jurisdiction – No dispute
Vauxhall employed Ringway to carry out the development of a large car park to accommodate new cars being built by Vauxhall. The contract was the JCT1998 with Contractor's Design as amended.
On 16 May 2007, Ringway submitted interim application No 11. This was a detailed document, and sought the sum of £1,303,704.95. Vauxhall, acting principally through its agent Walfords LLP, finally responded on 27 June 2007 stating that it had not had sufficient time to consider in detail the build up of the variation costs. It did not issue a payment notice. The parties discussed the need to resolve the matter between themselves, but this came to nothing and an adjudicator was appointed.
Vauxhall made several jurisdictional challenges, which were rejected. The adjudicator found that by operation of clause 30.3.5, Vauxhall were obliged to pay Ringway the amount stated in the interim payment application, plus interest and his fees.
The enforcement proceedings came before Mr Justice Akenhead. The jurisdictional challenges included that the adjudication notice referred to Ringway's ultimate entitlement under its final account as opposed to the amount due under the interim application. Vauxhall also said that no dispute had crystallised prior to the reference to adjudication in relation to the interim application, because no demand had been made for payment. As Ringway had not, prior to the reference, relied upon the provisions of clause 30.3, no dispute existed or could exist in relation to the claim made in respect of interim application which was based on clause 30.3.5.
The Judge was of the view that the key issue was whether the adjudicator had jurisdiction to decide that, in the absence of any timely payment or withholding notices, Ringway was entitled under clause 30.3.5 to the sum claimed in interim application 11. The Judge was satisfied that the dispute which was referred to adjudication, was a dispute relating to the interim application. It was material that the previous applications for payment were numbered 1-10, and that these were valued by Walfords LLP within a seven day period of their receipt. Interim application 11 was not an academic valuation exercise which Ringway were seeking to embark on.
Further, the Judge had to decide what, if anything, was in dispute and if there was a dispute, whether the dispute resolved by the adjudicator was the one referred to him. Here, as a matter of fact, the dispute concerned the amount due to Ringway arising from application 11. Part of this dispute was whether or not Vauxhall had complied or not with the payment provisions of the contract.
Akenhead J held that the issuing of a payment notice under clause 30.3.3 was a mandatory obligation. Vauxhall’s failure to do so was effectively a breach of contract. Although there was no express reliance in the adjudication notice to clauses 30.3.3 and 30.3.5, this did not change the fact that there was a clear claim for payment. The lack of a timely notice under clause 30.3.3, inevitably meant that under clause 30.3.5, the sum claimed became due and payable. Thus, no invoice can have been required in circumstances where Vauxhall was itself in breach.
On 16 May 2007, Ringway submitted interim application No 11. This was a detailed document, and sought the sum of £1,303,704.95. Vauxhall, acting principally through its agent Walfords LLP, finally responded on 27 June 2007 stating that it had not had sufficient time to consider in detail the build up of the variation costs. It did not issue a payment notice. The parties discussed the need to resolve the matter between themselves, but this came to nothing and an adjudicator was appointed.
Vauxhall made several jurisdictional challenges, which were rejected. The adjudicator found that by operation of clause 30.3.5, Vauxhall were obliged to pay Ringway the amount stated in the interim payment application, plus interest and his fees.
The enforcement proceedings came before Mr Justice Akenhead. The jurisdictional challenges included that the adjudication notice referred to Ringway's ultimate entitlement under its final account as opposed to the amount due under the interim application. Vauxhall also said that no dispute had crystallised prior to the reference to adjudication in relation to the interim application, because no demand had been made for payment. As Ringway had not, prior to the reference, relied upon the provisions of clause 30.3, no dispute existed or could exist in relation to the claim made in respect of interim application which was based on clause 30.3.5.
The Judge was of the view that the key issue was whether the adjudicator had jurisdiction to decide that, in the absence of any timely payment or withholding notices, Ringway was entitled under clause 30.3.5 to the sum claimed in interim application 11. The Judge was satisfied that the dispute which was referred to adjudication, was a dispute relating to the interim application. It was material that the previous applications for payment were numbered 1-10, and that these were valued by Walfords LLP within a seven day period of their receipt. Interim application 11 was not an academic valuation exercise which Ringway were seeking to embark on.
Further, the Judge had to decide what, if anything, was in dispute and if there was a dispute, whether the dispute resolved by the adjudicator was the one referred to him. Here, as a matter of fact, the dispute concerned the amount due to Ringway arising from application 11. Part of this dispute was whether or not Vauxhall had complied or not with the payment provisions of the contract.
Akenhead J held that the issuing of a payment notice under clause 30.3.3 was a mandatory obligation. Vauxhall’s failure to do so was effectively a breach of contract. Although there was no express reliance in the adjudication notice to clauses 30.3.3 and 30.3.5, this did not change the fact that there was a clear claim for payment. The lack of a timely notice under clause 30.3.3, inevitably meant that under clause 30.3.5, the sum claimed became due and payable. Thus, no invoice can have been required in circumstances where Vauxhall was itself in breach.