Cases - Costain Ltd v Wescol Steel Ltd

Record details

Name
Costain Ltd v Wescol Steel Ltd
Date
[2003]
Citation
EWHC 312
Legislation

Civil Procedure Rules 1998

Keywords
Adjudication - notice of intention to adjudicate - dispute - crystallisation of dispute - crystallisation of dispute at time of notice of intention to adjudication - notice of intention to adjudicate - time of notice of intention to adjudicate
Summary

Wescol was a subcontractor to Costain. Disputes arose between the parties as to the amount of money due to Wescol for variations and to their entitlement to an extension of time. Wescol then went into administrative receivership and the receivers referred the dispute to adjudication.

During the course of that adjudication Costain applied to the court for a declaration that the adjudication process was invalid. In their application they relied on the following grounds:

  1. A dispute had not crystallised at the time that the notice of intention to adjudicate was issued because: (a) Costain had indicated that they were still looking into the matter; and (b) the final account had not fallen due for payment at the time that the notice of adjudication was issued.
  2. That the notice of intention to adjudicate refers to two disputes; namely the amount of the final account and whether an extension of time for delay should be granted.

In relation to point (1), the judge took a common sense approach and concluded that a dispute had arisen as to the value of the final account at the time the notice of intention to adjudicate was served. He based this part of his judgment on the fact that there was no further communication on either side between 7 November 2002 (when Costain indicated that they were looking into the matter) and 13 December 2002 (when the notice of intention to adjudicate was served). He also took into account the fact that Costain denied that the money was at present due. Therefore, he concluded that the adjudicator could proceed to make a decision on the value of the final account even if he could not decide that any money should be paid.

In relation to point (2), the judge concluded as a matter of fact that the matters referred constituted one dispute.