Cases - Robin Ellis Ltd v Vinexsa International Ltd

Record details

Name

Robin Ellis Ltd v Vinexsa International Ltd

Date

[2003]

Citation

EWHC 1352 (TCC)

Keywords

Contract - obligation to proceed regularly and diligently - insufficient workers on site - notice of termination - whether the notice of termination was valid - whether the employer was entitled to terminate the contractor's employment - JCT IFC 1984 Edn, Clause 7.2

Summary

A contract had come into being after lengthy pre-contractual negotiations incorporating the JCT IFC 84 form of contract. The IFC 84 standard form determination procedure involves the participation of the architect at the first stage and the employer at the second stage where there has been a default. The architect has a discretion whether or not to issue the first default notice and must exercise that discretion without any interference from the employer and the employer has a discretion, not to be exercised unreasonably or vexatiously, whether or not to issue the second determination notice which can only be exercised if the default has not been corrected for 14 days after service of the default notice and only then if the discretion is exercised within ten days after the expiry of the first 14 days.

The claimant removed its labour from the site. In response, the architect issued a default notice under clause 7.2.1 informing the claimant that the defendant had without reasonable cause wholly suspended the carrying out of, and had failed to proceed regularly and diligently with, the works in that it had insufficient operatives on site at the relevant times. This notice was the first of two notices envisaged by the default and determination clause 7 of JCT IFC 84. Labour returned to site, but was then withdrawn again. The architect therefore issued a second default notice. This notice was then withdrawn, but quite independently on the same day the claimant's solicitors sent a notice stating that if the defendant did not return to site within five days, then it would determining the defendant's employment. The defendant did not return and the employment was terminated pursuant to clause 7.2.3.

The Court considered that the general rule of construction applicable to determination clauses is that they, and the procedure for determination they provide for, should be construed and applied strictly.

It was held that once a clause 7.2.1 default notice has been served in relation to a specified default, no further default notice can be served if and when it is repeated. However, since the second clause 7.2.1 notice was invalid and had, in any case been withdrawn and since, as found by the arbitrator, the claimant had defaulted in the specified manner and had then repeated that default, the claimant was entitled to serve the determination notice pursuant to clause 7.2.3.