Supablast was engaged by Story under a subcontract to carry out works in relation to a railway bridge on Merseyside. Story invited Supablast to tender for grit blasting and painting work and sent an accompanying CD which also contained details of associated scaffolding and steelwork repairs. Story provided a quotation which also included a fully priced bill of quantities for the other works included on the CD.

Following negotiations, Supablast submitted a quote on 17 December 2007 for the grit blasting, painting and scaffolding works. The next day, Story replied accepting the quoted sum, in a letter headed “Letter on [sic] Intent”, and stating that the conditions of the contract would incorporate the ICE 6th Edition form of subcontract.

Subsequently, on 20 December 2007 Supablast submitted a quotation for the steelwork repairs. A meeting between the parties was held on 16 January 2008. The minutes of the meeting detailed, amongst other items, that (i) the ‘description of Works to be Sub-Let’ included the blasting, painting, scaffolding and steelwork; (ii) the subcontract price was broken down into the blasting, painting, scaffolding and steelwork; and (iii) that there was only one programme period described for the subcontract works.

Throughout the course of the works, payment applications included all of the works and were paid by Story in one payment. Disputes arose on the final account which Supablast referred to adjudication. In its response, Story contended, for the first time, that there were in fact two subcontracts, one for the blasting, painting and scaffolding and one for the steelwork, which meant that the adjudicator did not have jurisdiction. Following submissions from the parties, the adjudicator decided that the steelworks were a variation to the original subcontract, and that therefore he did have jurisdiction to act.

In the enforcement proceedings Supablast submitted that there had only been one contract concluded between the parties incorporating all of the works, or in the alternative the original contract for the blasting, painting and scaffolding, was varied to include the steelwork. Story repeated that there were two contracts, and accordingly the Adjudicator did not have jurisdiction to rule on his own jurisdiction. In any event the original contract could not have been varied to include the steelwork as this was wholly outside the scope of that contract.

The Judge held that:

1. There was only one contract concluded between the parties. He considered that it was beyond doubt that a contract for the blasting, painting and scaffolding had been created by the 17 and 18 December 2007 letters. The factual matrix showed that the parties knew Supablast had tendered for the steelwork and prior to the 16 January meeting the parties had negotiated the price;
2. The minutes of that meeting unequivocally showed that all the works were to be carried out under the umbrella of a single agreement. This was demonstrated by the description of the subcontract works, the reference to a single subcontract price which was broken down to include the steelwork, and single dates for the commencement and completion of the works; and
3. Story did not communicate to Supablast, at any time throughout the contract works, that the parties were operating under two contracts. The first time it was mentioned was in response to the adjudication. This meant that even if there were two contracts Story was estopped by its conduct from relying on this issue.

Accordingly the adjudicator had jurisdiction and the decision was enforced.

In obiter comments, the Judge decided that Story would have had a reasonable defence to the issue of whether the steelworks could have been decided as a variation, partly due to their substantial nature. The Judge also briefly considered that in this scenario, the questions of substance and jurisdiction overlapped so that in considering that the steel works were to be treated as a variation, the adjudicator was acting within his jurisdiction.