Ringway Infrastructure Services Limited v Vauxhall Motors Limited No 2
Case reference:
[2007] EWHC 2507 (TCC)
Tuesday, 30 October 2007
Key terms: Interest – Discretion of the Court to award further interest - Interim Payments – Payment Notices – s35A of the Supreme Court Act
In the case of Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd [2007] EWHC 2507, Akenhead J held that the Adjudicator did have jurisdiction and therefore enforced his decision. He dealt with the question of costs in that judgment on October 23, 2007, and with the question of interest in this judgment on October 30th.
On the facts of the case, the Employer, under Clause 30.3.3 of the contract, was required to issue a payment notice on 24 May 2007 in respect of Application No. 11. Failing to do so, Clause 30.3.5 provided that the net amount under the Application was due. The Adjudicator found that Vauxhall were obliged to pay Ringway the amount stated in the interim payment application, plus interest from 2 July 2007, and his fees. Ringway, however, claimed that the interest should commence on 24 May 2007 when the debt arose and the sum became due.
The question before Akenhead J was therefore: Does the Court have discretion under Section 35A of the Supreme Court Act to award interest for a longer period than that allowed by the adjudicator? Vauxhall argued that the statutory requirement under the HGCRA 1996 is for the Adjudicator’s decision to be enforced and temporarily binding. Akenhead J agreed with Vauxhall as there was a contractual provision which called for the parties to ‘comply with the decision of the Adjudicator’. He stated that ‘the Adjudicator’s decision may be right or wrong but, whether right or wrong, it is to be complied with.
In relation to Section 35A(1) of the Supreme Court Act, Akenhead J held that the date when the cause of action arose was the date when Vauxhall failed to honour the Adjudicator’s decision. He noted that ‘the Court does have discretion. However, the goalposts or limits of that discretion are the date when the cause of action arose and the date of judgment.’ On the facts of this case, Akenhead stated that the Adjudicator had sensibly quantified the interest. The parties therefore agreed an order for interest on the basis of this judgment.
On the facts of the case, the Employer, under Clause 30.3.3 of the contract, was required to issue a payment notice on 24 May 2007 in respect of Application No. 11. Failing to do so, Clause 30.3.5 provided that the net amount under the Application was due. The Adjudicator found that Vauxhall were obliged to pay Ringway the amount stated in the interim payment application, plus interest from 2 July 2007, and his fees. Ringway, however, claimed that the interest should commence on 24 May 2007 when the debt arose and the sum became due.
The question before Akenhead J was therefore: Does the Court have discretion under Section 35A of the Supreme Court Act to award interest for a longer period than that allowed by the adjudicator? Vauxhall argued that the statutory requirement under the HGCRA 1996 is for the Adjudicator’s decision to be enforced and temporarily binding. Akenhead J agreed with Vauxhall as there was a contractual provision which called for the parties to ‘comply with the decision of the Adjudicator’. He stated that ‘the Adjudicator’s decision may be right or wrong but, whether right or wrong, it is to be complied with.
In relation to Section 35A(1) of the Supreme Court Act, Akenhead J held that the date when the cause of action arose was the date when Vauxhall failed to honour the Adjudicator’s decision. He noted that ‘the Court does have discretion. However, the goalposts or limits of that discretion are the date when the cause of action arose and the date of judgment.’ On the facts of this case, Akenhead stated that the Adjudicator had sensibly quantified the interest. The parties therefore agreed an order for interest on the basis of this judgment.