1 After the parties had signed the contract in July 1998, JLC Ltd mocked up, off site, its design for one of the laboratories that had to satisfy the most stringent temperature control requirements. During the latter half of 1998 and the first half of 1999, JLC Ltd tested the performance of its design against various configurations of heat generating sources within the room. The results from about 750 measurement points revealed a pass rate of between 17 per cent and 98 per cent depending on design configuration and heat sources located within the room. JLC Ltd achieved the latter result when all heat generating sources, including lights, were turned off.
2 Under the contract, there was an allowance for non-compliance with the stringent temperature requirements for those areas within the controlled space that were "immediately adjacent" to heat emitting equipment or people. In September 1999, JLC Ltd stated the view that its design complied with the specification, but noted that the Department disagreed because it considered that JLC Ltd's definition of immediately adjacent was too generous.
3 In November 1999, JLC Ltd sought clarification of the contract in regards to the minimum distances between the edges of controlled spaces that had to meet the most stringent temperature requirements and the walls and the floors of the laboratories. JLC Ltd pointed out that specified minimum distances in some space data sheets were smaller than the minimum specified in covering explanatory notes. JLC Ltd was of the view that the minimum distance of 0.5 metres set in the explanatory notes took precedence over the smaller distances stated in the space data sheets. The Department disagreed, taking the position that the lower values in the space data sheets took precedence.
4 A dispute emerged between the Department and Laser regarding Laser's interpretation of these two aspects of the specification. In February 2000, Laser referred the two issues to adjudication.
5 The first issue centred on the definition of the size of the space in the relevant laboratories within which the temperature had to be controlled to the most stringent requirements. The contract stated:
Controlled Area - The [relevant] field [on the space data sheet] specifies the amount of the space that requires control of temperature and humidity. The requirements shall be interpreted as follows:
i The maximum controlled area for ± 0.1°C specified Spaces [spaces requiring the most stringent control of temperature] is a distance of 0.5 [metres] from the walls and 0.5 [metres] up to 2 [metres] from the floor.
ii For Spaces with temperature control other than ± 0.1°C (where the area of control is not specified as less than 0.5 [metres] from any surface), the maximum controlled area is 0.5 [metres] from all surfaces.
iii Spaces which specify a requirement for an area of control of less than 0.5 [metres], shall be provided with an area of control of up to 0.1 [metres] from the wall and/or floor.
6 Some of the space data sheets for laboratories that had to meet the most stringent temperature control requirements stated that the controlled area extended to within 0.1 metres of the walls. Laser interpreted the contract on the basis that requirement (i) took precedence over entries on the space data sheets that specified a larger controlled area. The Department disagreed. The Adjudicator concluded that Laser's interpretation was correct.
7 The second issue was about Laser's interpretation of "immediately adjacent" in so far as this term provided relief from complying with the most stringent temperature control requirements in areas around heat generating sources. The contract stated:
For all Spaces, areas immediately adjacent to heat-emitting equipment and people within the room will be outside [the controlled] limits [of ± 0.1°C of the specified temperature].
8 Laser contended that, if the controlled space met the requirements of the contract when there was neither heat emitting equipment nor people within the space, when such heat sources were introduced, those areas next to the heat sources that do not comply with the specified requirements should be classed as "immediately adjacent" areas.
The Adjudicator found that he was not in a position to say that the meaning presented by Laser was correct and so concluded that it had not put forward the correct meaning.