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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Purton (t/a Richwood Interiors) v Kilker Projects Ltd [2015] EWHC 2624 (TCC) (16 September 2015) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2015/2624.html Cite as: [2015] EWHC 2624 (TCC) |
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
ROB PURTON t/a RICHWOOD INTERIORS |
Claimant |
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- and - |
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KILKER PROJECTS LIMITED |
Defendant |
____________________
Mr Jonathan Selby (instructed by Fenwick Elliott LLP) for the Defendant
Hearing dates: 29 July 2015
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Crown Copyright ©
Mr Justice Stuart-Smith :
Introduction
The General Principles to be Applied
"The third matter is the impact of the fact that the transaction is executed rather than executory. It is a consideration of first importance on a number of levels. See British Bank for Foreign Trade ltd v Novinex [1949] 1 KB 268, at page 630. The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter legal relations. It will often make it difficult to submit that the contract is void for vagueness or uncertainty. Specifically, the fact that the transaction is executed makes it easier to imply a term resolving any uncertainty, or, alternatively, it may make it possible to treat a matter not finalised in negotiations inessential…… Fourthly, if a contract only comes into existence during and as a result of performance of the transaction it will frequently be possible to hold that the contract impliedly and retrospectively covers pre-contractual performance. See Trollope & Colls Ltd v Atomic Power Construction Ltd [1963] 1 WLR 333."
The Factual Background
i) Mr Kilker says that he and Mr Purton met in April 2014. He says that in the course of the meeting he and Mr Purton had "looked at all the joinery elements and associated finishing details that Mr Purton would be required to carry out" and at the end of the meeting he believed "Mr Purton knew what work was required of him and that the question that remained to be answered was whether the works as detailed in the updated drawings that he took away for review could be completed for a price in the region of £550,000-600,000."
ii) On 13 May 2014 Mr Jennings emailed Mr Purton after a meeting, in the course of which he wrote:
"Overall Budget:
The overall budget that you are working to is £550,000-600,000 & VAT. This is the budget based on the original scope of works and we confirm that the latest agreed set of drawings issued by Bruno Moinard in April 2014 has changes to the base scheme.
Additional Works
[…]
Richwood Interiors are to produce a list of items that are extra to the £550k with their respective extra over costs to the project so that Kilker Projects can advise the client accordingly of potential extra costs.
[…]
Deposit Payments:
I appreciate you are forking out money on deposit payments as the French companies do not lift a finger until generally 50% deposits are paid – as discussed we will need to get a payment to you by the end of this week to keep up to speed with the money you are expending.
[…]";
iii) On 20 May 2014 Mr Purton sent an invoice for "Further application for works completed for the Dorchester" in the sum of £100k plus VAT;
iv) On 22 May 2014 Mr Purton sent a statement of account identifying payments of £124,000 plus VAT against a debit owed of £144,000 plus VAT and claiming £20,000;
v) The contract is alleged to have come into existence on or about week commencing 9 June 2014;
vi) The email on 2 June 2014 from Mr Purton to Mr Kilker was timed at 13:06 and said "I am leaving Devon now can I meet you at the hotel at 4.45 today Best Rob". Mr Kilker says in his witness evidence that such a time would have been inconvenient for him as a result of his family commitments;
vii) On 24 June 2014 Mr Purton sent a document which appears on its face to have two component parts. The upper half records works done to the value of £125,000 and payments of £120,000 (both net of VAT). Underneath that part are the words: "Contract price – to be agree [sic] with Brendan £550,000-600,000". Below those words appears "Valuation 02 - £100,000" plus VAT.
viii) On 16 July 2014, Mr Purton sent an application for payment of £150,000 plus VAT (i.e. £180,000 gross) which is endorsed in handwriting with the statement that Kilker paid 5 instalments between 17 July and 8 August 2014 totalling £170,000 gross;
ix) On 18 July 2014, Mr Jennings sent an email in which he said:
"As discussed earlier please find attached an excel work sheet to use as your application for payment.
The figures will alter to reflect the agreements between yourself & Brendan and what I really want is your application for payment to reflect;
- The original agreed contract value
- The agreed costs of variations to the original scope of works
- The value of money claimed for each calendar month so we can track what money is owed & due for payment
If you want to alter the format so that you provide more information then please feel free to do so."
The template spreadsheet was entitled "Application for Payment No 3 To end of June 2014". The left-hand column was headed "Original Contract Works" and listed 13 items (under sub-headings for preliminaries and joinery manufacture), each of which had a "Total Value" given in the second column. The Total Value of the 13 items was £550,000. Continuing down in the left hand column were three further items under the heading "Additional Works/Variations", the Total Values of which amounted to £42,000 giving an overall total of £592,000. To the right of these columns were further columns setting out the % completion for each item and the sum claimed in respect of the completed work, the amounts claimed previously (in this document appearing as nil) and the valuation derived from the preceding columns;
x) On 21 July 2014, Mrs Ronnie Pegg, Mr Purton's administrator, sent Kilker an application for payment by Kilker of £150,000 setting out that costs of £363,164 had been incurred by Mr Purton, of which £211,024 had been paid by Mr Purton and £152,140 was outstanding. It recorded that Mr Purton had received £153,333 to date from Kilker. Mrs Pegg did not use the template that had been provided on 18 July. At the end of the email, Mrs Pegg wrote "NB We are aiming for a contract price of £600,000 with £50,000 aborted costs";
xi) On 28 July 2014 Mr Purton submitted a further invoice claiming payment of £150,000 plus VAT for works completed for the Dorchester Grill. The invoice is endorsed with manuscript notes stating that on account payments were made in the sums of £40,000 on 11 August and £10,000 on 10 September 2014;
xii) Mr Kilker exhibited three pages of manuscript notes which he says were compiled during a meeting with Mr Purton towards the end of July. It has a number of entries with figures against them. At the end of the document appears the figure "£350k", though it is not clear on the face of the document how that figure was reached;
xiii) On 18 August 2014 Mr Wall on behalf of Mr Purton sent Mr Purton's Application No 3 which adopted the format of the template that had been provided on 18 July. The differences between the template sent to Mr Purton on 18 July and this Application are significant:
a) The 13 items listed in the left hand column under "Original Contract Works" are the same in each document, except for Item 3 under the sub-heading "Joinery Manufacture", which was described as "Moveable Wall Panels" in the original template and as "Day & Night Panels" in Application No 3;
b) 10 of Total Values ascribed to the 13 items listed under "Original Contract Works" are different. Specifically, the sum of the 13 Total Values in Mr Purton's Application No 3 is £350,000 (as opposed to £550,000 in the original template). The biggest difference is that £110,000 has been moved from Item 3 of Joinery Manufacture (Moveable Wall Panels), apparently to Item 6 of Additional Works/Variations (now called Benbow Moveable Wall Panels). So it appears that the new Item 3 (Day & Night Panels) in Application No 3 is in substitution for the old one, which has moved down to Additional Works/Variations;
c) Items 3-8 of the 9 items now listed as Additional Works/Variations are described by reference to names: the Court was told that this reflects the fact that the items were packages to be provided by named sub-contractors;
d) The aggregate Total Value for all the items in the left hand column in Application No 3 was £673,000 (up from £592,000 in the original template);
e) The valuation was in the sum of £320,300 (as opposed to £200,000 in the original template);
xiv) Application No 3 was revised slightly by another in essentially the same format on 19 August 2014. The differences are not material, save that the aggregate Total Value for all the items in the left hand column was now £676,200 and the current valuation was now £323,500, both figures having increased by £3,200;
xv) On 21 August 2014 Mr Purton sent to Kilker what he described as "the payment sheet I am running on". Attached was a document outlining costs incurred (paid or due) of £356,328 and payments received to date of £261,665, leaving a balance of £94,663. At the bottom of the document it stated "NB We are aiming for a contract price of £600,000 with £50,000 aborted costs";
xvi) On 15 September 2014, Mr Wall on behalf of Mr Purton sent another document in the same format as Valuation No 3 described in his email and on the spreadsheet as a "Running Total": The 13 items under the heading "Original Contract Works remained unchanged with Total Values of £350,000 in aggregate;
xvii) On 18 September 2014 Mr Jennings of Kilker sent an email in which he said that Mr Purton's "application figure for works complete to 21st August 2014 was £323,500 & VAT and to date we have paid you £353,555 & VAT." It is not clear what the source of the figure of £323,500 is, though it coincides with the figure for the revised Valuation No 3 sent on 19 August 2014;
xviii) Mr Purton made applications for payment on 22 September 2014, 24 September 2014 and 5 October 2014, which were endorsed as being paid on 23 September, 29 September and 10 October respectively. Their combined value was £145,000 including VAT. A further invoice on 15 October for £96,000 gross was endorsed as paid in full the same day. One dated 29 October 2014 for £60,000 gross was paid in two instalments on 28 and 30 October 2014. Another for £60k gross dated 3 November 2014 was endorsed as paid in instalments on 7 and 11 November 2014. Thereafter Applications for payment do not appear to have been paid;
xix) There is a version of the 18 July 2014 Template described as Running Total at 15 October 2014 which includes a sum of £400,000 as the subtotal for the original contract works. Mr Purton says in evidence that this figure was an inadvertent mistake. In fact, the increase from £350,000 to £400,000 can be seen to be attributable to increasing two items of preliminaries (Drawing Preparation and Project Management) by £25,000 each.
xx) On 8 December 2014 Mr Purton submitted his final account using the 18 July Template, and stating that the Original Contract Works were £350,000. The two additional sums of £25,000 for preliminaries had been removed and now appeared as separate items under Additional Works/Variations. The final account also constituted a request for payment in the sum of £147,223 i.e. the sum awarded by the adjudicator and the main subject matter of this action.
Application of Principles to the Present Case
i) On 18 July 2014 Mr Jennings, who is evidently one of Kilker's key employees, sent the template with the acknowledgement that "the figures [he had put in] will alter to reflect the agreements between yourself and [Mr Kilker]" and asked that Mr Purton submit it including "the original agreed contract value" and "the agreed costs of variations to the original scope of works." This, for present purposes, is a clear acknowledgement that there was an agreed original scope of works with an agreed contract value, which was to be supplemented by variations thereafter;
ii) With one exception, the subsequent iterations of the template produced by Mr Purton or on his behalf all identified the same original scope of works and the price for them as £350,000. The exception is the version described as the Running Total at 15 October 2014 which has £400,000 in place of the £350,000. On examination it is clear that the additional £50,000 is attributable to increased preliminaries because of additional works over and above the Original Contract Works, and the correction to that effect in Mr Purton's Final Account document is logical and supports his case: see [14(xx)].
iii) The references to budgets and an overall contact price other than £350,000 are not inconsistent with Mr Purton's case. They are evidently referring to the final out-turn cost of all works i.e. what had been consistently described by Kilker (in the 18 July 2014 template) and Mr Purton as the "Original Contract Works" plus any other Additional Works/Variations.
"The phrases "approbating and reprobating" or "blowing hot and blowing cold" are expressive and useful, but if they are used to signify a valid answer to a claim or allegation they must be defined. Otherwise the claim or allegation would be liable to be rejected on the mere ground that the conduct of the party making it was regarded by the court as unmeritorious. From the authorities cited to us it seems to me to be clear that these phrases must be taken to express, first, that the party in question is to be treated as having made an election from which he cannot resile, and, second, that he will not be regarded, at least in a case such as the present, as having so elected unless he has taken a benefit under or arising out of the course of conduct which he has first pursued and with which his present action is inconsistent."
"… in these proceedings I cannot consider the merits of the adjudicator's substantive decision. In those circumstances, it is not appropriate (and in some circumstances it might be impossible) for the court to guess what decision would have reached if a different argument had been presented to him."
"[26] There is no issue in this case that the contract was a construction contract for the purposes of the 1996 Act (subject to a possible issue as to whether all the terms were in or evidenced in writing) or that, because no provision was made in the contract for adjudication, the statutory Scheme for Construction Contracts (as set out in the Schedule to the Scheme for Construction Contracts (England and Wales) Regulations 1998, SI 1998/649) is applicable."
He expressed doubt about the correctness of the Redworth decision as follows:
"[28] I find myself in some disagreement. The Banque des Marchands de Moscou case was to do with two sets of court proceedings and is readily comprehensible in that context. However, an adjudicator, who reaches what is expressed and accepted by him and the parties as a non-binding decision, has only inquired into his jurisdiction as he was entitled to do and it is primarily in the court that a binding decision can be given as to jurisdiction. I can not see that principles of election apply in these circumstances. Of course, if a respondent to adjudication does not challenge the jurisdiction of the adjudicator during the adjudication when it knows of the grounds of challenge, it will generally be deemed to have waived or abandoned any rights to challenge the jurisdiction on those grounds. That however is not in strict terms election. Whether the Redworth Construction decision was rightly decided or not on this point, one needs to examine in any event with care whether a materially different case on jurisdiction is being mounted in the court proceedings compared with that raised before the adjudicator. It must also be relevant to consider whether at least in a clear case the adjudicator with the correct and full information before him would have reached the same conclusion that he did. It will also be relevant to consider whether the adjudicator in fact and in reality actually did have jurisdiction. If he or she did have jurisdiction to decide the dispute referred to adjudication, and if he or she with the full information available would have inevitably concluded that there was jurisdiction, I can not see why the adjudication decision should not be enforced in those circumstances."
Conclusion