Emcor Drake and Scull Ltd. v Sir Robert McaLpine Ltd., Court of Appeal - Technology and Construction Court, May 07, 2004, [2004] EWHC 1017 (TCC)

Case Number: HT 03 114

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Emcor Drake and Scull Ltd. v Sir Robert McaLpine Ltd., Court of Appeal - Technology and Construction Court, May 07, 2004, [2004] EWHC 1017 (TCC)

Case No: HT 03 114

Neutral Citation Number: [2004] EWHC 1017 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 7th May 2004

Before :

HIS HONOUR JUDGE RICHARD HAVERY Q.C.

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Between :

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Mr. David Thomas Q.C. and Mr. Adam Constable (instructed by Hammonds) for the Claimant

Mr. David Streatfeild-James Q.C. and Mr. Manus McMullan (instructed by Macfarlanes) for the Defendant

Hearing dates : 23rd, 24th,25th,26th February, 1st 2nd, 3rd March 2004

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Judgment

Judge Richard Havery Q.C. :

JUDGMENT

Introduction

1. This claim arises out of a project (``the project'') relating to Dudley Hospitals, West Midlands, carried out by Summit Healthcare (Dudley) Limited (``Summit'') for the Dudley Group of Hospitals NHS Trust (``the Trust'') under the private finance initiative. The project comprised new building and refurbishment of the existing Russells Hall Hospital and the construction of day centres at Corbett and Guest Hospitals, all in Dudley. It included the provision of mechanical and electrical services including public health services. The defendant (``SRM'') was the main contractor for the project under a construction contract with Summit dated 17th May 2001 (``the Construction Contract''). The claimant (``EDS'') is a specialist in the provision of mechanical and electrical services. It carried out mechanical and electrical services (``M & E'') work on the project as sub-contractor to SRM between July 2001 and December 2002. EDS left the site in that month before completion of the M & E works for the project. It is common ground that SRM required EDS to leave the site. The project has continued and is continuing with replacement M & E sub-contractors.

2. SRM required EDS to leave the site because they contended that EDS were in repudiatory breach of contract. EDS claim £1,105,160.65 as the price of work done that has not been paid for. SRM deny liability for any sum, and counterclaim recovery of an overpayment and a declaration that they are entitled to be indemnified for all losses caused by EDS's repudiatory breach of contract. The main dispute between the parties is whether there was a sub-contract that obliged EDS to carry out the whole of the M & E works for the project, or only a contract or series of contracts of limited value in anticipation of the conclusion of a full sub-contract. I have to decide a number of preliminary issues. Those issues are listed at the end of this judgment, where I state my decisions on them.

3. The witnesses who gave evidence before me and to whom I refer in this judgment were the following. Mr. Graham Bradburn was Group Commercial Director of the UK parent company of EDS. He was responsible for all commercial agreements entered into by the group. Mr. Steven Taylor was, at the material time, Regional Director of EDS. His level of contracting authority was limited to £5 million. Part of his role was to obtain invitations to tender and work opportunities, and, in relation to an opportunity, to arrive at price and scope of work. Mr. David O'Shea was General Manager for the Birmingham office of EDS. Mr. Bradburn, Mr. Taylor and Mr. O'Shea gave evidence for EDS. Mr. Michael Wallace was at the material time until 31st October 2002 Regional Chief Quantity Surveyor of SRM responsible to the regional manager for the management of all the contractual and commercial issues within the relevant region. From November 2002 he was Company Commercial Manager of SRM, but continued to concern himself with the Dudley project to ensure continuity. Mr. Robert Mellor was Financial Manager for SRM for the Dudley hospitals project from April 2000 and for the duration of EDS's employment on the project. Mr. Wallace and Mr. Mellor gave evidence for SRM.

4. The background to this matter is this. From early 2000 SRM were involved in negotiations to become main contractor for the project. On 26th June 2000, SRM invited EDS ...

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