Adonis Construction v O'Keefe Soil Remediation
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE |
| Judgment Date | 05 August 2009 |
| Neutral Citation | [2009] EWHC 2047 (TCC) |
| Date | 05 August 2009 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-09–266 |
[2009] EWHC 2047 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: Mr Justice Christopher Clarke
Case No: HT-09–266
Susan Lindsey (instructed by Silver Shemmings LLP) for the Claimant
Karim Ghaly (instructed by Steptoe & Johnson) for the Defendant
Hearing date: 21st July 2009
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
MR JUSTICE CHRISTOPHER CLARKE:
The claimant (“Adonis”) is a building contractor. The defendant (“O'Keefe”) is a soil remediation contractor. O'Keefe carried out works of testing and soil stabilisation on a site where Adonis was acting as the main contractor. I have before me an application by Adonis for summary judgment to enforce an adjudicator's decision dated 22 nd May 2009. O'Keefe resists the application on the ground that the award was made, so it is said, without jurisdiction because there was no construction contract in writing as required by section 107 (1) of the Housing Grants Construction and Regeneration Act 1996.
The facts
The facts are in large measure not in dispute. On 25 th October 2007, O'Keefe received a tender enquiry from Adonis in respect of soil stabilisation works (“the Works”) at Westcott Venture Park in Aylesbury (“the Site”).
On 2 nd November 2007, O'Keefe submitted a quotation for the Works. The quotation stated:
“suitability testing must be carried out prior to commencement of our works to prove the suitability of the site soils for stabilisation …”
and that
“the level or amount of any liquidated or consequential damages are to be agreed prior to any contractual commitment.”
Adonis did not respond to the quotation.
By an email dated 28 th February 2008, Mr McQuade of Adonis informed Mr Horsley of O'Keefe that Adonis had not responded to the quotation because they intended to award the Works to another sub-contractor. However, the other sub-contractor had been unable to secure PI insurance and Adonis wished to explore the possibility of O'Keefe undertaking the Works. In the email, Mr McQuade provided the results of tests on the candidate material for stabilisation. The tests had been carried out to establish the sulphate level/swell. The composition of the soil determines the nature and quantity of the compound that needs to be added.
By an email dated 29 th February 2008, Mr Horsley confirmed to Mr McQuade that O'Keefe would be prepared to carry out the Works at the rate previously quoted and could mobilise in the week commencing 17 th March 2008.
On 3 rd March 2008, Mr Horsley attended a pre-start meeting at the Site with representatives of Adonis. Mr McQuade was not present. At the meeting, Adonis requested that the Works be commenced on 6 th March 2008. The minutes (a) described the work, (b) stated that the form of contract would be DOM 2, with amendments 1 – 8, (c) specified a contract period of 1 week and (d) expressed the contact sum of £38.710.80 as a lump sum.
After the pre-start meeting, by an e-mail dated 3 rd March 2008, Mr Horsley confirmed to Mr McQuade that O'Keefe could mobilise on 6 th March if Adonis was able to provide a copy of the sub-contract order with letter of intent. Attached to the email was an amended quotation for the Works, also dated 3 rd March 2008. The quotation again contained the terms set out in paragraph 3 above.
th March 2008
By an e-mail of 4 th March Mr Horsley sent to Adonis inter alia a method statement and trusted that what he had sent was all that was necessary for Adonis to place an order.
By an attachment to a later email dated 4 th March 2008 Mr McQuade provided Mr Horsley with the letter of intent. The letter of intent said:
”We confirm our intention to enter into a sub-contract with you in accordance with your sub-contractors obligations contained within the following documentation …”
Numerous documents were then specified, some of which, including the Minutes of the pre-start meeting, were to follow. The letter continued;
”The order for Soil stabilisation and associated works is to be for the fixed price of £38,710.8 Net, and will be Lump Sum strictly in accordance with the conditions within the JCT 98 – SFBC WITH CONTRACTORS DESIGN subcontract form DOM 2. You are to carry out these works in 1 Weeks, commencing 06/09/2008. We require receipt of your Method Statement and Risk Assessment for above named project no less than four weeks prior to commencement.”
O'Keefe was invited to take the letter as “…an instruction to proceed procurement [sic] of all necessary labour and materials to enable you to meet the on site date…” The letter further provided:
“In the unlikely event that the sub contract does not take place you will be entitled to claim for substantiated costs up to the date of abortion. No loss of profit or consequential loss will be allowed.”
With the letter of intent, Mr McQuade also provided a copy of O'Keefe's amended quotation for the Works, dated 3 rd March 2008. This copy contained manuscript additions. Next to the typed words in paragraph 1.2 of Appendix 1 “Rates are based with the limited soil information provided, we will be required to carry out on site suitability testing to test for moisture content, sulphates and general site condition 4 weeks before commencement on site…” someone, probably from Adonis, had written “Testing on-going from 3/3/08”.
By a further email dated 4 th March 2008, Mr McQuade provided Mr Horsley with a copy of the minutes of the pre-start meeting, which had been prepared by Adonis. Mr Horsley was asked to sign and return a copy “which will enable us to raise our official order”.
On 4 th March 2008, Mr Horsley returned the signed minutes by way of a scanned fax attached to an email. The fax cover sheet stated:
”We look forward to receiving your formal order…
Within our quotation you will find we'd requested 14 day payment terms, which I hope will not be a problem for you. We've also carried out suitability testing on the material…
However, as we discussed the results of these will not be available until after we've completed our works.
I confirm the plant and labour will arrive on Thursday as agreed.”
As will be apparent from the foregoing O'Keefe's conditions had made plain the need for suitability testing prior to the commencement of the works. Adonis had carried out some tests and provided the results to O'Keefe. O'Keefe had also carried out some tests but did not have the results and the work was due to begin in two days. If the latter tests showed that what O'Keefe was going to do on the basis of the former tests was inappropriate there was going to be a problem.
The draft order
In an email dated 5 th March 2009, Mr McQuade stated: “Please find attached a copy of our draft subcontract order for the above contract. The official order will be signed off and issued in the post in due course.” Attached to the email was a copy of the draft sub-contract order. This stated:
”DRAFT SUB-CONTRACT ORDER [No order number]
The appended attestation page is to be duly signed Under [sic] seal and returned to the undersigned within 7 days.”
The draft order incorporated the DOM 2 conditions with amendments and, also, as Appendix D, the signed minutes of the pre-start meeting of 3 rd March 2008. These minutes were said to “take precedence” over conflicting terms in the draft order. Appendix B specified a contract sum of £38,710.80 and “Execution—As a deed”. It also incorporated the adjudication clause from the DOM conditions.
There were two further bespoke conditions which Adonis sought to introduce. The first was a provision that:
“All costs in relation to adjudication to be borne by the Sub-Contractor.”
(“the costs clause”).
The second was a manuscript addition (the “risk clause”) to Mr Horsley's fax of 4 th March 2008, which had transmitted the signed version of the minutes. To Mr Horsley's note that O'Keefe's suitability test results would not be available until after the Works were complete, Mr McQuade added:
“Note: In the event that the test results are not compatible with the treatment carried out then any remedial works and all associated costs, including consequential costs, will be the sole responsibility of O'Keefe Soil Remediation Ltd – as agreed L. Horsley/S. McQuade 5.3.08.”
[Emphasis added]
There was, so it appears, a conversation between Mr Horsley and Mr McQuade on 5 th March which, according to Mr Horsley, is inaccurately recorded in the risk clause. According to him what he said to Mr McQuade was that if the final results of the sample taken by O'Keefe showed that a different treatment was needed O'Keefe would undertake any additional treatment at its expense but it was not agreed that they would be responsible for consequential losses.
O'Keefe contends that Mr McQuade's email of 5 th March 2008 and the attached draft order were not in fact received by Mr Horsley until 7 th March 2008. The date of receipt has been identified by O'Keefe's external IT support company and is visible from a screen print of the results of a search of Mr Horsley's email account.
The draft order was never signed and returned by O'Keefe.
On 6 th March 2008, O'Keefe commenced the Works by mobilising. On 7 th March 2008, O'Keefe commenced work at the site. The Works were completed on or around 11 th March 2008.
On 22 nd April 2008, Adonis sent O'Keefe a numbered and dated sub-contract order in respect of the Works. The order provided
“The appended attestation page is to be duly signed and returned to the...
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