Boyd & Forrest v Glasgow and So.-Western Railway Company
| Jurisdiction | Scotland |
| Judgment Date | 10 November 1910 |
| Date | 10 November 1910 |
| Docket Number | No. 11. |
| Court | Court of Session |
Ld. Johnston, Lord Justice-Clerk, Lord Ardwall, Lord Dundas, Lord Low.
RecompenseQuantum meruitConstruction of RailwayClaim, in excess of contract price, for value of work done.
ReparationFraudNegligenceContract to construct RailwayFalse Representations as to nature of workFailure to disclose material circumstance as to nature of work.
ContractConstructionConditions limiting liabilityFraudPersonal objectionContract induced by fraudFraudulent party barred from founding on conditions in his favour.
ContractFraudReductionReparationContract induced by fraudContract unreduced and work completedCompetency of action of damages.
A railway company invited tenders for the construction of a line of railway, and for the information of intending offerers exhibited what purported to be a journal of bores taken along the proposed line. A lump sum written contract was concluded, which stated that the Company did not guarantee the accuracy of the journal of bores, and would not be liable for claims in respect of any error in, or omission from, the specification of work prepared by them. The constructors were also taken bound, inter alia, to make good any injury to water-pipes caused by their operations.
During the progress of the work it was discovered that the nature of the ground was materially different from that which the journal represented it to be, and it ultimately appeared that the bores had been taken by servants of the company, who, as the company knew, had no skill in such work, and that the so-called journal was not a record kept by the borers, but was compiled by the company's engineer from notes supplied by the borers. In compiling the journal, the engineer had in several instances inserted, not what the borers said, but what the engineer thought they meant, with the result that ground was called soft, when in reality it consisted, and had been reported by the borers to consist, of hard material. It was also discovered that a bridge required to be built at great expense to carry certain water-pipes, the existence of which was perfectly well known to the railway company but was not disclosed by them to the contractors. In consequence of these circumstances the work cost far more than the contract price, on account both of the extra labour required and of the disorganisation caused by the unexpected obstacles. The contractors made frequent protests while the work was in progress, but were induced to continue by assurances on the part of the company, and by some extra payments.
After the completion of the line the contractors brought an action against the company, concluding in name of recompense, or alternatively in name of damages, for a sum to cover the extra cost of constructing the railway.
Held (1) that the pursuers were not barred from insisting on their claim by having gone on with the work; (2) that it was not necessary for the pursuers to reduce the contract prior to insisting in their claim; (3) that the representations made by the defenders to the pursuers with regard to the journal of bores were false and fraudulent; (4) that the contract was inapplicable as the basis of charge for the work executed, in respect that the pursuers were induced to enter into it by the fraud of the defenders; (5) that the defenders were barred by their fraud from founding on the clauses in the contract protecting them from responsibility for inaccuracies in the information supplied to contractors, as such clauses applied only to honest mistakes; (6) that the failure of the defenders to inform the pursuers of the existence of the water-pipes was negligent, and entitled the latter to recover the whole loss suffered in consequence; and (7) that the pursuers having on the defenders' employment executed the work in respect of which the action was brought, were entitled to reasonable compensation therefor, either in name of quantum meruit or in name of damages.
In November 1907 Messrs Boyd & Forrest, contractors, Kilmarnock, brought this action against the Glasgow and South-Western Railway Company. The summons concluded for payment by the defenders to the pursuers of the sum of 106,688, 13s. 11d. sterling, conform to a detailed account which was lodged by the pursuers.
The action arose out of a claim for work done by the pursuers in constructing a line of railway, about 121/2 miles long, from Dalry to Johnstone.
In March 1900 the defenders advertised for tenders for the construction of the line in question. The pursuers made a tender, their tender was accepted on 12th April 1900, and a formal contract between the parties was executed in September 1900. The pursuers' knowledge of the ground where the work was to be done was derived from a document exhibited to them by the defenders, which purported to be a journal of bores taken along the line of the proposed railway.
The contract* provided that the pursuers should execute the whole work described in the specification and schedule annexed to the contract for the lump sum of 243,090, and within thirty months from 12th April 1900. Extra work was to be paid for at an agreed-on rate. The pursuers were bound to make good all injury caused by their operations,
inter alia, to water-pipes, and to relieve the pursuers of all statutory obligations with regard to the same. The defenders were not to be responsible for any errors or omissions in the information supplied by them, and, in particular, for any inaccuracy in the journal of bores.
The work was commenced in April 1900, and was not completed until May 1905, in consequence of the difficulties which emerged. In particular, it appeared that the nature of the ground was in many instances different from that which the journal of bores represented it to be, and instead of being soft was composed of rock or hard material. Further, the pursuers discovered that the proposed line was crossed by the Paisley main water-pipes, and a special bridge had to be built to carry them. The existence of these pipes was known to the defenders before the contract was made, but was never mentioned by them to the pursuers.
During the progress of the work the pursuers made frequent protests, which were met by assurances on the part of the defenders, who also made payments for extra work and ex gratia allowances for special difficulties encountered, amounting to 28,880.
After the completion of the work this action was brought, the sum sued for being the difference between the amount which the pursuers alleged that the work had cost (378,658,13s. 11d.), and the amounts paid to them (contract price, 243,090, and extra payments, 28,880).
The pursuers averred:(Cond. 2) In and after September 1900, the defenders employed the pursuers to execute certain works necessary for the construction and formation of the Dalry and North Johnstone Railway.
(Cond. 3) In accordance with their employment the pursuers duly executed said work. The total sum due by the defenders to the pursuers in respect of the work executed by them amounts to 378,658, 13s. 11d. To account of said sum the defenders have from time to time made payment to the pursuers of sums amounting in all to 271,970, leaving a balance presently due and resting owing by the defenders to the pursuers of 106,688, 13s. 11d., which is the sum sued for. A detailed account shewing the work done by the pursuers on the defenders' employment, and the sum due by the defenders to the pursuers in respect thereof, is herewith produced and referred to. Alternatively, the pursuers have suffered loss and damage to the extent of the sum sued for in respect of the fraud, negligence, and breach of contract of the defenders, all as after mentioned.
(Cond. 4) A contract was originally entered into between the pursuers, of the first part, the defenders, of the second part, and the cautioners therein mentioned, of the third part, dated 16th and 18th September 1900, for the execution of certain work. The work executed by the pursuers was not executed under said contract. The said contract and relative specification schedule are entirely inapplicable as the basis of charge for the work executed by the pursuers.
(Cond. 5) Before the pursuers estimated and tendered for the execution of railway works set forth in the specification schedule, the plans and sections of the work, and also the journal of bores, were from time to time shewn by the defenders' engineer to the pursuers. The said journal of bores purported, and was represented by the defenders, to be a statement of the result of bores taken at various points along the line of the proposed railway. Said journal afforded the basis upon which the schedule of quantities and sectional plans were framed by the defenders, and formed the basis and also an essential part of the contract above referred to of date 16th and 18th September 1900. The defenders are called upon to produce the said journal of bores. Said specification, schedule, plans, and relative journal were furnished by the defenders for the purpose of enabling the pursuers to fairly estimate the character and extent of the work for which they were invited to tender and fix the rates and prices at which they were willing to execute the same. The pursuers thereafter submitted to the defenders a detailed priced estimate for the work. In so doing the pursuers relied, as they were entitled to rely, and as the defenders intended them to rely, on the good faith of the defenders and the substantial accuracy of the documents furnished by the latter. The rates and prices in the pursuers' estimates were fixed, and the contract between parties entered into, solely with reference to the work therein contemplated and specified, and the operations therein detailed. In point of fact, the work as actually carried out was so materially different in character and extent from that contemplated, specified, and detailed as to render the provisions of the...
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