Bryen & Langley Ltd v Boston (Martin)
| Jurisdiction | England & Wales |
| Judge | JUDGE RICHARD SEYMOUR QC,H.H. Judge Richard Seymour QC |
| Judgment Date | 04 November 2004 |
| Neutral Citation | [2004] EWHC 2450 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No:HT03232 |
| Date | 04 November 2004 |
[2004] EWHC 2450 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St Dunstan's House
133137 Fetter Lane
London EC4A 1HD
His Honour Judge Richard Seymour Qc
Case No:HT03232
Graeme Sampson (instructed by Martin Amey & Co for the claimant)
Michael Bowsher (instructed by C J Hough & Co for the defendant)
JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
Introduction
The claimant in this action, Bryen & Langley Ltd ("B&L"), carries on business as a building contractor. The defendant, Mr Martin Boston, is the husband of Orna Boston. In August 2000 Mrs Boston exchanged contracts for the purchase of two flats, numbered 4 and 5, at 82, New Cavendish Street, London W1. The intention was that those two flats should be converted into one flat. It is convenient, therefore, to refer in this judgment to the property which Mrs Boston agreed to purchase as "the flat".
Although Mrs Boston was to fund the purchase of the flat and the undertaking of the necessary works to put it into the condition in which she and her husband wanted it, it was Mr Boston who undertook the making of arrangements for those works to be done. It was originally anticipated that the vendor of the flat, a company called Newthorn Properties Ltd ("Newthorn"), would, as part of the purchase arrangements, cause work to be done to bring the flat to what was described as "the first fit-out stage". Apparently Newthorn arranged for a company called McCabe Building (UK) Ltd ("McCabe") to undertake the necessary works. There were, it seems, problems in respect of the quality of the work done by McCabe and also concerning the time which those works took. In those circumstances it was agreed between Newthorn and Mrs Boston that the Bostons themselves would arrange for builders to be engaged to undertake fitting out work in the flat prior to completion of the purchase.
Mr Roy Welling is a quantity surveyor and practises as such under the style "Roy Welling Associates". In about the middle of March 2001 Mr Boston instructed Mr Welling to prepare a bill of Quantities in relation to the fitting out works and to obtain quotations from builders for the carrying out of the works described in the bill. In this judgment I shall call the works described in the bill "the original works". Mr Boston also engaged an architect, Mr David Gallagher, to undertake the design of the original works. In the preliminaries section of the bill prepared by Mr Welling it was indicated at folio A20/130 that the form of contract intended to be entered into with the successful tenderer was the Standard Form of Building Contract, 1998 Edition, Private with Quantities incorporating amendments 1–3 produced by The Joint Contracts Tribunal Ltd I shall refer to that form of contract in this judgment as "the JCT Form". In the same folio it was stated that:
"The Contract will be executed under hand."
The JCT Form contains provision, in Article 5, that:
"If any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 41A."
Clause 41A of the JCT Form sets out over nearly three pages of text detailed provision for the procedures to be followed in an adjudication and the consequences of that process being adopted. The effect of the decision of an adjudicator is dealt with in clause 41A.7:
"1 The decision of the Adjudicator shall be binding on the Parties until the dispute or difference is finally determined by arbitration or by legal proceedings or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given.
2 The Parties shall, without prejudice to their rights under this Contract, comply with the decision of the Adjudicator; and the Employer and the Contractor shall ensure that the decision of the Adjudicator is given effect.
3 If either Party does not comply with the decision of the Adjudicator the other Party shall be entitled to take legal proceedings to secure such compliance pending any final determination of the referred dispute or difference pursuant to clause 41A.7.1."
Clause 30.1 of the JCT Form is concerned with interim certificates. The basic obligation of the Employer in clause 30.1.1.1 is to pay the amount of an interim certificate by the appropriate "final date for payment". However, that is not an absolute obligation. By clause 30.1.1.4 it is provided that:
"Not later than 5 days before the final date for payment of the amount due pursuant to clause 30.1.1.1 the Employer may give written notice to the Contractor which shall specify any amount proposed to be withheld and/or deducted from that due amount, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground."
If no such notice is given the consequence is that for which clause 30.1.1.5 provides:
"Where the Employer does not give any written notice pursuant to clause 30.1.1.3 and/or to clause 30.1.1.4 the Employer shall pay the Contractor the amount due pursuant to clause 30.1.1.1."
One of the contractors invited to tender for the execution of the original works was B&L. B&L's tender was the lowest. There followed negotiation concerning the tender. That negotiation resulted, ultimately, in a reduction of the tendered amount from £532,404 to £436,923.
A concern of Mr and Mrs Boston, certainly by June 2001, was that the original works should be completed as soon as possible. In order to achieve that Mr and Mrs Boston were prepared to pay a bonus for early completion. They also wanted work to get under way promptly. Mr Welling suggested, and Mr Boston agreed, that to enable B&L to start work Mr Welling should write a letter on Mr Boston's behalf. That letter was dated 12 June 2001 and was in these terms:
"Further to our recent meeting I can now confirm on behalf of our Client, Mr Martin Boston, that it is his intention to proceed with the works with your Company in accordance with your Tender and subsequent amendments as appended in the sum of £436,923 for a Contract Period of 16 weeks, possession 18 June 2001. The Contract has been varied to include the levelling of the floors – the cost of which has yet to be ascertained. Access to the site is immediately available.
The Contract will be executed under the Standard Form of Contract 1998 Edition, Private with Quantities and, should the project not proceed, your reasonable ascertainable costs will be recoverable from the Client but will not include any loss of profit or overhead recovery.
The Contract Documents will be drawn up shortly.
At our meeting on 6 June, Mr Boston offered a Bonus Scheme (details to be agreed) wherein he would offer payment of £2,000 for every week by which the completion date was brought forward.
We look forward to working with you on this project, and trust that it is successfully concluded on time, within budget, and to the required quality standard."
After the letter dated 12 June 2001 was despatched B&L proceeded with the original works. However, B&L was also asked to undertake various other works, some seemingly consequent upon defects in work done by McCabe. At all events, the cost of the works which B&L in fact undertook increased substantially beyond the sum of £436,923 mentioned in the letter of 12 June 2001, and the duration of the works became extended.
Under cover of a letter dated 28 June 2001 Mr Welling sent to Mr Paul McMahon of B&L draft contract documents. The letter said:
"Please find enclosed Contract documents for the above project for your perusal and signature.
When you have completed the documents, perhaps you would return both sets to us in order that we may forward them to the Employer for his signature, following which one copy will be returned to you for your records.
Should you have any queries on the documentation, do not hesitate to contact me."
Precisely what was sent under cover of the letter did not emerge from the evidence put before me.
B&L wrote a letter dated 28 August 2001 to Mr Welling which was in the following terms:
"Please find enclosed both sets of Contract Documents duly signed and witnessed as requested.
We trust that you find the enclosed in order, and look forward to receipt of our copy upon completion by the Client.
Whilst writing we note that within the Appendix you have advised that the majority of the works are not subject to VAT From this I assume that yourselves or the Architects have an assessment of which bill items are applicable for VAT, and would ask that you forward a copy to ourselves."
Again, what exactly was the form of the sets of contract documents sent under cover of the letter did not appear from the evidence put before me. What was clear, however, was that B&L had commenced work before 28 August 2001 and that no JCT Form was ever signed by or on behalf of Mr Boston.
As work progressed Mr Gallagher issued what purported to be interim certificates setting out sums to be paid to B&L. The last of those certificates was one numbered 11 and dated 17 July 2002. In that certificate the gross value of work completed by B&L was recorded as £660,800. The net sum said to be due for payment in the certificate was £115,995. What happened following the issue of certificate number ii was described by Mr Boston in his witness statement put before me in this way:
"On 8 August 2002 I agreed with Mr McMahon that, in return for payment to him of £50,000, Bryen & Langley would not seek any further payment before completing their work. I recorded the agreement in my letter of that date."
A copy of the letter referred to was put in evidence. The relevant part of it was a post scriptum. That was in...
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