ERDC Group Ltd v Brunel University
| Jurisdiction | England & Wales |
| Judge | His Honour Humphrey Lloyd QC,Re |
| Judgment Date | 29 March 2006 |
| Neutral Citation | [2006] EWHC 687 (TCC) |
| Docket Number | HT 04 111 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 29 March 2006 |
[2006] EWHC 687 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Humphrey Lloyd Qc
HT 04 111
Simon Hargreaves, instructed by Pinsent Masons, appeared for the claimant, ERDC.
Duncan McCall, instructed by Nabarro Nathanson, appeared for defendant, Brunel.
Pursuant to the Practice Statement of 22 April 1998 this is the official judgment of the court and no note or further record is to be made.
In this action ERDC claims payment for the construction of new sports facilities for Brunel University (Brunel) at a location known as Site 3, which forms part of Brunel's Uxbridge campus. The works, known as "Phase 1", comprised a new outdoor athletics track with associated field events, an equipment storage building, and associated floodlighting and landscaping ("the works"). Later phases were to comprise pitches for football, rugby and hockey, and the upgrading of existing netball and tennis courts.
In December 2001 ERDC submitted a tender for the works which were to be carried out on the basis of the JCT Standard Form of Contract With Contractor's Design, 1998 Edition. Under the proposed terms Carless and Adams Partnership (CAP) were to be Brunel's Employer's Agent and Quantity Surveyor. (Brunel's other consultants included Building Design Partnership (BDP) for landscaping and "GVA Grimley" (Grimley) for planning.) On 5 February 2002 Brunel decided, having considered competing tenders, to appoint ERDC to undertake the works. However, it was also decided that the formal execution of contract documents ought to be deferred until after the grant of full planning permission (which was expected in a relatively short space of time). Pending full planning permission, it was agreed that ERDC would progress with the design of the works under the terms of a letter of appointment. The first letter of appointment was issued on 6 February 2002. A further letter of appointment was issued on 30 April 2002, followed by a third on 15 May 200All three letters were returned countersigned by ERDC as provided by their terms. ERDC commenced construction of the works on 27 May 200Clear planning permission had still not been obtained when ERDC started work, and two further letters of appointment were issued on 1 July 2002 and 2 August 200(ERDC did not countersign and return these letters.) The authority under the final of these letters expired on 1 September 200Contract documents were never executed. Following this date ERDC continued with the works even though no further letters of appointment were forthcoming. The athletics track was completed on 22 October 2002, some 3 1/2 weeks after the date that ERDC had planned to meet. The majority of the remaining works were finished by the end of November 2002.
On being sent contract documents for signature ERDC, in a letter to CAP of 3 December 2002, declined to do so and claimed (for the first time) that it would only continue work on the basis that all work carried out by it would be valued on a quantum meruit basis rather than in accordance with the valuation principles applicable under the JCT Standard Form of Building Contract with Contractor's Design ("the JCT Valuation Rules"). Its letter read:
"Dear Sirs
Brunel University – Running Track
We refer to our meeting at the University on 20 November 2002 and confirm having received from you various packages referred to as "Contract Documents".
As you are aware the letter of intent expired during early September and the work content of the project has changed significantly disrupting and changing the original planned intent. It is therefore not possible for us to sign these Contract Documents and we write to confirm formally that the terms thereof are unacceptable to ERDC.
Notwithstanding the foregoing, we are prepared to continue work on the project in accordance with the agreed scope of works and any changes instructed thereto but strictly on the basis that all work carried out by us is valued on a Quantum Merit basis.
Unless we hear from you to the contrary, then we will assume that you are agreeable to the foregoing and we will continue to construct the works on the foregoing basis and will discuss with you our weekly and monthly programming including all costing information available."
Prior to December 2002 ERDC had submitted eight Applications for Payment based on the Contract Sum Analysis referred to in the Second Recital of the proposed conditions of contract and following the JCT Valuation Rules. The Contract Sum Analysis had evidently been prepared by CAP from the Contract Sum Analysis which had been appended by ERDC to its tender dated 3 December 2001 with amendments and which was then endorsed and adopted by ERDC as the basis for its applications for payment submitted between 10 June (Application for Payment No 2) and 29 November 2002 (Application for Payment No 8).
Brunel did not accept ERDC's contention that all the work should be valued on a quantum meruit basis. At a Site Meeting No. 9 on the date after ERDC letter, 4 December 2002, CAP said that ERDC had to provide reasons why they were not willing to sign the documents that it had and without them work would not be valued "on a quantum meruit basis". Despite a further request from CAP on 16 December 2002, ERDC did not do so until it sent a letter of claim in July 2003, although in the meantime it continued to maintain its basic position (see its letter of 23 December 2002). In this action ERDC's main claim is that all the works should be valued on a costs plus basis. Brunel says that the works should be valued in accordance with the arrangements proposed and, until late 2002, followed by both parties.
ERDC left site, by agreement, at the end of March 2003. The works were then not entirely complete. After December 2002 ERDC had completed the mains electrical connection, lighting installation, planting and top soiling, construction of a pedestrian crossing to Kingston Lane, the placing of turf strips/fencing as a temporary measure to either side of the track, fencing to the tennis courts and other minor fencing works, and screeding and drainage works to the steeple jump.
ERDC called, as witnesses of fact, Mr Colin Blank, Contracts Manager of J B Corrie & Co Ltd, ERDC's fencing sub-contractor; Mr David Comminskey, a General Foreman employed by ERDC; Mr Donald Cunningham who was employed as a quantity surveyor by ERDC until July 2003 based in ERDC's Head Office in Edinburgh and who gave evidence by videolink from Malaysia); Mr Gordon Thompson, Contracts Manager of the Sports Surfacing Division of ERDC; Mr Paul Merriman, a Foreman employed by ERDC; Mr Dan Shotton, a Partner in DW Shotton Landscapes, ERDC's Landscaping sub-contractor; Mr Brian Blunden, Floodlighting Division Manager for Lorne Stewart Plc, ERDC's Lighting sub-contractor; Mr Joseph Lenzie, a Site Agent employed by ERDC; Mr David Reynolds, Sports Surfacing Director of ERDC Group Limited; Mr Ronald G Mitchell, Managing Director of ERDC Group Limited. The evidence of Mr Niall Barry was admitted under the Civil Evidence Act. There were witness statements from others (Mr Denis Betts, Mr William Kinross and Mr Jon Mawson) who were not called but whose evidence was treated as agreed. In the event little reference was made to witnesses that were not called.
Brunel called Mr Stuart Binnie, a Partner in the firm of Carless and Adams Partnership (CAP) and a Chartered Quantity Surveyor; Mr John Martin Jones, a landscape architect working for Building Design Partnership (BDP, retained by Brunel); Mr Phillip Christopher Keeley, a Senior Consultant at Materials Science Consultants Limited; and Mr Tom Enright, Clerk of Works, of Hickton Consultants. The evidence (that I admitted) of Mr David Rumsey, Commercial Manager of Mace Limited (trading as C2C Management Limited) was agreed. The evidence of Mr Paul Farley, Brunel's Deputy Director of Estates until mid 2004, was received under the Civil Evidence Act.
ERDC did not call any expert opinion evidence on delay. It called as its expert on quantum Mr Robert Burt, an Associate Director of Trett Consulting. Brunel called Mr Ian Robinson, a Partner in Davis Langdon LLP, Chartered Quantity Surveyors, to express opinions on matters of delay and to give evidence in relation to quantum. Mr Burt was somewhat constrained on quantum by his instructions, e.g.
"My instructions in respect of ERDC's Primary Case and hence this present exercise, are that the original tendered prices are not binding, relevant to or determinative of the measure of reasonable cost".
Mr Burt expressed no opinions about delay and disruption. Mr Ian Robinson had carried out a detailed analysis that was contained and discussed in his Report on Delay. Both experts had put in an immense amount of work in preparing their reports, in answering questions and in four joint and other helpful statements.
There was the usual volume of documents. An indication of the complexity of the ramifications of the case may be seen from the length of the written closing submissions,
As a general preliminary observation I have to say that I found that the conduct of each party during the work was not appealing. ERDC, although evidently a leader in the design and execution of sports grounds, displayed a marked lack of consistent and effective management. It was needed on a design and build project which was being carried out way from its base in Scotland and, inevitably, with numerous sub-contractors and suppliers. A high degree of skilful co-ordination and supervision was plainly required but was not apparently provided. On the other hand in 2002 Brunel's approach (with which I...
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