Farad Maftoon T/A FM Construction Services v Ahmed Sayed

JurisdictionEngland & Wales
JudgeDavis-White
Judgment Date07 July 2020
Neutral Citation[2020] EWHC 1801 (TCC)
CourtQueen's Bench Division (Technology and Construction Court)
Date07 July 2020
Docket NumberCase No: HT-2020-LDS-000005

[2020] EWHC 1801 (TCC)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN LEEDS

TECHNOLOGY AND CONSTRUCTION COURT (QBD)

Leeds Combined Court Centre

1 Oxford Row, Leeds LS1 3BG

Before:

HIS HONOUR JUDGE Davis-White QC

(SITTING AS A JUDGE OF THE HIGH COURT)

Case No: HT-2020-LDS-000005

Between:
Farad Maftoon T/A FM Construction Services
Claimant
and
(1) Ahmed Sayed
(2) Lebaneat (Yarm) Limited
Defendants

Mr Simon Arnold (instructed by Hay & Kilner LLP) for the Claimant

The First Defendant in person

The Second Defendant by its director Mr Ahmed Sayed

Hearing dates: 26 June 2020

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.

HIS HONOUR JUDGE Davis-White QC (SITTING AS A JUDGE OF THE HIGH COURT)

HH Judge Davis-White QC:

Introduction

1

In September 2018, the Claimant, Mr Farad Maftoon trading as FM Construction Services ((“Mr Maftoon”), entered into a contract for building works, involving demolition and shopfitting, at a restaurant at 48, High Street, Yarm, North Yorkshire. The question before me is whether he entered into that contract with the First Defendant Mr Ahmed Sayed (“Mr Sayed”), acting in a personal capacity, or with the Second Defendant, Lebaneat (Yarm) Ltd, acting by its director, Mr Sayed.

2

The current proceedings were commenced by Part 8 claim form issued on 22 April 2020.

3

The immediate background to the proceedings involves adjudication proceedings brought by Mr Maftoon against Mr Sayed pursuant to the Housing Grants, Construction and Regeneration Act 1996. In those proceedings, Mr Maftoon sought payment of what was described as payment number five dated 21 August 2019 in the sum of £162,948, with interest thereon. It was asserted that no “Pay-Less Notice” had been served. Mr David Blake DipArb, FRICS, FCIArb of Blake Newport (the “Adjudicator”) was appointed adjudicator on 4 December 2019.

4

An initial jurisdictional challenge was raised by Mr Sayed. He asserted, as he does in these proceedings, that the relevant contract was entered into by him on behalf of Lebaneat (Yarm) Limited (the “Company”) rather than by him personally. Following the submission of written evidence and submissions, by email dated 27 December 2019, Mr Blake resigned as adjudicator. This was on the basis of his conclusion, on the balance of probabilities, that the contracting party was indeed the Company rather than Mr Sayed personally. The result of that conclusion was that Mr Blake considered that he did not have jurisdiction and should resign.

5

In his email of 27 December 2019, Mr Blake pointed out that he had no power to make a binding decision in respect of his own jurisdiction in respect of the issue before him. Accordingly, these proceedings were launched with a view to obtaining a binding decision determining the issue of the identity of the parties to the contract.

6

I should also explain that before the Adjudicator, the points were taken, as they were before me, that the works completed by Mr Maftoon were of poor quality, that the price had been unilaterally increased and that the works were delayed so that the Company had suffered losses close to £500,000.

Representation

7

Mr Simon Arnold appeared on behalf of the Claimant. Mr Sayed appeared in person. Mr Sayed also sought permission to appear on behalf of the second defendant, which application I granted. He also invited me to hear from Ms Oana Cotoi, described in the papers before me as the Operations Manager for Mr Sayed's companies. The explanation for this request was that she was said to be more involved in certain matters and to be able to give me further information. As I pointed out, the court had laid down a timetable for the provision of written evidence which had been agreed between the parties. No written evidence had been provided from Ms Cotoi. I was not prepared to hear further evidence, orally, the first time from Ms Cotoi. Mr Sayed was clearly capable of representing the Company and there seemed no reason to allow another person to address me on its behalf. Accordingly, I refused this latter application.

8

Mr Sayed largely relied on the arguments already set out in the documents before me, including the written representations made to the Adjudicator. That written submission ends with a statement of truth, signed by the solicitor acting for the (now) Defendants, and which confirms his authority to sign the submission and confirming also that Mr Sayed believes that the contents of the submission are true.

The Evidence

9

As I have said, shortly after issue of the claim form the parties agreed a timetable for written evidence. No direction for cross examination was sought or made. The parties confirmed to me that they were content for the matter to be decided on the written evidence before the court. That meant that, the burden of proof lying on the claimant, where there was a dispute of fact raised on the evidence I would be unable to resolve the same and, unless the defendants' evidence was such that it could not be believed, for example because of other incontrovertible evidence or for lack of inherent consistency, I would have to accept the defendant's evidence (see e.g. Re Lo Line Electric Motors Limited [1987] Ch 447 and Day v RAC Motoring Services Ltd [1999] 1 All E.R. 1007).

10

Mr Sayed's witness statement did not contain the form of the statement of truth required by CPR PD 22 (it was in the more limited form prior to recent changes in the rules of court). Before me, Mr Sayed confirmed orally that the terms of the current statement of truth (which I took him through) applied to the statement. In light of that process, Mr Arnold did not object to the statement being received into evidence.

Background

11

Mr Maftoon has traded under the name “FM Construction Services” for nearly 30 years. He has a particular specialism in the leisure sector and regularly undertakes high specification restaurant fit out works. He has previously carried out “fit out work” for Mr Sayed, or his companies, on a number of occasions, including two Lebanese restaurants under the “Lebaneat” name at North Bailey and Young Street in Durham.

12

Mr Sayed is a restauranteur. At various times he has opened restaurants in Durham and Yarm. In Durham he has operated the Lebaneat Wrap House at 69, Claypath, Durham, the Lebaneat Express at 37, Young Street, Durham and Lebaneat at 47, North Bailey, Durham. The Lebaneat restaurant businesses have their own website but at all material times it was impossible to tell from that website that any of the restaurants or the restaurant businesses were operated or owned by one or more limited companies, let alone the identity of any such companies.

13

Mr Sayed has operated the relevant restaurants through limited companies. Lebaneat (Durham) Ltd is the main operating company. It runs the main Lebaneat restaurant on North Bailey, Durham. Lebaneat (Wrap House) Ltd operates the takeaway outlets known as Lebaneat Express at Young Street, Durham and the Wrap House at Clayparth, Durham. Lebaneat (Yarm) Limited is the company operating the restaurant at Yarm. In each case Mr Sayed is, as I understand it one of, or the sole director of, the company in question which is wholly or in part owned by him and/or family interests of his.

14

Each of Mr Sayed and Mr Maftoon rely upon prior dealings between them in which Mr Maftoon carried out work for Mr Sayed on his restaurants/outlets.

i) Mr Maftoon says that his recollection is that he contracted with Mr Sayed in respect of those projects. He has no particular knowledge of Mr Sayed's business structures although he was aware that he operated a number of Lebanese style restaurants under the “Lebaneat moniker”

ii) Mr Sayed says that Mr Maftoon, when dealing with Mr Sayed, knew that Mr Sayed was acting for and on behalf of limited companies and not personally. In this respect he relies on an invoice dated 12 July 2016 which is addressed to “Lebaneat express”. He says that this shows that Mr Maftoon knew that the contract was not with him but one with his company and that, just as that had been the case in 2016 so it was in 2018.

General: Correspondence, web pages for Lebaneat, footers for emails

15

Save, where I make clear below, none of the emails from Mr Sayed or Lebaneat which I refer to below have any text identifying any limited company, whether by name, officer or anything else. Similarly, the email addresses used to send emails from or to persons at Lebaneat do not clearly identify any limited company involvement. The website for the Lebaneat restaurants also fails to mention or identify any limited company. The significance of this is that theses matters do not provide material from which it might be inferred that Mr Maftoon did in fact know that in his dealings with Mr Sayed, Mr Sayed was acting on behalf of the company.

The Initial Quote: 20 February 2018

16

Mr Sayed approached Mr Maftoon, in about February 2018, to assist in building works at his latest proposed Lebaneat restaurant which was to be situated at 48, High Street, Yarm (the “Yarm Premises”). At this stage Mr Sayed had not secured a lease for the Yarm Premises, not had the Company been incorporated. At this stage the Yarm Premises had had most recently been used as the branch of a bank.

17

Mr Maftoon says that at no point during the discussions between them did Mr Sayed say he was inquiring on behalf of a company and that he, Mr Maftoon, therefore assumed that any contract was to be with Mr Sayed personally.

18

On 20 February 2018 at about 08:19 Mr Maftoon emailed Mr Sayed a quote for certain demolition and plastering works at the Yarm Premises (the “Initial Quote”).

19

Work could not proceed immediately, no lease had been granted to Mr Sayed (or any of his...

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