Fleming Buildings Ltd V. Mrs. Jane Forrest Or Hives+mrs. William Forrest
| Jurisdiction | Scotland |
| Judge | Lord Mackay of Drumadoon,Lady Paton,Lord Kingarth |
| Neutral Citation | [2010] CSIH 8 |
| Published date | 10 February 2010 |
| Court | Court of Session |
| Date | 10 February 2010 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Kingarth Lady Paton Lord Mackay of Drumadoon | [2010] CSIH 8 OPINION OF THE COURT delivered by LORD KINGARTH in causa by FLEMING BUILDINGS LTD Pursuers and Respondents; against MRS JANE FORREST or HIVES First Defender and Reclaimer: and MR WILLIAM FORREST Second Defender and Reclaimer _______ |
Alt: Malone, Solicitor Advocate; Bell & Scott
10th February 2010
Introduction
[1] In or about May 2001 the first defender and reclaimer ("the first defender") purchased a house and ground at 17 Fairyknowe Gardens, Bothwell. She and her husband, the second defender and reclaimer ("the second defender"), intended to build an extension to this house and thereafter to live in it themselves. The extension was constructed but the work was defective and the defenders decided to demolish the extension and the original house and build a new house on the site. They instructed Mr Gordon Gibb to be their architect and Mr Peter Imrie to be their chartered surveyor. Following certain communings with the pursuers and respondents ("the pursuers"), in relation to which detailed evidence was given before the Lord Ordinary, the pursuers commenced work on site on or about 23 January 2006. Work progressed and certain payments were made therefor.
[2] On 17 July 2007 the pursuers' solicitors served a notice of adjudication on the defenders. In the course of the adjudication proceedings, the defenders' solicitors submitted inter alia that there was no contract between the parties and accordingly that the adjudicator had no jurisdiction and should resign. After sundry procedure, including hearing the evidence of three witnesses for the pursuers and four witnesses for the defenders, and legal submissions on behalf of both parties, the adjudicator found that the parties to the contract were the pursuers and the defenders. In her decision letter, which was dated 26 September 2007, she decided that the defenders were to pay the pursuers the sum of £112,598.75, within seven days of the date of the decision, together with interest on sums certified in interim certificates and joint and several liability for the fees and expenses in relation to the adjudication.
[3] The defenders have made no payment to the pursuers in respect of these sums, so the present commercial action for payment was raised in late October 2007. The matter came before the Lord Ordinary by way of a preliminary proof, which lasted for 8 days in March and May 2008. A number of issues were canvassed. For present purposes it is enough to note that the main issue was whether there was, as contended for by the pursuers, a contract between them and the defenders. It was agreed that if there was such a contract it made provision for reference of any dispute between the parties to adjudication. It was further agreed that if there was no such contract between the parties the adjudicator had no jurisdiction. In that connection the defenders' primary contention was that the contract was between the pursuers and KWF Homes Limited, ("KWF") a company of which the defenders were the sole shareholders and directors; alternatively, there having been no consensus as to the parties there was no contract.
[4] The Lord Ordinary heard evidence from four witnesses on behalf of the pursuers (Gordon Gibb, architect and director of Gibb Architects Ltd, and Ronald Burrows, Kennedy Rodger and Michael Burrows, all directors of the pursuers, the last named being managing director), and from four witnesses on behalf of the defenders (the two defenders themselves, John Thomson, an architect employed by Gibb Architects Ltd and Peter Imrie, quantity surveyor). A considerable body of documentary evidence was referred to at the hearing.
[5] Having set out in detail a summary of the evidence given by each witness, the Lord Ordinary explains in his opinion of 15 July 2008 that he found the evidence of the four witnesses led on behalf of the pursuers to have been generally credible and reliable. He records inter alia that Gordon Gibb, in particular, gave his evidence in a careful and professional manner, without apparent exaggeration, and that he found him to be a most impressive witness. His evidence was precise and detailed, and was consistent with the documentary evidence and also with much of the other evidence led on behalf of the pursuers. It was he who dealt primarily with the clients. John Thomson was employed by his practice for about 9 months, between May 2005 and early 2006. He dealt with the details of the construction and reported to Mr Gibb, who had much greater professional experience. The Lord Ordinary also found Michael Burrows had been clear and open in his evidence and had a detailed recollection of events. By contrast, he did not find the evidence for the defenders to be satisfactory. He found none of the four witnesses led for the defenders to have been entirely credible and reliable. For reasons which he explains he did not feel able to place any reliance on the evidence of John Thomson or of Peter Imrie. He explains that he found that the first defender gave her evidence in an evasive and reluctant manner and was unconvincing. The second defender was not an impressive witness either. Thus where there was a conflict of evidence between the evidence for the pursuers and that for the defenders, he had little hesitation in preferring the evidence on behalf of the pursuers.
[6] Having considered the evidence the Lord Ordinary was entirely satisfied that there was no contract between the pursuers and KWF. He considered the possibility that there was no consensus as to the parties, and thus no contract, but decided that on the whole evidence he was satisfied that there was a contract between the pursuers and the defenders. As a result he rejected the defenders' attack on the adjudicator's decision as ultra vires for want of jurisdiction. Having rejected certain other arguments advanced in criticism of the adjudicator's decision, he then proceeded, on 22 July 2008 to grant decree for payment of the sum found due by the adjudicator, plus interest, being £117,350.50 together with £17,977.52 in respect of the adjudicator's fees.
[7] The defenders have reclaimed against this interlocutor. They seek to argue (as more fully set out below) that Lord Ordinary erred in relation to his finding that there was a contract between the pursuers and the defenders. It has to be said at the outset that it extremely unfortunate that so much time has already been spent in relation to the enforcement of the adjudicator's award; an award of a type designed to provide a speedy and practical provisional remedy to parties in respect of disputes arising in the course of the progress of the works. Moreover there is, it appears to this court, some air of unreality about the dispute. It is accepted on behalf of the defenders that the contract for which they contend would also have been subject to adjudication, and that, if the same dispute had been referred to adjudication under that contract and the adjudicator had found against the company on the merits, payment would have to have been made (whatever might ultimately be decided as to the rights and liabilities of the parties under the contract). It is not obvious that there is any reason for thinking that in such an adjudication the adjudicator would have found any differently on the merits of the dispute. Be that as it may, there is no dispute but that the defenders are entitled to take the point on jurisdiction which they have.
The Factual Background
[8] To give a proper context for the submissions made on behalf of the defenders it would, we think, be helpful to set out broadly the salient facts which the Lord Ordinary found to have been established.
[9] Mr Gibb was instructed by the defenders as their architect in relation to the project, and was the contract administrator. He was clear that the works were for the defenders as individuals. The application for building warrant was made on 1 March 2005 by Mr and Mrs Forrest (ie. the defenders) and was granted on 14 July 2005. On 11 August 2005 Peter Imrie invited contractors to submit tenders for a proposed new-build house for Mr and Mrs Forrest. By letter dated 5 September 2005 the pursuers returned completed tender documents in the sum of £833,000. The covering letter indicated that the proposed house was for Mr and Mrs Forrest. On 4 October 2005 Peter Imrie wrote to the pursuers inviting them to submit a fresh tender. This was for "proposed new-build house at 17 Fairyknowe Gardens, Bothwell for Mr and Mrs Forrest". By letter dated 2 November 2005 the pursuers submitted a revised tender in respect of works for the client "Mr and Mrs Forrest" in the sum of £521,791.03. On 30 November 2005 the pursuers attended a meeting with the defenders and others. As recorded in the minutes the list of those present included John and Jane Forrest as "clients". There was no mention of KWF in the minutes or at the meeting. By letter dated 2 December 2005 the pursuers wrote to the defenders' architect offering a saving to the clients of £8,000, making a revised tender sum of £513,791.03.
[10] It was Mr Gibb's evidence that he discussed this with Mr and Mrs Forrest and they decided to accept the offer. According to him neither of...
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