GPP Big Field LLP v Solar EPC Solutions SL (formerly known as Prosolia Siglio XXI)
| Jurisdiction | England & Wales |
| Judge | Mr Salter |
| Judgment Date | 07 November 2018 |
| Neutral Citation | [2018] EWHC 2866 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No LM-2016-000101 |
| Date | 07 November 2018 |
[2018] EWHC 2866 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (QBD)
Royal Courts of Justice. Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Richard Salter QC
Sitting as a Deputy Judge of the High Court
Claim No LM-2016-000101
Mr Matthew Parker and Ms Pia Dutton (instructed by NewLawsLegal) appeared for the Claimants
Mr Richard Walford (instructed by James Burkett Solicitor) appeared for the Defendant
Hearing dates: 11, 12, 13, 14, 18, 25, 26 June 2018
Judgment Approved
Contents
| (1) Introduction | 5 |
| (2) Background | 6 |
| (2.1) The parties | 6 |
| (2.2) The people involved | 7 |
| (2.3) The witnesses | 7 |
| (2.4) The tariffs | 9 |
| (2.5) The insolvency of the Contractor | 11 |
| (3) The Hamptworth contract | 11 |
| (3.1) The claims, the defences and the counterclaim | 11 |
| (3.2) The claim under clause 21.5 | 14 |
| (3.2.1) The relevant provisions of the Hamptworth contract | 14 |
| (3.2.2) Is clause 21.5 an unenforceable penalty? | 24 |
| (3.2.3) Was any part of the relevant delay caused by force majeure? | 28 |
| (3.2.4) Conclusion | 39 |
| (3.3) Actual loss | 39 |
| (3.4) Guarantee defences | 41 |
| (3.4.1) The terms of the guarantee | 41 |
| (3.4.2) Is clause 6.2 a guarantee or indemnity? | 42 |
| (3.4.3) Does the doctrine of “unusual features” and/or the rule in Holme v Brunskill apply to contracts of indemnity | 44 |
| (3.4.4) Unusual features | 52 |
| (3.4.5) Discharge by variation | 55 |
| (3.5) Counterclaim | 58 |
| (4) The Beaford Brook contract | 61 |
| (4.1) The claims, the defences and the counterclaim | 61 |
| (4.2) The claim under clause 21.5 | 62 |
| (4.2.1) Is clause 21.5 an unenforceable penalty? | 62 |
| (4.2.2) Was the project delivered on time? | 62 |
| (4.2.3) Has the second claimant waived its right to claim Delay Damages? | 64 |
| (4.2.4) Conclusion | 67 |
| (4.3) Actual Loss | 67 |
| (4.4) SDLT | 69 |
| (4.4) Counterclaim | 69 |
| (5) The Rookery Farm contract | 70 |
| (5.1) The claims, the defences and the counterclaim | 70 |
| (5.2) The claim under clause 21.5 | 71 |
| (5.2.1) Is clause 21.5 an unenforceable penalty? | 71 |
| (5.2.2) Has the second claimant waived its right to claim Delay Damages? | 71 |
| (5.2.3) Conclusion | 72 |
| (5.3) Actual loss | 72 |
| (5.4) The claim in relation to the ROCs | 73 |
| (5.4.1) The ROCs obligation | 73 |
| (5.4.2) The claim | 73 |
| (5.4.3) Clause 28.1 | 75 |
| (5.4.4) The overlap with clause 21.5 | 81 |
| (5.4.5) Conclusion | 83 |
| (5.5) SDLT and cost to complete | 83 |
| (5.6) Counterclaim | 83 |
| (6) The Bidwell contract | 84 |
| (6.1) The claims, the defences and the counterclaim | 84 |
| (6.2) The claim under clause 21.5 | 86 |
| (6.2.1) Is clause 21.5 an unenforceable penalty? | 86 |
| (6.2.2) The correct period | 86 |
| (6.2.3) Conclusion | 91 |
| (6.3) Actual loss | 91 |
| (6.4) The claim in relation to the ROCs | 91 |
| (6.5) SDLT | 93 |
| (6.6) Costs to complete | 93 |
| (6.6.1) The claim and the defences | 93 |
| (6.6.2) The second claimant's loss results from its own breach of contract | 96 |
| (6.6.3) Was an agreement reached in August 2014? | 98 |
| (6.6.4) Were lower prices available | 98 |
| (6.6.5) Power inverters (Item 1) | 99 |
| (6.6.6) Fencing (Item 2) and the security system (Item 6) | 100 |
| (6.6.7) Switchgear (Item 3) | 103 |
| (6.6.8) Planting (Item 7) | 104 |
| (6.6.9) Rent (Item 8) | 105 |
| (6.6.10) Project management | 106 |
| (6.6.11) Conclusions | 106 |
| (6.7) Counterclaim | 107 |
| (7) The Lower Marsh Farm contract | 109 |
| (7.1) The contract | 109 |
| (7.2) The relevant dates | 109 |
| (7.3) The claim and set off | 110 |
| (7.4) Decisions | 111 |
| (7.3.1) The amount of the counterclaim | 111 |
| (7.3.2) Delay Damages | 111 |
| (7.3.2) Responsibility for the Contractor's failure to complete the work | 111 |
| (7.3.3) Security Guards and CCTV | 112 |
| (7.3.4) Planting | 113 |
| (7.3.5) Electrical works etc | 113 |
| (7.3.6) Conclusion as to set off | 113 |
| (8) Overall conclusions | 114 |
| (8.1) The 5 EPC contracts | 114 |
| (8.1.1) Hamptworth | 114 |
| (8.1.2) Beaford Brook | 114 |
| (8.1.3) Rookery Farm | 114 |
| (8.1.4) Bidwell | 114 |
| (8.1.5) Lower Marsh Farm | 115 |
| (8.2) Solar's liability | 115 |
| (8.3) The final accounting | 115 |
| (8.3.1) The first claimant | 115 |
| (8.3.2) The second claimant | 115 |
| (8.4) Judgment | 116 |
Mr Salter QC:
(1) Introduction
The disputes which have given rise to this action concern five Engineering, Procurement and Construction (“EPC”) contracts relating to solar power generation plants in the United Kingdom. Those EPC contracts were made between one or other of the claimants (“GPP”) as employer, and Prosolia UK Ltd (“the Contractor”) as contractor. The Contractor is now insolvent. The defendant in this action (“Solar”) was the parent company of the Contractor, and is sued as guarantor and/or indemnifier of the Contractor's obligations under four of the EPC contracts. The claim, in broad terms, is for damages (both liquidated and unliquidated) for late and/or non-completion of the works required by those four EPC contracts. Solar, in turn, counterclaims against GPP (under an assignment from the administrator of the Contractor) for the balance of the sums which it asserts remain due under all five of the EPC contracts.
The five EPC contracts with which this action is concerned are as follows:
2.1 The “Hamptworth” contract dated 14 May 2012 between the first claimant and the Contractor, for the construction of a solar plant at Big Field, Hamptworth Estate, Salisbury SP5 2DS for a total price of £7,849,161.
2.2 The “Beaford Brook” contract dated 7 February 2013 (as amended by a deed of variation dated 2 October 2013) between the second claimant and the Contractor, for the construction of a solar plant at Upcott Barton, Beaford, Winkleigh, Devon for a total price of £5,925,607.49.
2.3 The “Rookery Farm” contract dated 1 March 2013 (as amended by deeds of variation dated December 2013 and 11 March 2014) between the second claimant and the Contractor, for the construction of a solar plant at Kimbolton Road, Stow Longa, Huntingdon PE28 0TR for a total price of £6,644,954.
2.4 The “Lower Marsh Farm” contract dated 9 August 2013 between the second claimant and the Contractor, for the construction of a solar plant at Kingston St Mary, Somerset for a total price of £6,258,364.
2.5 The “Bidwell” contract dated 11 October 2013 between the second claimant and the Contractor, for the construction of a solar plant at South Downs, Dartington, Totnes, Devon for a total price of £5,492,180.72.
GPP was represented at trial by Mr Matthew Parker and Ms Pia Dutton. Solar was represented by Mr Richard Walford. I am grateful to all of the advocates, and to the teams behind them, for the clarity and economy with which they have presented their cases.
(2) Background
Although the claims, defences, and counterclaims in relation to these five EPC contracts involve a number of common legal issues, each has its own particular facts, and the terms of each contract, although often materially the same, are not always identical in all respects. It is therefore necessary for me to take each contract in turn, and to consider the claims, defences, and counterclaims in relation to each of them separately, referring back where a decision that I have reached in relation to one contract also decides a similar issue in relation to another. Before I do that, however, it may be helpful for me to set out some of the common background to these disputes.
(2.1) The parties
The claimants are special purpose limited liability partnerships incorporated in England. The first claimant is owned by two Danish kommanditselskab (usually abbreviated as “K/S”), Green Power Partners K/S (“GPP K/S”) and Solar Rooftops III K/S. (The K/S is the Danish equivalent of the English limited liability partnership.) The second claimant is owned by GPP II UK K/S and Green Power Partners II K/S. These Danish entities are all investment vehicles for funds managed by Mr Lars Christian Gaarn-Larsen.
Solar (formerly known as Prosolia Siglo XXI Sociedad Limitada Unipersonal) is a Spanish company which is the parent company of a group specialising in the construction of solar power plants. From about 2009, Solar's group had collaborated with the funds managed by Mr Gaarn-Larsen on solar projects in Spain and elsewhere in continental Europe. In about 2011, seeing an opportunity created by the favourable renewable energy tariffs in the United Kingdom, Solar and Mr Gaarn-Larsen decided to work together on a number of projects in the United Kingdom.
For that purpose, the Contractor was incorporated on 20 July 2011. The first director of the Contractor was Mr Francisco Garcia Hernandez (known as “Paco”, but to whom I shall refer as “Mr Garcia”). It was Mr Garcia, in particular, who was responsible for seeking out and identifying the opportunity to construct a solar power plant at a particular site. In doing so he was acting on behalf of the Contractor and on behalf of another company associated with Solar, Comprasolar UK Limited (“Comprasolar”), of which he was also the only director. In each case, Mr Garcia (or someone working under him) was the person who initially secured a lease or other rights over the land and any necessary planning permissions, before the projects were sold to Mr Gaarn-Larsen's funds. Indeed, in relation to the Hamptworth project, the first claimant itself was originally set up, owned and run by the Contractor and Comprasolar. The Contractor and Comprasolar then sold the first claimant to Mr Gaarn-Larsen's funds on 14 May 2012, at the same time as the first claimant, the Contractor and...
To continue reading
Request your trial
-
Triple Point Technology, Inc. v PTT Public Company Ltd
...second contractor achieves completion: the Hall case [2010] EWHC 586 (TCC); the Crestdream case (2013) HCCT 32/2013; the GPP case [2018] EWHC 2866 (Comm).” 29 Sir Rupert Jackson rejected the argument that the principle in Glanzstoff could be confined to cases where the contract was termin......
-
Strategic Advantage SPC (for and on behalf of HSG Rooftops SP) v High Street Rooftop Holdings Ltd
...agreement. Such non-waiver terms are enforceable and effective: see GPP Big Field LLP, GPP Langstone LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm) per Mr Richard Salter QC at [203.3]. It is not therefore open to the Company to argue that any failure or delay by the Applicant to take......
-
Brown-Forman Beverages Europe, Ltd v Bacardi UK Ltd
...by Mr Richard Salter QC sitting as a deputy judge of the High Court in GPP Big Field LLP and another v Solar EPC Solutions SL [2018] EWHC 2866 (Comm) at paragraph 34 I now turn to the critical question, which is whether on its proper construction paragraph 5 applies in the circumstances of......
-
Triple Point Technology, Inc. v PTT Public Company Ltd
...and, very recently, by Mr Richard Salter QC sitting as a deputy High Court judge in GPP Big Field LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm). 101 Bluewater Energy Services BV v Mercon Steel Structures BV [2014] EWHC 2132 (TCC) is a complex case, which does not lend itself to pit......
-
Liquidated Damages And Unfinished Works
...[2010] EWHC 586 (TCC); Crestdream Ltd v Potter Interior Design Ltd (2013) HCCT 32/2013; GPP Big Field llp v Solar EPC Solutions SL [2018] EWHC 2866 (Comm). Sir Rupert stated that the textbooks treat the second category as the orthodox. He expressed his doubts about the cases in the third ca......
-
The Supreme Court Favours "Orthodox Approach" To Liquidated Damages Clauses: Triple Point Technology, Inc v PTT Public Company Ltd ' Court Of Appeal Overturned
...second contractor achieves completion: the Hall case [2010] EWHC 586 (TCC); the Crestdream case (2013) HCCT 32/2013; the GPP case [2018] EWHC 2866 (Comm)." The Supreme Court having rejected the application of Glanzstoff and making clear that it was not authority for any legal principle (in ......
-
Projects & Construction Law Update - Janary 2019
...judgment here. Penalty doctrine considered in solar EPC case (1) GPP BIG FIELD LLP (2) GPP LANGSTONE LLP v SOLAR EPC SOLUTIONS SL [2018] EWHC 2866 (Comm) In this case, two of the main issues in dispute were the applicability of the force majeure provisions and the enforceability of the liqu......
-
Liquidated Damages On Work Never Completed
...reward the contractor for its own default, a stance adopted by the Commercial Court in GPP Big Field LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm). In the present case, the clause specifically referred to liquidated damages accruing "up to the date PTT accepts such work". The Court o......
-
Security for performance
...[2016] EWhC 166 (TCC) at [23], per Edwards- Stuart J), nor in respect of an indemnity ( GPP Big Field LLP v Solar EPC Solutions SL [2018] EWhC 2866 (Comm) at [131]–[147], per DhCJ richard Salter QC). 94 Compare Mercers v New Hampshire Insurance Co Ltd (1992) 60 BLr 26 at 50, where Scott LJ ......
-
Damages
...Ltd v China National Chartering Co Ltd [2017] UKSC 35 at [98], per Lord Sumption JSC; GPP Big Field LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm) at [349], per DHCJ Richard Salter QC. See also Collings Construction Co Pty Ltd v ACCC (1998) 143 FLR 308 at 328, per Cole JA [NSWCA]; Sta......
-
Price and payment
...chan J; Glen Water Ltd v Northern Ireland Water Ltd [2017] niQB 20 at [64], per Keegan J; GPP Big Field LLP v Solar EPC Solutions SL [2018] eWHc 2866 (comm) at [102]–[105], per dHcJ richard Salter Qc; Maeda Kensetsu Kogyo Kabushiki Kaisha v Bauer Hong Kong [2019] HKcFi 916 at [7]–[33] per m......
-
Table of cases
...I.2.57, I.2.139 GPN Ltd v O2 (UK) Ltd [2004] EWHC 2494 (TCC) I.2.127, I.2.130, I.5.22 GPP Big Field LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm) II.6.327, II.11.163, II.12.26, II.13.86, II.13.134, II.13.146, II.13.150, II.13.179 GPS Marine Contractors Ltd v Ringway Infrastructure Se......