Hall and Another v Heiden
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson |
| Judgment Date | 23 March 2010 |
| Neutral Citation | [2010] EWHC 586 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-09302 |
| Date | 23 March 2010 |
[2010] EWHC 586 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Before: The Honourable Mr Justice Coulson
Case No: HT-09302
Mr G Woods (instructed by Streathers Solicitors LLP) for the Claimants
The Defendant was neither present nor represented
Hearing Dates: 15 th– 16 th March 2010
Mr Justice Coulson:
I. INTRODUCTION
Commonly, building disputes fall into a number of well-defined categories: a claim by the contractor for unpaid sums due on his Final Account; a claim by the employer for defective or incomplete work; and claims by either or both sides in respect of delay. Sometimes there will be claims by either or both sides if the contract came to an end prematurely. This case ticks every box: each one of these categories of dispute is present in these proceedings. Unhappily, despite the multiplicity of issues, the sums in issue are modest by the standards of the TCC. There is a claim by the employer (the claimants) for just over £100,000 and a counter-claim by the defendant contractor for just over £50,000.
A further complicating factor has been the absence of the defendant from this trial. Although the defendant was represented by solicitors and counsel at every stage of the proceedings, up to and beyond the Pre-Trial Review, he apparently dismissed his legal team a week or so before the trial. Moreover, although he endeavoured to postpone or even avoid the trial altogether, by obtaining an interim order under section 252 of the Insolvency Act 1986 from Swindon County Court on the last working day before the trial began, I granted permission for the trial to continue pursuant to section 252(2)(b) of the Act. My judgment on that issue is at [2010] EWHC 537 (TCC).
Notwithstanding that order, the defendant still refused to take any part in the trial and it continued in his absence. I heard oral evidence from each of the two claimants, from Mr Wojciech Lenkiewicz, (the contractor who carried out the remedial and the completion works), and Stephen Fletcher, the claimants’ architect on the project. As to expert evidence, I was provided with a written report and other written comments by the claimants’ expert architect, Mr Frank Cleveland, who had permission from HHJ Toulmin CMG QC to give his evidence in written form, but not to give oral evidence. I heard oral evidence from the claimants’ quantity surveyor expert, Mr Andrew Ohl.
Of course, the defendant was not present and therefore called no evidence. However, I have had regard to his witness statement of 18.12.09 (the only factual evidence on which the defendant chose to rely); the written evidence of the defendant's expert architect, Mr Daniel Evans; and the written evidence of the defendant's quantity surveying expert, Mr Derek Woods.
I propose to deal with the issues in the following way. In Section 2 below, I deal with the contract between the parties. In Section 3, I set out a brief chronology of the principal events. Thereafter, in Section 4, I address the alleged defects, and in Section 5 the allegations of incomplete work. In Section 6, I deal with the issues relating to culpable delay. Then, taking all those strands together, I deal in Section 7 with the determination of the defendant's employment under the contract and whether or not it was justified. In Sections 8–11 below I then go on to consider the claimed heads of loss. There is a short summary of my views in Section 12 below. I ought to express my gratitude to Mr Woods for his considerable assistance in dealing with these issues.
THE CONTRACT
The contract was dated 8 th May 2007. The works were described as “internal refurbishment and remodelling at Flat 1, 25 Stanley Crescent, London, W11 2NA.” The contract sum was £143,054. The architect was named as Steven Fletcher.
The contract commencement date was 21 st May 2007. The contract completion date was 22 nd September 2007. Liquidated damages were expressed to be in the sum of £700 per week.
The contract incorporated the JCT Minor Works Building Contract (With Contractor's Design). It is unnecessary to set out all these provisions. For present purposes, the important clauses were as follows:
Section 2 Carrying out the Works.
a) Clause 2.1 set out the defendant's obligations in respect of the carrying out and completion of the works including, at clause 2.1.1, the obligation to complete the design using reasonable skill, care and diligence, and, at clause 2.2, the obligation to use materials and standards of workmanship to the reasonable satisfaction of the architect and/or to a standard appropriate to the contract documents.
b) Clause 2.8, dealing with extensions of time, provided:
“If it becomes apparent that the Works will not be completed by the Date for Completion stated in the Contract Particulars (or any later date fixed in accordance with provisions of this clause 2.8) for reasons beyond the control of the Contractor, including compliance with any instruction of the Architect/Contract Administrator under this Contract whose issue is not due to a default of the Contractor, then the Contractor shall thereupon in writing so notify the Architect/Contractor Administrator who shall make, in writing, such extension of time for completion as may be reasonable. Reasons within the control of the Contractor include any default of the Contractor or others employed or engaged by or under him for or in connection with the Works and of any supplier of goods or materials for the Works.”
c) Clause 2.9 set out the provisions for liquidated damages. Clause 2.9.1 made plain that the relevant period during which such damages would accrue was between the contractual completion date (as extended) and the date of practical completion. Clause 2.9.2 made plain that the claimants were entitled to deduct liquidated damages from sums otherwise due to the defendant or to recover those damages from the defendant “as a debt”.
Section 3 Control of the Works
d) Clause 3.4.1 permitted the architect to issue written instructions with which the defendant was obliged to comply forthwith. All instructions were to be confirmed in writing.
e) Clause 3.6 permitted the architect, without invalidating the contract, to issue instructions to vary the works.
Section 4 Payment
f) Clause 4.3 dealt with progress payments and provided as follows:
“The Architect/Contract Administrator shall, at intervals of four weeks, calculated from the Date for Commencement of the Works, certify progress payments of the percentage stated in the Contract Particulars of the total value of:
.1 The work properly executed, including any amounts either ascertained or agreed under clauses 3.6 and 3.7; and
.2 The materials and goods which have been reasonably and properly brought on site for the purpose of the Works and which are adequately protected against weather and other casualties.
less the total amounts due to the Contractor in certificates in progress payments previously issued. The certificate shall state to what the progress payment relates and the basis on which the amount of the progress payment has been calculated. The final date for payment by the Employer of the amount so certified shall be fourteen days from the date of issue from that certificate. The provision of clause 4.6 shall apply to any certificate issued under this clause 4.3.”
g) Clause 4.7 permitted the contractor to suspend works in certain circumstances of non-payment. It was in these terms:
“Without affecting any other rights and remedies of the Contractor, if the Employer, subject to any notice issued pursuant to clause 4.6.2, fails to pay the Contractor in full by the final date as required by these Conditions and such failure continues for seven days after the Contractor has given to the Employer, with a copy to the Architect/Contractor Administrator, written notice of his intention to suspend performance of his obligations under this Contract and the ground or grounds on which it is intended to suspend performance, the Contractor may then suspend such performance until payment in full occurs.”
Section 6 Termination
h) Clause 6.4 permitted the claimants to terminate the defendant's employment if the defendant was in default. It was in these terms:
“.1 if, before practical completion of the Works, the Contractor:
.1. without reasonable cause wholly or substantially suspends the carrying out of the Works or the design of the Contractor's Designed Portion; or
.2 fails to proceed regularly or diligently with the Works or the design of the Contractor's Designed Portion; or
.3 fails to comply with clause 3.9,
the Architect/Contract Administrator may give to the Contractor a notice specifying the default or defaults (the ‘specified default or defaults’)
.2 If the Contractor continues a specified default for 7 days from receipt of the notice under clause 6.4.1, the Employer may on, or within 10 days from, expiry of that 7 day period by a further notice to the Contractor terminate the Contractor's employment under this Contract”
BRIEF CHRONOLOGY
The works were slow to get underway and by August 2007, the claimants were becoming concerned that the defendant was not going to complete by the contractual completion date. There were very few men on site. These concerns were exacerbated when the defendant took an unplanned holiday for a fortnight between 3 rd and 20 th August 2008. On his return from holiday, the defendant informed them he was 5 weeks behind. He did not at this stage seek to argue that the delays were anyone's responsibility other than his own.
As noted above, the contract envisaged payment by the claimants on the issue of progress payments certificates by the architect. Those...
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