Liberty Homes (Kent) Ltd v Kanagaratnam Rajakanthan
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Jefford DBE |
| Judgment Date | 19 August 2022 |
| Neutral Citation | [2022] EWHC 2201 (TCC) |
| Docket Number | Case No: HT-2021-000498 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 2201 (TCC)
Mrs Justice Jefford DBE
Case No: HT-2021-000498
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Michael Levenstein (instructed by Furley Page LLP) for the Claimant/Respondent
Daniel Churcher (instructed by Thomson Snell & Passmore LLP) for the First, Tenth, Eleventh and Thirteenth Defendants/ Applicants
Hearing date: 19 July 2022
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by e-mail and release to The National archives. The date and time for handdown is deemed to be 10.30am on 19 August 2022.
Introduction
This litigation concerns, in effect, two families who have done business together and socialised together for many years but in about 2020 fell out and become embroiled in multiple disputes. David and Pauline Caulfield operate their business interests through a group of companies all or mostly with Liberty in their name and including the claimant company which is described in the Particulars of Claim as principally a building contractor of domestic buildings. I shall refer to the claimant as “Liberty Homes”. The first defendant, Kanagaratnam Rajakanthan, and the third defendant, Kanagaratnam Rajamogan, are brothers. The further defendants are all related to these two defendants or are companies associated with them or their relatives.
This judgment concerns two applications made on behalf of the first, tenth, eleventh and thirteenth defendants only, although there is a potential impact on other defendants of the outcome of these applications. The tenth, eleventh and thirteenth defendants are all companies of which Mr Ragakanthan is a director and which operate or have operated care homes. In this judgment, when I refer to “the defendants” without any qualification, I am referring to these four defendants who make the applications. I shall refer to the tenth defendant as NJCH, the eleventh defendant as RCTL and the thirteenth defendant as Uniquehelp.
Because of the potential impact of the outcome of the applications on the remaining defendants, prior to the hearing of this application, the court granted extensions of time to the remaining defendants for the filing of their defences to 3 weeks after the hearing of the application to strike out the claimant's Particulars of Claim. At the conclusion of the oral hearing on 19 July 2022 I made it clear that the hearing would not be concluded until I had delivered judgment so that, until then, time did not start to run for the purpose of the filing of defences; alternatively, and if necessary, I further extended time for the filing of defences to 21 days after the handing down of judgment. That is, of course, subject to such further directions as will be made in consequence of this judgment.
The applications
The defendants make two applications:
(i) The first is to strike out the claimants' Particulars of Claim, or portions thereof, and/or for summary judgment on certain claims. The draft Order provided with the application identifies those claims as (i) all claims against Mr Ragakanthan which allege that he was guarantor for one or more of the other defendants; (ii) all claims against the defendants in unjust enrichment; (iii) the claim described as “Assorted Care Home Works and Services”; and (iv) the global claim in the sum of £2,588,813 plus VAT, alternatively £2,627,019 plus VAT. The last of these, whether or not properly described as a global claim, captures the claim described as “All Claims” in the Particulars of Claim. “All Claims” itself encompasses all the separate claims made.
(ii) The second application is for security for costs. The application is expressly for security by way of payment into court.
The discrete claims made are referred to in the Particulars of Claim – and in the order in which they appear in Part 3 (Factual Background) as Four Oaks, Consultancy Claim, Rent Claim, 129 Foxley Lane and 129A Foxley Lane, Loan Claim, 14 Arden Grove, and Assorted Care Home Works and Services. I deal with the nature of these claims below.
The story so far
The demise of the amicable working relationship between the claimant and the defendants is set out in the judgment of O'Farrell J in Nicholas James Care Homes Ltd. v Liberty Homes (Kent) Ltd. [2022] EWHC 1203 (TCC) and is not repeated here. This formed the background to an adjudication commenced by Liberty Homes against NJCH.
The claimant's case, which is set out in the Particulars of Claim by way of background information only was that, from 2017, it had carried out substantial building works for NJCH at a care home known as Beacon Hill Lodge. Liberty Homes' last two payment applications (nos. 23 and 24) had not been paid. The claimant commenced the adjudication in October 2020. The adjudicator gave his decision on 2 December 2020 ordering NJCH to pay the full amount of the applications, namely £274,698.04. Although the adjudicator made some findings as to sums paid, he did not decide the value of work done and his decision as to the sum to be paid followed from the absence of payment notices. NJCH initially failed to pay and Liberty Homes commenced enforcement proceedings in this court against NJCH (under case number HT-2021-000001). The proceedings were transferred to the Central London County Court and appear thereafter to have been compromised by NJCH paying the full amount due, together with the costs of the enforcement proceedings, on 25 February 2021.
In order for the adjudication to have proceeded, there must have been a contract between Liberty Homes and NJCH. The Notice to Refer which formed an Annex to the Particulars of Claim in the enforcement proceedings alleged that there was a contract made on 2 March 2017 which incorporated a JCT Standard Form of Design and Build Contract (2011). What this makes clear is that despite the formerly amicable relationship between the claimant and the defendants, some of them at least have entered into formal contracts and certainly contracts that are capable of being set out with some degree of particularity. In his skeleton argument, Mr Levenstein for the claimant, also makes the point that NJCH has never denied the existence of that contract or impugned its validity.
In summary, and following the adjudication enforcement proceedings, it appears that that contract was terminated; that the claimant's position is that it was NJCH that unlawfully terminated the contract; and that there may be further claims arising out of the termination. The claimant has also indicated further claims in respect of professional services on this project. None of this, however, forms part of the present claim.
On 14 July 2021, Liberty Homes' solicitors sent to all of the defendants, with the exception of Uniquehelp, a letter of claim. The letters of claim were all in identical terms. The letter advanced all of the claims which are the subject matter of these proceedings, in very similar terms to those of the Particulars of Claim, together with claims in respect of Beacon Hill Lodge for professional services and loss of profit. At paragraph 24, it was asserted that the primary legal basis for Liberty Homes' claims was breach of contract; rights to payment were also asserted; and there were said to be alternative bases of claim in restitution.
In the context of the application to strike out, two aspects of this letter stand out.
Firstly, paragraph 25 said this:
“For the avoidance of doubt, none of the defendants will be able to raise any arguable defence on the basis of any lack of contractual formality. In particular, the terms of each agreement were sufficiently certain, including with respect to the scope of works and/or services to be provided”.
That was a clear indication that the claimant had a positive case as to each agreement alleged to have been entered into with each defendant and a case which encompassed the terms of such contracts, in particular in relation to the scope of works and services to be provided and, it might reasonably be inferred, actually provided. Leaving aside the Beacon Hill Lodge claims, the letter, at paragraph 10, said that it annexed a final account valuation for Four Oaks; a Consultancy Services Valuation for Regal Care Trading; a Valuation for 129 Foxley Lane; a Valuation for 129A Foxley Lane; a Valuation for 14 Arden Grove; and a “Schedule of Care Home related Works, Valuation and Supporting Invoices”. These valuations were said to have been made by a quantity surveyor, Mr Harrison, and the provision of these documents would seem to have been consistent with the claimant's position that there was a clear scope of works to be undertaken, and in fact undertaken, on each project, which enabled such valuations to be made.
Secondly, and somewhat inconsistently with the statement that none of the defendants would have any defence based on informality, at paragraph 48 the solicitors said this:
“We accept there is some ambiguity with respect to the exact liabilities of certain of the defendants. For the most part, such ambiguity has arisen due to the defendants' own conduct, including (a) acting as each other's agents (whether authorised to do so or not); (b) assuming each other's liabilities (whether authorised to do so or not); and (c) failure to keep and provide adequate contractual...
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