Liberty Mercian Ltd v Cuddy Civil Engineering Ltd (1st Defendant) Cuddy Demolition and Dismantling Ltd (2nd Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ramsey |
| Judgment Date | 03 September 2013 |
| Neutral Citation | [2013] EWHC 2688 (TCC) |
| Docket Number | Case No: HT-12-55 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 03 September 2013 |
and
and
[2013] EWHC 2688 (TCC)
The Hon Mr Justice Ramsey
Case No: HT-12-55
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Simon Lofthouse QC and Marc Lixenberg (instructed by Morgan LaRoche) for the Claimant
Simon Hargreaves QC and Richard Coplin (instructed by Hugh James) for the Defendants
Introduction
In these proceedings the claimant ("Liberty Mercian") seeks declaratory relief, specific performance, rectification and/or damages in a dispute arising from a development project at Bath House, Cardigan. The project involved the construction of a new retail plateau for future construction of a supermarket.
Liberty Mercian entered into an amended NEC3 Form of Contract ("the Contract") for those works. It seeks to obtain an outstanding parent company guarantee, bond and warranties from the Contractor under the Contract. There is a dispute as to when the Contract was entered into and also whether the Contract was entered into by the second defendant ("CDDL") a company carrying on business as a construction and civil engineering contractor or by the first defendant ("CCEL") a company which at all material times has been dormant. I shall refer to the relevant party as the Contractor and to CCEL and CDDL jointly as the Defendants.
Liberty Mercian seeks a declaration that the Contract was entered into by CDDL and that CDDL remained the contracting party. It also seeks a declaration that the Contractor is contractually obliged to deliver a parent company guarantee from CDDL in the event that the Contract is found to be with CCEL and also a performance bond and warranties.
Background
In late 2008 there was an exchange of emails between Richard Jones, a quantity surveyor employed on behalf of Liberty Mercian and Mr Darren Evans, a director of the "Cuddy Group" concerning the work at Bath House. It is now common ground that the "Cuddy Group" is in fact a reference to the trading name of CDDL.
At the end of October 2009 Mr Jones provided tender documents to Mr Evans for the "Bath House section 38 and retail plateau works". They had been prepared by Waterman Transport and Development Limited ("Waterman") and were based upon the NEC3 Contract Option A: Priced Contract with Activity Schedule, with further options and amendments.
On 23 November 2009 Mr Evans sent Mr Jones and Waterman a completed form of tender for the works which named the Contractor as "Cuddy Group". It was in the sum of £4,287,833.86 and provided as follows:
" We will, when required, enter into a formal Contract Agreement with you in the form included with the tender documentation. Until a formal Contract Agreement is entered into, this tender and your acceptance of it will constitute a binding contract between us."
On 10 December 2009 Mr Jones wrote to Mr Evans and said that the tender sum was still above the budget of £4,000,000 and savings were suggested. There was then a pre-contract meeting on 18 December 2009 and on 9 January 2010 Liberty Mercian sent "Cuddy Group" a letter of intent in the following terms:
" We refer to our pre-contract meeting dated 18th December 2009 and subsequent discussions and confirm that it is our intention to enter into a contract with you to undertake the above works on the basis of Option A of the Engineering and Construction Contract 3rd Edition June 2005 along with the Modifications issued with the tender documents.
The contract will be a lump sum based on drawings and specifications issued with tender documents the value of which will be £4200000.00 as detailed in the priced Activity Schedule submitted with your tender.
The date for commencement of works will be 5th February 2010. The date for completion will be 17th November 2010."
Although the letter of intent provided for it to be signed in acceptance of those terms it does not appear that in fact it was signed. CDDL subsequently commenced work on site.
In early February 2010 there are documents on the file of Mr Stephen Mundy of Morgan LaRoche Limited, solicitors acting on behalf of Liberty Mercian which show that he or his secretary accessed two websites. First there are two copies of a Companies House website search in relation to CCEL and, secondly, a print-out from the Cuddy Group website. In his evidence Mr Mundy says he cannot recollect the circumstances in which those documents came to be produced but assumes that with the assistance of his secretary he was looking for the company trading under the name of Cuddy Group.
On 9 February 2010 Mr Mundy wrote to Mr Philip Baker of Lawrence Graham LLP, solicitors acting for Sainsbury's who were to operate the supermarket on the site, regarding the warranty to be entered into between the Contractor, Liberty Mercian and Sainsbury's. He enclosed a copy of a draft warranty which named the Contractor as "Cuddy Group" and said " I believe the Contractor will be [CCEL] — not Cuddy Group." When Mr Baker returned the warranty on 22 February 2010 he had amended the name of the contractor in manuscript to CCEL.
On 1 April 2010 Mr Mundy sent to Mr Lee Henning at the Cuddy Group the deed of warranty from the Contractor to Liberty Mercian and Sainsbury's which named CCEL as the Contractor. It was subsequently executed as a deed and dated 20 December 2010. It stated that the Developer, Liberty Mercian, " has entered into a contract ("the Contract") dated 6 July 2010 with the Contractor to carry out and complete the Development upon the terms and conditions therein mentioned".
On 30 April 2010 an invoice in the sum of £365,990.30 plus VAT was sent by CDDL to Liberty Mercian and this was followed by a further invoice sent on 4 May 2010 in the sum of £385,894.30 plus VAT. Those invoices were sent by Mr Aled Davies of Cuddy Group to Mr Jones on 11 May 2010 saying " please find attached Cuddy Demolition Invoice 7418 and 7419 in regard of the first two payments on Bath House works at Cardigan." Waterman issued certificates 1 and 2 in the name of Cuddy Group for the sums set out in those invoices.
Draft contract documents were prepared and on a date between 5 and 12 May 2010 those documents, based on an amended NEC3 Form of Contract, were signed by Mr Evans as Director " on behalf of (Contractor) Cuddy Group".
On 11 May 2010 Mr Ian Crabtree of Liberty Mercian wrote to Mr Mundy enclosing " all documentation duly signed as requested." He noted that the Contractor had omitted to initial certain pages. On 19 May 2010 Mr Mundy then sent to Mr Baker a " Certified copy of the NEC3 Engineering Contract" and asked Mr Baker to acknowledge receipt.
On 24 May 2010 Mr Baker responded by email to say he had been through the various documents enclosed with the letter of 19 May 2010 and had some comments. He noted that the NEC Contract had not yet been dated and stated " The contractor is listed as Cuddy Group. It should be [CCEL]."
On 26 May 2010 Mr Jones sent Mr Evans an email enclosing a copy of Mr Baker's email. He asked Mr Evans to action this by return. In relation to the form of agreement he said that it was " to be signed as a deed on the 2 nd page by two Directors of [CCEL]. I have inserted date as 26 th May 2010."
On 5 July 2010 Mr Evans sent Mr Jones copies of amended pages of the Contract which included a page signed by Mr Evans as director and Mr Mike Cuddy as director or company secretary. On the following day, 6 July 2010, Mr Jones sent the relevant pages to Mr Crabtree and Mr Chris Towers and they returned them later that day signed on behalf of the employer by Mr Towers as director and Mr Crabtree as director or company secretary. The Contract was dated 6 July 2010.
Subsequently, Mr Evans sent Mr Jones a copy of pages of the Contract being the form of agreement and the definition of the Contractor where the name "Cuddy Group" had been deleted and CCEL inserted with initials from both parties.
On 18 August 2010 Mr Aled Davies had sent Mr Jones CIS and bank account details for CDDL on Cuddy Group letterhead. It referred at the bottom to CDDL and its company registration details. All invoices in relation to the Contract up until invoice 8790 dated 1 November 2011 were in the name of CDDL and all correspondence in relation to the Contract was sent by CDDL until Mr Evans sent a letter on 29 November 2011 in the name of CCEL. All payments were made to the CDDL bank account.
Problems arose on the project in the form of defects in the earthworks operation for the retail plateau embankment which are not relevant to the issues in these proceedings and by letter dated 7 December 2011 addressed to Cuddy Group the Project Manager stated as follows:
" We hereby give notice pursuant to clause 91.2 of the contract that you have defaulted by substantially failing to comply with your obligations to correct the said Defects and to provide the Works regularly and diligently in that regard using your best endeavours to avoid and reduce delays."
The Project Manager gave Cuddy Group 24 hours to confirm that they intended to comply with their obligations and immediately carry out all corrective works.
Following without prejudice discussions, on 5 January 2012 Liberty Mercian sent a letter to Cuddy Group with a copy to the Project Manager which referred to the Contract with CCEL (t/a Cuddy Group) and notified "Cuddy" and the Project Manager of its intention to terminate the Contract because " Cuddy has not put right the default notified by Waterman (in its letter dated 7 December 2011) within five working days of being so notified."
On 7 January 2012 the Project Manager issued its Termination...
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