Malcolm Charles Contracts Ltd v Mr Charles Julian Crispin and Another
| Jurisdiction | England & Wales |
| Judge | The Hon Mrs Justice Carr DBE,Mrs Justice Carr |
| Judgment Date | 25 November 2014 |
| Neutral Citation | [2014] EWHC 3898 (TCC) |
| Docket Number | Case No: HT-14-241 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 25 November 2014 |
[2014] EWHC 3898 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Building
London EC4A 1NL
The Hon Mrs Justice Carr DBE
Case No: HT-14-241
Ms Serena Cheng (instructed by Wheelers LLP) for the Claimant
Mr Martin Hirst (instructed by Dodd Lewis Solicitors) for the Defendants
Hearing dates: 14th and 17th November 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is a Part 7 Claim brought to enforce the decision of an Adjudicator dated 23rd October 2013 ("the Decision") ("the Adjudicator"). The Claimant ("MCC") is a building contractor based in Kent. Mr Charles Crispin, also known as Sam Crispin ("Mr Crispin"), and his wife, Mrs Zhang Ya Yu, also known as Marcy Crispin ("Mrs Crispin"), (together "the Defendants"), are the residential occupiers of a property at 28 Lyndhurst Drive, Sevenoaks, Kent TN13 2 HQ ("the property"). By the Decision the Adjudicator determined that MCC was entitled to damages of £104,852.88 representing costs thrown away and lost profit as a result of the Defendants' cancellation of a building contract between the Defendants and MCC for works to the property.
If it is established the Adjudicator had jurisdiction to make the Decision, it is common ground that the Decision is enforceable. The Defendants challenge the Adjudicator's jurisdiction on the basis that no contract was ever formed between the parties, such that no adjudication agreement ever came into being between them and the Adjudicator had no jurisdiction to reach the Decision.
By s. 108(1) of the Housing Grants, Construction and Regeneration Act 1996 ("the Act") a party to a construction contract has the right to refer any dispute arising under the contract to adjudication. However, pursuant to s. 106(1) of the Act, the adjudication provisions in the Act do not apply " to a construction contract with a residential occupier".
It is therefore common ground that MCC must establish not only that it had a contract with the Defendants but that that contract incorporated an adjudication agreement. On the facts here, and as set out below, MCC contends that its contract with the Defendants was on the terms of the JCT Standard Form of Building Contract for a Home Owner/Occupier Who has appointed a Consultant to Oversee the Work, 2005 Edition, ("the JCT HOO"), which terms included an adjudication agreement.
As pleaded by MCC, the issue before the Court is whether or not the parties entered into such contract:
a) at a meeting on 9th August 2011; or
b) upon the Defendants' indication, by their provision of the keys to the property on 7 th September 2011, that they intended to be bound by the terms previously discussed, agreed and offered by MCC.
The following witnesses gave oral evidence for MCC:
a) Malcolm Scopes, the principal and sole shareholder of MCC;
b) Richard Elliott, the Defendants' appointed architect on the project;
c) Anthony Wright, MCC's foreman on the project.
Both Defendants gave oral evidence, as did Mr Michael Crispin, Mr Crispin's father ("Mr Crispin senior").
Summary of the relevant facts
Mr and Mrs Crispin married in about 2004. Mrs Crispin is a Chinese national, and they lived exclusively in China until recently. Mr Crispin has a diploma in surveying and is a chartered surveyor (MRICS). He is a past chairman of the British Chamber of Commerce in Shanghai. He has experience of negotiating property sale and purchase transactions. He is currently a director of PricewaterhouseCoopers.
Mr and Mrs Crispin have two children. They purchased the property in 2009 in preparation for their relocation to the UK which ultimately took place in about August 2013.
In 2010 they retained Open Architecture and Surveying Limited ("Open Architecture") to prepare plans for extensions and modifications to the property, to obtain planning permission, to prepare tender documents and to obtain tenders for the proposed works. It was the intention to appoint Richard Elliott ("Mr Elliott"), a senior architect with Open Architecture, as the consultant to administer the project, which in due course they duly did. The project involved the proposed construction of a two storey rear extension, single storey extensions on both sides, an attic conversion, a patio and driveway to the property. By the end of 2010 the Defendants had obtained planning permission.
On 24 th December 2010 Mr Elliott on behalf of the Defendants invited MCC to quote for the proposed works of alteration and addition. He had had previous positive experience of working with MCC.
On 27 th January 2011 MCC submitted its tender for the works in the sum of £518,739.25. The tender was the lowest of the three received by some substantial margin but it nevertheless exceeded the Defendants' budget. There thus followed a period of negotiation during which Mr Elliott and MCC carried out a value engineering process reducing the scope of the works so as to reduce their cost. More specifically,:
a) by email 15 th February 2011 Mr Elliott requested a PDF copy of the tender price and advised that the Defendants were keen to value engineer the project. Mr Crispin agreed in cross-examination that this was the obvious next step;
b) on 10 th March 2011 MCC provided Mr Elliott with an Excel version of its tender price;
c) a meeting took place on 7 th April 2011 between MCC and Mr Elliott to review costs reductions and value engineering proposals;
d) Mr Elliott made resulting proposals to the Defendants by email later that day, copying MCC in. Mr Elliott stated:
" Overall we feel we can alter the scheme to allow the build cost to be about £350,000….I feel that this could be the way forward. Prior to the contractor and myself developing the proposal could you confirm the alterations are acceptable";
e) on 18 th April 2011 the Defendants responded to the proposals, copying MCC in, and requested further costing information, raising detailed questions and observations;
f) on 16 th May 2011 Mr Elliott issued MCC with a sketch showing various savings and a revised schedule which MCC was asked to price;
g) on 7 th June 2011 MCC forwarded comments on the proposals to Mr Elliott;
h) on 24 th June 2011 the results of the cost reduction/value engineering exercise were submitted to the Defendants and a date arranged for a site visit. The Defendants wanted further savings. On 27 th June 2011 Mr Elliott advised that he would seek further savings in consultation with MCC. Mr Elliott expressly asked Mr Crispin for the " go ahead" on 27 th June 2011. If given, he would revise the drawings. Mr Crispin responded with the instruction: " Yes, please go ahead.";
i) on 14 th July 2011 a meeting took place attended by Mr Elliott, the Defendants and MCC. The purpose was to finalise changes to the project to enable Mr Elliott to revise his drawings so that MCC could price the revised scheme;
j) on 19 th July 2011 Mr Elliott issued to the Defendants revised GA drawings and the revised section ("the revised scheme"), stating that: " Hopefully the drawings indicate all the design changes as discussed". MCC was invited to price the revised scheme;
k) on 21 st July 2011 Mr Elliott instructed MCC to work to the revised scheme; they needed a baseline to work to. He emailed Mr Crispin, copied to Mr Scopes, as follows:
" Malcolm is looking at the costs, I have told him to use the current scheme. I know you may want the utility larger, but we need a baseline to work to."
On 27 th July 2011 MCC duly submitted an updated price based on the revised scheme to Mr Elliott who in turn sent it on to the Defendants on 28 th July 2011.
On or about 29 th July 2011 the Defendants met with Mr Elliott in the absence of MCC. On 1 st August 2011 Mr Elliott provided revised drawings to the Defendants and MCC, against which MCC produced a revised priced schedule on 3 rd August 2011 in the sum of £369,861. Mr Elliott forwarded the revised bid to the Defendants on the same day highlighting the price changes. MCC's revisions addressed all of the queries raised by Mr Crispin on 18 th April 2011.
On the same day Mr Elliott sent a blank copy of the proposed contract to the Defendants for their consideration. The proposed contract was the JCT HOO form described by Mr Elliott to Mr Crispin as " the proposed contract as agreed". Mr Crispin's evidence was that he read the document when he received it. He would have understood it when he did so.
A pre-contract meeting was arranged. It took place at 10am on 9 th August 2011 in the essentially empty kitchen of the property. Mr Scopes of MCC attended, as did Mr Elliott and both Defendants.
It is MCC's case that at this meeting the parties agreed a contract on the basis of the JCT HOO at a price of £369,861 with a commencement date of 9 th September 2011 and a contract period of 33 weeks. It is MCC's case that at the meeting Mr Elliott took the Defendants through the documents and drawings that would form the contract and that the parties reached agreement on the scope, price, time and payment mechanism for the project, all as recorded in the minutes of the meeting prepared by Mr Elliott ("the Minutes"). Mr Crispin agrees that certain matters identified in the Minutes were discussed, but both Defendants contend that nothing at all was agreed on this occasion.
The Minutes are very full and detailed. They include the following entries:
"PRE CONTRACT MINUTES No. 1
OPEN Architecture and Surveying Ltd
...
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