Rolf v De Guerin

JurisdictionEngland & Wales
JudgeLord Justice Rix,Judge,Lord Justice Elias,Lord Justice Tomlinson
Judgment Date09 February 2011
Neutral Citation[2011] EWCA Civ 78
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: B2/2010/0426
Date09 February 2011

[2011] EWCA Civ 78

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CENTRAL LONDON COUNTY COURT

His Honour Judge Cowell

Before: Lord Justice Rix

Lord Justice Elias

and

Lord Justice Tomlinson

Case No: B2/2010/0426

8QT70449

Between
Rolf
Appellant
and
De Guerin
Respondent

Mr W Pringle (instructed by Bennett Welch Solicitors) for the Appellant

Mr J De Guerin appeared in person

Hearing date: Friday 22 nd October 2010

Lord Justice Rix

Lord Justice Rix :

1

This is an appeal solely about costs. It is also a sad case about lost opportunities for mediation. It demonstrates, in a particular class of dispute, how wasteful and destructive litigation can be.

2

The case concerned a small building contract between a homeowner and a builder. The judge, HHJ Cowell, heard four days of evidence in the Central London County Court. He referred to "this very distressing dispute".

3

The claimant, here the appellant, is Mrs Jacqueline Rolf. The defendant, here the respondent, is Mr John De Guerin, referred to by the judge as Mr Guerin and I shall do the same. Mrs Rolf wanted a garage and a loft built at her home in London SE19. In about June 2007 she contracted with Mr Guerin to build the garage for £34,000 and the loft for £18,000. At trial Mr Guerin's first defence was that the contract(s) had not been made with him, but with his company, Greyfox Project Management Limited. However, he lost on that issue.

4

The terms agreed were for 25% to be paid in advance, and for the balance to be paid over weekly instalments: 10 weeks for the garage and 14 weeks for the loft. There were separate estimates for each, and it may be that there were two rather than one contract, but I will for simplicity refer to "the contract".

5

On 9 June 2007 Mrs Wolf paid Mr Guerin by cheque the sum of £13,000, being 25% of the £52,000 total for the two projects.

6

The building works did not go smoothly, as described in Judge Cowell's judgment. Among the difficulties was the tendency of Mrs Rolf's husband, whose name is Mr Mislati, to interfere. He was at home with the couple's young twins, while she was out at work. Thus the day to day communication between the homeowner and the builders was through Mr Mislati. The judge found that he played an aggressive and interfering role, and that it was essentially this that led to the breakdown of the contract. The judge accepted Mr Guerin's evidence that he had "no further control in practice over the contract and its conduct". "The contract had been taken away from me", he said. This amounted, together with the "final straw" of the cessation of weekly payments, to the repudiation of the contract by Mrs Rolf, which Mr Guerin accepted by walking off site. That occurred in the week beginning 20 August 2007.

7

At that time the garage had been substantially constructed, although it lacked its door and a roof, but the loft had been barely started (only some steps to it had been built). The judge found that the loft work had stopped at an early stage owing to a change of plans, that Mrs Rolf allocated all payments to the garage, and that by 12 July 2007 at latest it had been "perfectly clear that the works to the loft were not to go ahead". It is not clear, however, whether there was a consensual variation of the contract to that effect.

8

Following the final break-down of the contract, Mrs Wolf instructed other builders to finish the garage. She claimed to have spent some £20,000 in completing it, on what the judge described as "good invoice evidence".

9

In all Mrs Rolf had paid Mr Guerin £28,750 in cash before work ceased (and in addition had paid for some supplies), that is to say quite close to the full cost of the garage, were all payments to have been properly allocated to it.

10

Mrs Rolf issued her claim form in the county court on 3 July 2008. In Particulars endorsed on the form itself she said: "We paid £30,000 for only 3 garage walls and 8 stairs to the loft…We have just managed to complete the garage". The amount claimed was £50,000. There were no particulars as to how that sum was made up, but it might have been intended to reflect the amount spent with both Mr Guerin and the substitute builders. The claim form was issued by Mrs Rolf herself, who at that time was not employing solicitors.

11

Mr Guerin likewise filled in his own defence. He said there was no contract with him, only "an estimate provided by Greyfox…There are no payments made to Greyfox." He concluded: "I will make a counterclaim for damages if this does not stop."

12

I think that what happened next was that Mr Guerin made an application to strike out the claim, which was unsuccessful. By its order dated 16 February 2009, the county court ordered Mrs Rolf to provide proper particulars of her claim. This led to Mrs Rolf writing to Mr Guerin, at his solicitors whom he had by then retained, the following letter dated 23 February 2009:

"Following the result of the last hearing in this case, and after taking legal advice, I am prepared to consider an offer of settlement from you/your client. I would like to hear your decision as soon as possible before we start the procedure ordered by the judge at the last hearing, before we employ an expert to provide a full report relating to the claim, and before we employ a solicitor to handle the remainder of the case.

I am prepared to consider a settlement in order to avoid further expense on both sides."

13

That was, if I may say so, a most sensible letter to write. The parties had had a first outing, so to speak, so they must have known broadly what they were disputing about. It plainly made sense for the parties to settle their differences if they could, before the expenses of litigation began to accelerate. So often, parties leave the first attempt at settlement too late, and costs are already getting in the way.

14

On 26 February 2009, Mr Guerin's solicitors replied to say that "Whilst we commend your willingness to settle this matter we are unable to advise our client further in relation to a settlement without sight of your particularised claim setting out the basis of your claim and the loss which you claim to have suffered." Mrs Rolf's claim could perhaps have been explored without excessive formality, however Mr Guerin was of course entitled to know what was being claimed and why.

15

Be that as it may, Mrs Rolf then proceeded to draft her own particulars, by letter dated 16 March 2009, addressed both to the county court and to Mr Guerin's solicitors. But she did so, as she explained in her letter, after taking legal advice and appointing an expert surveyor, who had provided her with a report. In her letter, to which she attached the surveyor's report, she set out her claim as being: (a) the return of £26,652 out of the £28,750 paid to Mr Guerin, allowing only £819 for the stairs to the loft and £1,379 for the garage; plus (b) £20,149 spent to complete the garage as well as a further £53,685.45 to correct defects in Mr Guerin's work: after counting back the £1,379 allowed under (a) and deducting £34,000 as the contract sum, the claim under (b) amounted to £41,213.45; plus (c) a further £24,750.45 (over and above the contract sum of £18,000) to complete the loft. In all this amounted to £92,615.90. Her letter concluded: "Therefore I am considering raising the claim amount from the original amount of £50,000."

16

Thus the demand for formality led to a potential increase in the claim. But it seems that Mrs Rolf had not yet retained solicitors for the litigation, for she wrote again to Mr Guerin's solicitors by her letter dated 6 April 2009, to say that she had now provided them with a fully particularised claim and desired a reply to her offer to discuss settlement within a week, after which "I will proceed with the court action through my solicitor". It may be that there had been a previous reply from Mr Guerin's solicitors, disputing whether Mrs Rolf's particulars were adequate, but there appears to have been no reply, or no material reply, to her latest letter. It may be that Mr Guerin, who was disputing any contract at all, at any rate with himself, was looking out not so much for particulars of the sums claimed, as to a statement of why Mrs Rolf claimed to have a contract with him (as distinct perhaps from a contract with Greyfox).

17

It seems that what happened next was that Mrs Rolf was forced into the hands of lawyers, for on 24 April 2009 "Amended Particulars of Claim" were served by solicitors acting for Mrs Rolf. These particulars alleged two contracts, one for the garage and another for the loft, each with Mr Guerin, and said that the projects had never been completed with skill and care or at all. As particulars of breach, the surveyor's report dated 12 March 2009 was attached and relied on. As particulars of loss and damage, there was now a wholesale revision, reducing the garage claim to £19,685.45 and the loft claim to £24,750.45. These figures were arrived at by ignoring (i) what Mrs Wolf had paid out to Mr Guerin and (ii) what Mrs Rolf had paid to others to finish the garage. As such, these particulars of loss were not very coherent, but the result was to reduce the claim substantially from the potential figures previously advised.

18

A new defence was served by Mr Guerin's solicitors on 5 June 2009. His case was that neither contract had been entered into by him, as distinct from Greyfox. He claimed that both contracts had been terminated by Greyfox's acceptance of Mrs Rolf's repudiation: "by stopping interim payments she committed a fundamental and repudiatory breach". The loss was denied. The...

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