Case No. HT-11-503

77.I find that what ‘went wrong’ was this: the claim for the cost of the reinstatement fit-out works was wholly exaggerated because, not only was the workscope not plain and the sums to be paid (and actually paid) to the contractors unclear, but also numerous claims were made for works which were nothing to do with The Oak, or the remedial works in the basement which were the defendants’ responsibility. Against the background of those difficulties with the claim as presented, I turn to the dispute between the QS experts. 3.3 The Dispute Between The Experts 78.The essence of the dispute between Mr Thomas, the expert quantity surveyor for the defendants and Mr Woodall, the expert quantify surveyor for Brit Inns, was simple. Wherever he had a concern about the sum claimed for a particular element of the work, Mr Thomas sought to obtain further information as to what work was actually done, and then attempted a re-measurement of that element of the work in order to arrive at a reasonable figure. It was a bottom-up approach necessitated, he said, by the inadequacy of the underlying material. 79.Mr Woodall, on the other hand, adopted a completely different approach. He did not undertake any valuation exercise himself. Instead, as he explained to me during his cross-examination, he accepted all the invoices at face value, save for those which, in his discussions with Mr Thomas, he had discounted. He said that his approach to the invoices was “If I couldn’t see a good reason to not accept them then I accepted them.” 80.For the reasons set out below, I am in no doubt that, on the evidence, Mr Thomas’ approach is to be preferred. 81.First, Mr Thomas’ approach involved a degree of quantity surveying expertise. It involved an independent valuation of the work done. Mr Woodall’s approach, which accepted at face value the evidence put forward by Brit Inns, and thus the reliability of the invoices, involved no quantity surveying at all. In one sense, because it relied on a judgment about the integrity or reliability of each invoice, it might be said to be an (entirely innocent) attempt to usurp the court’s own function. Moreover, Mr Woodall’s acceptance was itself based on a flawed assumption; he said that he understood that the invoices had been scrutinised/verified before they were paid. As I have found above, there was no such system of scrutiny or verification of the invoices.82.Secondly, in Mr Woodall’s own words, “Mr Thomas’ method of doing it is a recognised method of valuing a building job.” There can be no doubt, therefore, that Mr Thomas has used a proper methodology. Mr Woodall has not used any methodology as such.83.Thirdly, not only did Mr Woodall accept Mr Thomas’ methodology, but he also confirmed that he did not have a criticism of the actual manner in which Mr Thomas had undertaken each of his calculations. He said in terms: “I don’t have a criticism of the execution of that method.” 84.Fourthly, Mr Woodall accepted that it was necessary to undertake an assessment of the value of the works and that finding out what the works should have cost was one way of doing that. That is what Mr Thomas has done but which he has not. Mr Woodall accepted that measurement of the work, at least in some instances, could have been undertaken very easily. He said that he had not undertaken that exercise because he concluded that it was not needed. This chimed with his later evidence that, although he contemplated undertaking the measurement exercise he did not do so because, as he put it, ‘the invoices carried equal weight to a measurement and rates’.85.That approach, of course, completely misses the point that, in the present case, the invoices, because of their many inadequacies, were not of equal weight to the recognised quantity surveying methodology using measurement and rates. For the reasons which I have given above, the invoices were wholly unreliable. Indeed, Mr Woodall accepted that the invoices were unreliable and said that the absence of proper detail concerned him. He seemed to contradict himself when, later in his evidence, he agreed that, in order to ascertain reasonableness, he could have undertaken an exercise it in a way similar to that done by Mr Thomas. As he put it, “If the tools to enable me to do that had been provided then I would have been able to do it much better, much easier for certain.” “The tools” to which he referred were proper records of the work done and sums paid. On his own case, he did not have those proper records and yet he was still willing to rely on the inadequate records (the invoices) so as to avoid doing a re-measurement. I do not accept that as a reasonable approach. 86.Fifthly, Mr Woodall accepted that circumstances would arise when he would have undertaken a measurement. He accepted that there would ‘come a time’ when he would have to do something more than merely accept the invoices at face value. He seemed to suggest that this might depend on the amount of the claim. He agreed that if the claim had been for £1 million, he would have looked at it “in closer detail”. It seems to me wrong in principle to say that, whether or not it was reasonable to re-measure, in a case where the records were so poor, should depend on the degree of exaggeration of the amount of the claim. 87.Sixthly, there was Mr Woodall’s complete failure to have regard to the cost of the original fit-out works. As noted above, Mr Thomas identified the cost of the original fit-out works in order to confirm his view that the sums now claimed were exaggerated. Mr Woodall agreed that, as a loss adjuster, he would have looked at the original costs and made a comparison and he did not clearly explain why he had not done so as the expert. Indeed he did not even ask for the original fit-out documents and did not know what the figures were. This was despite the fact that, as he himself conceded, he could have done a similar exercise to Mr Thomas which could at least have formed a starting point for comparison purposes.88.On that point I should add that, although there were a number of suggestions from Brit Inns that the fit-out works were generally more difficult second time around, there was no credible evidence to support that assertion. None of the contractors who were there in 2006 and again in 2007, and who were therefore perfectly placed to have a view on that, gave any evidence at all. From the documentary evidence and the photographs, save for the need to accommodate the Delta Drain, which was not a particularly unusual construction feature, I can see no reason why the reinstatement fit-out works were more difficult following the structural works in 2007. I note the agreed evidence of Mr Garry as to the work done prior to the reinstatement fit-out works, but I reject the notion that, in some way, those works were particularly difficult or onerous, whether compared to the original fit-out works or at all.89.Finally on the dispute between the experts, I have concluded that Mr Thomas’ approach is to be preferred because, in his closing submissions, Mr Plewman properly accepted Mr Thomas’ valuation for many of the disputed items in the material damage claim. It was a hallmark of the realism with which Mr Plewman presented his final submissions that, in relation to many of the disputed items, he accepted that, on the evidence, Mr Thomas had arrived at a figure in a way which was likely to be more accurate and more reliable than the figure produced by the relevant invoices. 90.For all these reasons, therefore, it seems to me that Mr Thomas’ approach is to be preferred to that of Mr Woodall. Mr Thomas had undertaken a proper independent valuation of the works because of the problems with the information which had been provided. Mr Woodall, although keenly aware of those problems, had accepted the invoices at face value, provided only that no good reason had been identified to reject the particular invoice. That approach reversed the burden of proof to an unacceptable degree, and made it incumbent upon the defendants (and therefore Mr Thomas) to rootle back through the invoices to find all the ones that were exaggerated or irrelevant. The fact that Mr Thomas has performed this task with great energy and perseverance should not disguise the fact that he should not have been obliged to undertake it in the first place.91.Notwithstanding these conclusions, I do accept Mr Plewman’s secondary submission that, whatever view I came to on the proper general approach, each item in the material damage claim has to be looked at individually. Thus, if there are heads of claim where, despite the court’s reservations, the particular invoices produce a figure which, on their face, appears closer to a reasonable valuation than that produced by Mr Thomas, then that ought to form the basis of the assessment. 3.4 Conclusions As To Principle In This Case 92.The fact that the works have been carried out and sums paid out by the insurer to Brit Inns in consequence is not decisive of the issue of reasonable cost, but it is of some evidential weight. However, the sheer scale and range of the problems with the claim as submitted to the insurer mean that it is generally quite impossible to accept the invoices, without more, to support the claim. That view is compounded by the concerns I have as to the credibility of at least some of the evidence supporting Brit Inns’ claim in these proceedings.93.In general terms, the retrospective valuations of Mr Thomas are to be preferred. On the facts of this case, a retrospective valuation of what was done, and the application of standard rates and prices to that work, will form the best way of arriving at a reasonable figure for the disputed element of work. But, depending on the facts, the invoiced sum may, on analysis, constitute the appropriate figure for assessment purposes. With that approach in mind, I then turn to the individual elements of the material damage claim. 4. THE SUBROGATED CLAIMS FOR MATERIAL DAMAGE/ASSESSMENT 4.1 Overview 94.The claim can be broken down as follows:95.The item marked with the * reflects the experts’ joint statement. However there was a live issue between the parties throughout the trial as to whether some £28,000 odd of that amount should be allowed back in to the Brit Inns’ claim. That is dealt with in