HT-2023-000006 - [2024] EWHC 1510 (TCC)

After earlier iterations of the pleading, with which parts of my previous judgments are concerned, A & V’s claims are pleaded in the Scott Schedule which is at Section 8.1 of Volume 1 of the Trial Bundle.

The Measured Works claims are set out at pages 1/50 to 1/52 under item nos. 1.0 to 47.0.

In paragraph 48 of his written Opening Submissions, Mr Frampton helpfully summarised the differences between the Parties:

48.1

7 items (1.0, 2.0, 3.0, 32.0, 33.0, 34.0 and 37.0) account for £63,000 (c.84%) of the £73,256.66 difference between the parties. Save for item 37, these relate to the Podium works.

48.2

2 further items (4.0 and 35.0) should be considered alongside item 3.0 and 34.0 respectively.

48.3

For 16 items relating to the installation of heating, domestic water and waste on the different floors to Tower 2 (15.0 to 30.0) A&V had not completed the final fix of the domestic and waste pipes to the kitchens (as explained at paragraph 37 of Defence …. For some of these items, there were other elements of the works (including fitting radiators or the sink in the cleaner’s/janitor’s cupboard which had not been completed. These account for £7,942.40 of the difference between the parties.

48.4

For 6 items (12.0, 13.0, 14.0, 44.0, 45.0 and 46.0) relating to the installation in the top 2 floors of Towers 1 and 3 (and follow on testing fir all floors), JBH does not have evidence that the physical works were incomplete. However, A&V had not completed the quality assurance paperwork or sign off, meaning that it had to be checked by others. These items account for £2,472.80 of the difference between the parties.

48.5

There are 2 other miscellaneous items (31.0, 47.0).

A & V’s workforce left site on 19 March 2021, in circumstances discussed in detail above. Mr Paduraru’s evidence, which I have accepted, was that he last attended at site on 22 March 2021.

On Mr Paduraru’s evidence it was clear by the time he left site on the morning of 22^nd March 2021 that the sub-contract had come to an end and the actions of J&BH were consistent with that having been the de facto position (I have analysed the legal position above).

Shortly before the events of 19 March 2021, on 15 March 2021, A & V submitted its Application for Payment 13 which claimed the value of work done up to the end of February 2021. It was the figures for completeness of the Measured Works which found their way into the Scott Schedule and which found the basis for A & V’s claims at pages 50-52 of the Scott Schedule.

In his oral evidence, Mr Paduraru explained that for the purpose of that payment application, he had walked the site and assessed the level of completeness of each part of A & V’s sub-contract works.

This was the same procedure as had been adopted in respect of all previous applications.

What did not happen, as happens on many projects, was a joint exercise in assessing progress on a monthly basis.

On JBH’s part, monthly assessments of completeness were also carried out, which resulted in payments being made on a monthly basis against JBH’s assessments.

Those assessments are set out in the third column on pages 50-52 of the Scott Schedule.

On 22 March 2021, surveys were carried out by Mr Ian Davidson and Mr Julian Smart to assess the level of completeness of the works. Mr Davidson’s evidence in paragraph 17 of his witness statement was as follows:

In March 2021 marked-up drawings were prepared by Mr Seth Brown (the J&BH Quantity Surveyor) and Mr Paul James. These are in the Trial Bundle at pages 5/2208 to 2209.

Mr Davidson said that the photographs which are inserted into the marked-up drawings and which are also helpfully included elsewhere in the Trial Bundle in full size were taken by Mr Smart on the walk around.

When he gave oral evidence, Mr Davidson accepted that the drawings at 5/2208 to 2210 were the drawings of the areas where there were incomplete works. On that basis he accepted that the sub-contract works to Towers 1 to 3 were complete, and also the works to level 0 in both Podiums (although he said that these works were limited in nature. He also accepted that the works to the East Side of Podium 1 were complete.

In respect of the works to level 1 in the West Side of Podium 1, and to both West and East sides of Podium 2 were partially complete, although he said that most areas of the Podium works were to be completed.

Mr Davidson made it clear in his oral evidence that he had no part in assessing the percentage completeness of any parts of the works. His job was to assist Mr Smart in his walk round. Mr Smart himself does not appear to have carried out the assessments: my impression is that these were carried out by Mr Brown, which would be appropriate in his role and profession of quantity surveyor. However, Mr Brown was not called as a witness, and there is no evidence before me as to the way in which he calculated his assessments.

The same criticism can be made of Mr Paduraru’s assessments (i.e. that there is no evidence as to precisely how he came to his various assessments) but he was at least available to answer questions, and I formed the impression that overall his assessments seemed reasonable, albeit that I had little firm basis upon which to test some of his assessments. I would comment that had Mr Paduraru had access to the IAuditor system on 22 March 2021, then A&V’s position as to the completeness of the Project would have been on the contemporaneous record.

Further, it will be seen below that in many cases J&BH’s assessments in the Scott Schedule of the completeness of parts of the sub-contract works depart significantly from its earlier assessments.

In those circumstances, I generally prefer A & V’s assessments to J&BH’s.

This item relates to the lateral out runs for Level 00 in Podium 1. The description “commercial” is potentially misleading. This item does not concern a particular commercial area. Rather, it refers to all the pipework running laterally from the energy centre to the bottom of each of the risers, so that the services can move up the floors of the Podiums and the Towers. The reference to “commercial” signifies that it does not include the pipework in the rooms themselves.

The scope of works was set out in Appendix 2 of the sub-contract:

While this refers to “levels 1 and 2”, there are only 2 levels in the podiums: ground or street level and an upper level. The Tower floors are above the upper level. The reference to levels 1 and 2 in Appendix 2 is therefore to Levels 00 and 01 respectively in A&V’s quote and the Scott Schedule.

The total sum allowed for “Podium 1 Commercial” works in Appendix 8 was £38,000 (Footnote: ⁶³), split as to £25,000 for level 00 and £13,000 for level 01.

A & V claims that these works were 80% complete, and therefore claims 80% of £25,000, namely £20,000.

J&BH’s present position is that these works were 40% complete, thus allowing £10,000. It is to be noted that in Payment Certificate 11 (measuring the position as at December 2020) J&BH had assessed these works as being 50% complete, accepting A & V’s assessment. Since that date A & V had been working in the Podium areas, right up to the date works stopped.

In paragraph 4.2 of A & V’s written closing submissions, reliance is placed upon the evidence given by Mr Davidson:

In my judgment it was too late in closing submissions to put forward what was in essence an application to amend the Scott Schedule.

However, the evidence referred to casts doubt upon accuracy of the assessment put forward by J&BH (40%) and raises questions as to the basis upon which Mr Brown carried out his exercise.

This evidence also suggests to me that A & V’s assessments may be an underestimate of the amount which should be allowed.

I am prepared to accept J&BH’s case that these works were not complete, but I accept A & V’s case that they were at least 80% complete by 19 March 2021.

I allow the sum claimed by A & V, £20,000.

The issues here are the same as in respect of item 1.0, except here the works were to level 01 and the contract allowance was only £13,000.

Again, A & V claims that the works were 80% complete, thus claiming £10,400.

Again, J&BH puts forward an assessment of 40%, having previously accepted 50% in Payment Certificate 11.

In paragraph 4.3 of A & V’s written Closing Submissions, it submits:

I accept the above submissions as justifying the pleaded valuation in the sum of £10,400.

I do not accept that there should now be a re-assessment of this item on the basis of carrying out an assessment of the cost to complete the works, this being a case of which J&BH should have had notice before the evidence was complete.

I also do not accept the case that the item should be valued at 100% on the basis that J&BH prevented A & V from completing the work. There is a separate claim which I consider below for loss of profit/recovery of overheads as a result of the sub-contract coming to an end, which is the appropriate legal basis for such a claim.

I am prepared to accept J&BH’s case that these works were not complete, but I accept A & V’s case that they were at least 80% complete by 19 March 2021.

I allow the sum claimed by A & V, £10,400.

In respect of both these items A &V claims 80% completeness. The contract sum for item 3.0 is £22,800 and for item 4.0 is £1,000. Accordingly, the amount claimed for 3.0 is £18,240 and for item 4.0 £800.

In respect of item 3.0, J&BH allows 30%, i.e. £6,840 and in respect of item 4.0 J&BH allows nil.

In respect of item 3.0, in Payment Certificate 11 allowed 30% for item 4.0 (the same figure as claimed then by A&V) and nil for item 4.0 (in this instance A&V then agreed with the nil assessment).

I do not accept that A & V did not make any further progress after December 2020, although it is to be noted that in Payment Application 12 A & V did not suggest that there was any increase in level of completeness up to 20 January 2021.

In paragraph 4.4 of its written Closing Submissions, A & V submitted:

As I read Certificate 12, the valuation was for 30%, not 50%, as suggested in paragraph (e) above.

However, I accept the above submissions as justifying the pleaded valuation in the sum of £18,240.

I do not accept that there should now be a re-assessment of this item on the basis of carrying out an assessment of the cost to complete the works, this being a case of which J&BH should have had notice before the evidence was complete.

I also do not accept the case that the item should be valued at 100% on the basis that J&BH prevented A & V from completing the work. There is a separate claim which I consider below for loss of profit/recovery of overheads as a result of the sub-contract coming to an end, which is the appropriate legal basis for such a claim.

I am prepared to accept J&BH’s case that these works were not complete, but I accept A & V’s case that they were at least 80% complete by 19 March 2021.

Item 4.0 is a small item, in respect of which I see no reason to doubt Mr. Paduraru’s assessment.

Accordingly, I accept Mr Paduraru’s assessments in the Scott Schedule, and allow £18,240 for item 3.0 and £800 for item 4.0.

A & V makes no monetary claim against this item.

I agree with J&BH’s suggestion in Mr Frampton’s written Opening Submissions that it is convenient to deal with all the Podium issues before turning to the Towers works.

This is the same work as item 1.0, save that it relates to Podium 2 (instead of Podium 1).

In the Scott Schedule, A & V claims 50% completeness against a contract allowance of £20,000, thus claiming £10,000.

In its written Closing Submissions, A&V points out that in the marked up drawings at TB 3/2208-2213 J&BH does not detail any evidence of outstanding works for this item and/or area. The submission at paragraphs 4.8 (b) and (c) of those submissions was:

In my judgment it was too late in closing submissions to put forward what was in essence an application to amend the Scott Schedule.

However, the evidence referred to casts considerable doubt upon the accuracy of the assessment put forward by J&BH (10%) and raises questions as to the basis upon which Mr Brown carried out his exercise.

This evidence also suggests to me that A & V’s assessments may be an underestimate of the amount which should be allowed.

As mentioned above, J&BH puts forward a figure of 10%, allowing £2,000.

In Payment Certificates 11 and 12 J&BH assessed completeness at 25%.

Given Mr Davidson’s evidence, I have no hesitation in accepting A & V’s case that these works were at least 50% complete by 19 March 2021.

I allow the sum claimed by A & V, £10,000.

This item is the same as item 32.00, save that it relates to Level 01.

A & V claims 80% completeness against a contract allowance of £10,000, thus claiming £8,000.

J&BH puts forward a figure of 10%, allowing £1,000.

In Payment Certificates 11 and 12 J&BH assessed completeness at 25% in both Certificates.

In paragraph 4.9 of its written Closing Submissions, A&V submitted as follows:

I accept the above submissions as justifying the pleaded valuation in the sum of £8,000.

I do not accept the case that the item should be valued at 100% on the basis that J&BH prevented A & V from completing the work. There is a separate claim which I consider below for loss of profit/recovery of overheads as a result of the sub-contract coming to an end, which is the appropriate legal basis for such a claim.

I therefore allow the sum claimed by A & V, £8,000.

These items are the same work scope as items 3.0 and 4.0, save that they relate to Podium 2 rather than Podium 1.

Item 34 claims 70% of a contract allowance of £26,400, namely £18,480. Item 35 claims 70% of £1,000, namely £700.

J&BH has an allowance of 10% for each item, therefore £2,640 and £100.

This contrasts with the valuations in Certificates 11 and 12 (0% for both items in each certificate).

Thus these are instances where, albeit modestly, J&BH’s position is more favourable to A & V than the earlier Certificates.

The difference between the Parties in respect of this Item is particularly marked – hardly any progress on J&BH’s case, moving towards completion on A & V’s case.

A & V’s submissions in respect of these items, as in respect of other items considered above, concentrate on Mr Davidson’s evidence.

In respect of Item 34 A & V submitted in paragraph 4.10:

A & V’s submission in paragraph 4.11 in respect of Item 35 was similar:

In my view, if these works were as incomplete as J&BH contends, that this would have been reflected in the marked-up drawings. Accordingly, A & V’s reliance upon Mr Davidson’s evidence appears to me to be justified.

However, as in respect of the other items considered above, I do not think it appropriate at this stage to allow A & V to put forward an amended case, I do not regard it as appropriate to rely upon a late case as to the cost to complete the works, nor to assess these items on the basis of 100% of the contract allowance for works which were not complete.

In the circumstances I accept the valuations put forward in the Scott Schedule, namely £18,480 for Item 34 and £700 for Item 35.

In the Scott Schedule there is no claim against this item.

In paragraph 4.12 of A & V’s written Closing Submissions submits:

I do not accept this submission: the works were not completed and therefore payment on the basis that they should be treated as having been completed is inappropriate. It is another matter as to whether A & V can recover loss of profits and overhead recovery in respect of this work.

It is convenient to consider these Items together as they raise the same issues.

Items 6.0 to 31.00 relate to Towers 1 and 2 and total £225,280. Items 38.00 to 45.00 relate to Tower 3 and total £74,240.

In Certificate 12, J&BH had accepted that levels 1 to 7 were 100% complete. Levels 8 and 9 were treated as 98% complete with a note saying “Value held for kitchens and snag completion”. There was a separate line item for “Levels 2-9 test” which was also assessed at 98% on the same basis.

In respect of Tower 2, Certificate 12 was recorded as 100% and other items at 98% on the same basis (“Value held for kitchens and snag completion”).

In respect of Tower 3, levels 2 to 7 were recorded in Certificate 12 as being 100% complete, levels 8, 9 and the testing item were recorded as 98% complete on the same basis (“Value held for kitchens and snag completion”).

In the Scott Schedule, J&BH still accepts that levels 2 to 11 of Tower 1 and levels 2 to 7 of Tower 3 were 100% complete.

In respect of Tower 1, J&BH’s position changed in the Scott Schedule as follows: level 8 went from 98% to 95%; level 9 from 98% to 93% and the testing item from 98% to 89%.

In respect of Tower 2, J&BH’s position changed in the Scott Schedule as follows: level 2 went from 100% to 94%; level 3 from 98% to 94%; levels 4, 5, 6, 7 8, 910, 11, 12, 13, 14 level 8 went from 98% to 95%; levels 15, 16, and 17 from 98% to 94% and the testing item from 98% to 84%.

In respect of Tower 3, J&BH’s position changed in the Scott Schedule as follows: level 8 went from 98% to 95%; level 9 from 98% to 93% and the testing item from 98% to 89%.

There is no evidence before me as to how precisely the revised figures were calculated, but three main issues of principle emerged in the course of the trial: firstly that there were some incomplete works in some kitchens; that there were some defective works; and that the QA process remained outstanding.

In respect of the issue as to kitchens, this was explained carefully and fully in paragraphs 125 to 139 of Mr Frampton’s written Opening Submissions. The total deduction sought is £6,783.75.

As to the QA issue, it is common ground that QA needed to be completed in a number of areas.

As to the defective works, these were mentioned in respect of J&BH’s counterclaim for costs to complete as consisting of leaks to pipework, which had to be fixed (see paragraphs 19 and 20 of Mr Ian Davidson’s witness statement (Footnote: ⁶⁴)).

In paragraph 4.7 of A & V’s written Closing Submissions, it is submitted in respect of Towers 1 and 2:

In respect of Tower 3, paragraph 4.14 of A & V’s written closing submissions was to like effect.

As set out above, the total claimed by A & V for all three towers was £299,250 (£225,280 + £74,240).

The amount contended for by J&BH in respect of the kitchens is £6,783.75. That is a little over 2% of the contract allowance for the direct works in the Towers. There is evidence of incomplete works in the kitchens as analysed by Mr Frampton in his written Opening Submissions, and as explored in cross-examination of Mr Paduraru.

In my view there should be a reduction of that sum (£6,783.75) to reflect those outstanding works, but otherwise I accept A & V’s case that the works to the Towers were substantially complete.

As to the alleged leaks, it seems to me that J&BH was correct to treat the costs of dealing with these leaks as being an element of the cost to complete, and I make no reduction for those defects.

As to the QA elements, it seems to me that the costs of Mr Paduraru attending site to carry out QA assessments would have been minimal. Whilst in respect of other items I have declined to award monies upon the basis that A & V would have carried out 100% of the works but for J&BH’s acts of prevention, my reason for not doing so (namely that A & V’s approach does not allow for the costs which would have been incurred in completing the works) does not apply in respect of Mr Paduraru’s time, given that he was a full-time employee of A & V whose cost A & V would have incurred in any event. Accordingly, I make no reduction for the outstanding QA exercise: I would add that I had and have no basis upon which to test whether the reductions made by J&BH could be justified – they appeared to be somewhat arbitrary as well as conflicting with the assessments in Certificate 12 and Mr Davidson’s evidence as to overall completion, which must have included elements of QA carried out before 19 March 2021.

Accordingly, I assess the value of the works in the Towers in the sum of £299,250 less £6,783.75, namely £292,466.25.

This is one of two items relating to preliminaries.

The contract allowance was £22,240.

A & V claims 100%.

J&BH suggests 75%.

In paragraph 4.13 of its written Closing Submission, A & V submits:

In Mr Frampton’s written Opening Submissions he submits as follows:

As set out above, I have accepted A & V’s case save as to £6,783.75. Accordingly, on a percentage of completion basis A & V would be entitled to about £20,000 for these preliminaries.

However, I accept A & V’s case that, having been on Site for the full contract period, A & V is entitled to the full amount of £22,240.

The difference between the Parties is minimal.

A & V claims 100% of the contract allowance of £5,560.

J&BH says that the figure should be 98%, namely £5,448.80 giving rise to a difference of £111.20.

As with Item 37.00, I accept A & V’s claim to be entitled to 100%, namely £5,560.

For the above reasons, I value the Measured Works at £6,783.75 less than the sum claimed of £413,940, namely £407,156.25.