England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice
		6th October 2006

JUDGE DAVID WILCOX:

1. The claimant is a building company run by Tony Nearey. He employs his father, Adrian Nearey. The administrative and business operations are the responsibility of Tony Nearey. The practical building side is the responsibility of Adrian Nearey who acts as site foreman. The claimant uses an independent quantity surveyor who advises them, a Mr. Duncan McGee.
2. The defendant company is registered in the British Virgin Islands and is concerned with aeroplane leasing and ship broking. Its alter ego is Mr. Tasco Michael, who is a solicitor, architect, manqué and man of international commerce it would seem.
3. The defendant company purchased a small plot of land in the Wentworth Estate in Surrey. Mr. Michael proposed to replace the existing house with a more impressive dwelling together with a garden pavilion and suitable garaging. The scheme was an ambitious scheme and very complex. There was some design input by a professional architect although no architect was engaged to supervise the works which included the excavation of an extensive basement area and the erection of a large house embellished with architectural features, such as oxeye windows and pilasters crowned with obelisks.
4. There was a requirement for complex mechanical and electrical equipment to serve this ambitious building. The basement contains staff quarters and a swimming pool. The basement excavation and structure was designed and built by a building company whose services were not retained by Mr. Michael for the construction of the remainder of the house structure. It is apparent that the co-ordination of the project remained in the hands of Mr. Michael. It is common ground that the defendant company employed the claimants to undertake some drainage works to build the retaining wall in May and June of 2002. The total cost of this was about £50,000 which was paid by the defendant to the claimant and is not in issue in this case.
5. The claimants thereafter were invited to quote for the rest of the construction at the main house after the first builders went off site. Such specification as existed was contained in the drawings supplied by the defendants to the claimants. There is a dispute as to what drawings were in fact supplied and agreed to form the basis of any agreement concluded by the parties. While such agreement as was concluded was part evidenced in writing, there is no written contract and there is a considerable area of dispute as to what was agreed. It is common ground that the agreement was partially oral and partly written and made at some stage between Sunday, 14^th July and Wednesday, 17^th July 2002.
6. I turn to the contract. On 12^th June 2002 the claimants faxed a quotation to

Mr. Michael quoting prices based on the drawings listed. These comprised elevation drawings and a plan for the basement ground floor, first floor and roof together with engineers' drawings with a steel roof and a sectional of drawing of the roof. The claimants made it clear that they would not undertake any responsibility for liquidated damages. The work was divided into ten categories with item number 11 describing preliminaries. Items 12-15 are not relevant. However, of significance is the provisions of day works setting out rates for labour and equipment and, in the event of winning the contract, payment terms are fortnightly: "We presume there will be some form of intermediate contract such as JCT80".

7. On Sunday 13^th Mr. Michael wrote a letter commenting on the quotation insisting on liquidated damages and excluding roof works on the scope of works. I accept the evidence of Mr. Adrian Nearey that only one page of this reply was transmitted on 14^th July and received by him. On Monday, 15^th July there was a telephone call between Mr. Adrian Nearey and Mr. Michael whereby it was agreed that there would be a meeting on side on 16^th July to finalise the contract. Mr. Michael during that conversation expressed doubt as to the scope of matters covered by the preliminaries, but I am satisfied that

Mr. Nearey agreed to fax to him a breakdown of what was covered and that he did so.

8. The defendant's case is that the contract terms are contained in the letter of 13^th July together with oral terms agreed in a telephone conversation between Mr. Michael and Mr. Nearey on 13^th and 14^th July 2002. Mr. Michael's evidence is that:

"The final agreement was when Tony Nearey and I spoke on that Sunday before works commenced".

He said in his statement:

"The final agreement was that Countrywide would construct the walls including everything relating to those elements, including but not limited to steel, lintels, RSJ's, etc, anything that was on the drawings prepared by Michael George and H. B. Basements (in relation to the layout of the basement and loft level including chimney/crows nest and lift shaft, and floor to the building. I also agreed they would finish and install the main soil and rainwater pipes within the building and connect to the soakaways and the pumping station (to be installed) and the mains drain."

9. It was pleaded that it was agreed that a JCT intermediate IFC contract 84 would be used and such a contract was prepared after the work began but that the claimants refused to sign the document. Mr. Michael supported that contention in his sworn evidence. That was not put to either of the Neareys. Mr. Michael George, the defendant's QS, said that there was no question of the Neareys refusing to sign such a contract on behalf of the claimant company. No prepared JCT contract form has ever been disclosed or produced.
10. I accept Mr. Adrian Nearey's evidence that he would have welcomed a JCT intermediate contract. I do not find Mr. Michael's evidence in relation to the formation of the contract either reliable or impressive. Where it conflicts with the evidence of Mr. Adrian Nearey, I prefer the latter's evidence as being the more reliable and accurate. It was evident during the course of the trial that Mr. Michael sought wherever possible not only to challenge the evidence of Mr. Tony Nearey and Mr. Adrian Nearey, but to impute dishonesty despite no fraud having been pleaded. Thus, time sheets were alleged not to have been merely inaccurate, they are characterised as being manufactured and the Neareys described as people who had no concept of their word being their bond, as did the traders that Mr. Michael did business with.
11. It is a sadness that they were so portrayed. Whilst they did not display the sophistication of Mr. Michael who, with his wife, was his own legal adviser, architect, procurement agent, project manager, nonetheless they impressed me as being straightforward and reliable witnesses who, through their solicitors and in evidence, did not seek to make light of their own acknowledged shortcomings.
12. It is significant that it was Mr. Tony Nearey who drew the attention of

Mr. Michael at an early stage to the defects in the brick piers built by the sub-contractors, Atkins. He measured them and found the top two metres out of plumb and accepted that such workmanship would have to be remedied and by the claimants at their cost. I accept this evidence as to the extent and degree that the piers were out of plumb. His was the only reliable and direct evidence of first hand investigation by a technically experienced person as to this issue.

13. As to the so-called fabricated invoices and timesheets, Mr. Aliker, precisely instructed by Mr. Michael over his shoulder during the hearing, sought to demonstrate falsity on the face of the documents. He was unable to do so and the explanations tendered by the Neareys underline the cross-referenced reliability of the documents and the accuracy of the evidence of the claimants.
14. The contractual terms agreed between the parties were that the claimant would carry out the brickwork and materials, items 1 and 2, in accordance with the quotation of £225,370.05. Item 3, the block and beam floor to the ground and first floor, is quoted in the sum of £28,456. The preliminaries were agreed in the light of the further elucidation by breakdown at £56,051. This is a figure in accordance with the breakdown but less £9,484 representing the deletion of the fork lift.
15. It is accepted and admitted that the contract price agreed was in fact £309,877. The sum of the figures that I have recited earlier comes to £309,877. I am satisfied that additional works, whether by variation or changes, were agreed to be charged in accordance with the day work rates set out for labour and materials in the quotation of 12^th July 2002. For the avoidance of doubt,

I reject the defendant's case that it was an orally agreed term of the contract that Mr. Michael George would be a final arbiter of all works carried out on site by the claimant and that payment would be based upon a certificate issued by him. There would not have been the extensive correspondence between the parties as to the correct amounts due had this ever been the case. The scope of the works were clearly defined and identified in the quotation and the conversations up to and including 16^th July.

16. The garden work was never part of the main contract. It was clear that this additional work was instructed by Mr. Michael and, fortuitously, was commenced and executed at a time when Mr. Michael's co-ordination of the project went seriously awry, and his engineer failed to produce sufficient information to enable the whole of the claimant's workforce to be employed in performing the works comprised in the house contract.
17. Mr. Michael's evidence is that work in the house ceased for a time because the claimants had failed to ensure a ready supply of harmoniously coloured Manchester red bricks, the bricks he had chosen for the exposed brickwork.

I accept that there was an interruption in the supply of suitable bricks. It is not evident whose fault it was. It did not cause any material delay to the project. It was not the reason why Mr. Michael instructed the claimant's to perform the garden works. The interrupted supply was not strictly contemporaneous with garden work.

18. That Mr. Michael's engineers were responsible for significant delay, as testified to by Mr. Tony Nearey and Mr. Adrian Nearey, is clearly corroborated by the contemporaneous documentation. The letter of 16^th August 2002, Grey to Michael, deals with the floor loadings. On 23^rd September the claimants were complaining at the slow progress of work reciting that, even after ten weeks into the job, they did not have the basic information to order the requisite precast concrete flooring, and that a lead time for the order was four to six weeks in any event. They said:

"Our brickwork is now, on the whole, up to the underside of ground floor slab level. As such there is little more that can be economically completed until the floors are available. It will therefore be necessary in the very near future to withdraw from site until such time as future works become available, i.e. after the installation of the ground floor steel work and delivery of the precast concrete floor beams."

19. On 2^nd October 2002 there was a stronger letter from the claimants complaining about the continued delay. The correspondence between

Mr. Richard Grey, the engineer, and the floor fabricators into November demonstrates that difficulties were on-going and had not been resolved.

Mr. Anthony Nearey testified that by February 2003 work on the house had to stop pending receipt of information from the structural engineer. Information was clearly still sought by the claimants in January 2003 when a fax was sent to Mr. Michael and to Mr. George in those terms.

20. I accept the evidence of Mr. Anthony Nearey and Mr. McGee, the independent quantity surveyor, that the material cause for the break in works was the responsibility of the defendants, and this serves to demonstrate Mr. Michael's imperative to redeploy some of the main workforce of the claimants in the garden works. The only issue between the parties is the cost of these works.
21. I turn to the garden works. I look at the claim as pleaded by the claimant. It is in these terms:

"March 2003 the claimant, by Mr. Tony Nearey, agreed orally with Mr. Michael on behalf of the defendant that the claimant would carry out all such work to the walls and terraces of the proposed garden at the site and should be instructed by TM, Mr. Michael and day work basis at the claimant's current rates to be supported by the timesheets.

"18. Between April and September 2003, the claimant carried out garden days works and invoiced the defendant to a total of £124,345, therefore. The defendant has made six payments against the said invoices in the total sum of £24,837 leaving a balance due and payable of £99,507.

"By a letter dated 16^th October 2003 annexed hereto schedule 2, the claimant's solicitors listed the invoices and payments and requested the payment of the said balance. The defendant has not paid the same or any part of it. The defendant is liable to the claimant in the amount of the unpaid balance. Alternatively, the sum claimed is damages for breach to the contract.

22. The defendant's case is pleaded in these terms:

"Works to the garden. Save that it is admitted that the claimant and defendant agreed that the claimant carry out certain works to the garden which were not within the scope of the original contract on a day work basis, paragraph 17 is denied. It is denied that the agreement was that such work would be paid for at the claimant's current rates. It was agreed by the claimant and the defendant materials would be charged at a cost inclusive of the usual trade discounts and payment would be made on production of receipted invoices for those materials. Further labourers were to be covered under the preliminaries list which were charged to the defendant in any event and the bricklayer at the rate claimed at £21 per hour.

"It is denied that the invoices listed at schedule 2 were rendered to the defendant. The defendant has not had sight of the invoices referred to in schedule 2. The defendant paid monies on account to the claimant after being shown timesheets and some purchase forms by the claimant, but the said timesheets were not accepted and were specifically questioned at the time as they were far in excess of any of the reasonable hours that were to be spent and including charges for the labourers who were already covered under the preliminaries. It is denied that the invoices were rendered in accordance with the agreement between the parties."

23. Thus, there are substantial issues of fact as to conduct of the account. It seems to be the pleaded case that the defendant is advancing is a case that the continuing preliminaries labour charge covered the labour in the garden and the materials were to be at cost. I find that the invoices were regularly and timeously submitted to Mr. Michael for the garden works by Mr. Anthony Nearey, either by him personally handing them to Mr. Michael or on some occasions putting them through the letterbox of the house.
24. There was solicitors' correspondence about the invoices commencing with the Ross & Craig letter of 16^th October 2003 setting out the invoices in detail, and payments towards the garden contract works of £24,837 against £124,345. The work was instructed by Mr. Michael. There is no complaint as to its quality. The work was carried out by the claimants who made it clear that any additional work would be the subject of the agreed rates. There is no basis for the defendant's contention that the labour element of the garden works was covered by the preliminaries. Some works still proceeded in the house giving rise to a proper charge for the continuing preliminaries. The claimants have made out their claim for £99,507.34 for the garden works.
25. I turn to the remainder of the claim. The main contract sum claimed is £306,248 reflecting an omission of the hoist and reduction relating to the transport and office items in the preliminaries. There is also an allowance of £2,000 to cover the cost of minor items left unfinished by the time that the claimants left the site. A further deduction of £5,250 is made reflecting the fact that the glass blocks were not used and in recognition of defective internal works. A £10,000 deduction is allowed with a further £15,000 in respect of the defective work to the piers. No defence as such is put forward in relation to these sums.
26. There is a substantial counterclaim. The additional work claimed amounts to £148,549 of which the dispute remains as to £20,030.80 and £30.80. The defendant's case on these items is both confused and unclear. It was not put to the witness. It had to be distilled from correspondence and comments by

Mr. Michael in his long written evidence.

27. I have considered the evidence of Mr. George and of Mr. Duncan McGee as to matters such as rates and scope of works in relation to the contentious items of additional work claimed for. These are collated in valuation number 11, reproduced as schedule 4, 11 to 12 and total £23,002.80. Items of defective work are comprehended in the counterclaim and I will deal with those separately.
28. I make the following specific findings in relation to the outstanding contentious items. As to the matter that was not numbered, it is an item relating to 27 hours priced at £1,080, Mr. Adrian Nearey's unchallenged evidence is that this expense was caused by errors in Mr. Michael George's drawings and not in setting out. I accept that.
29. Items 120, 21 and 43 have a labour element. This was not part of the preliminaries since those relate only to non-productive work. Items 3, 5, 8, 9, 28, 40, 49 and 66 are alleged by the defendants to be within the scope of the main contract works. They clearly were not. I refer to my findings earlier. These items are properly chargeable. Items 2, 4, 10, 11, 17, 24, 32, 33, 34, 35, 36, 47 and 50 according to the defendant should attract a lower rate. I accept the evidence of Mr. McGee that the rates charged were appropriate. The defendant has not demonstrated that a lower rate is warranted or was agreed. Item 14: I accept that it had not been paid as alleged by the defendant. Item 22 is no longer contentious since Mr. George, on behalf of the defendant, in his oral evidence has accepted it. Item 57: it is clearly not part of the work scope since Mr. Langley's drawings were not the basis of the quotation or part of the main works. Items 65 relates to 2.83 weeks of preliminaries and it is clearly payable by the defendant. There is no basis upon which contested items could be resolved in favour of the defendant.
30. I turn to day works. The defendant admits that the claimant was instructed to carry out works outside the scope of the main house contract and accepts some were to be on a day work basis. I am satisfied that the work claimed was performed and instructed and that the day work sheets are accurate. The day works of £36,264.75 particularised in valuation 11 and the schedule to the particulars of claim are wholly recoverable. I find that the claimant has proved its case.
31. Mr. Michael in his oral evidence maintained that he has a complete answer to all of these claims. He asserts that they were compromised in February of 2003. A draft deed of compromise he said was handed to the Neareys on site and they agreed the basis of the compromise. Surprisingly, Mr. Michael George makes no mention of it in either his written or oral evidence.

Mr. Michael makes no reference to it in the 140-odd pages of his written evidence save in these limited terms:

"Countrywide would regularly produce correspondence on matters that affected their purse strings, but would never commit to any agreement or compromise to a solution in writing. I myself drafted a settlement agreement as a way to focus their minds, but they took no action in trying to agree the wording."

It is evidence such as this that assists me to come to the firm conclusions as to reliability and accuracy of the Mr. Michael's evidence.

32. I turn to the counterclaim. The defendants' counterclaim £239,257 for the costs of remedial works and completion works and a further £31,330 for certain other nominated defects and other monies giving a total of £291,773. A Scott Schedule was ordered so that each parties' case as to the counterclaim could be properly particularised. The object of such a pleading was to assist any negotiation, or alternative dispute resolution, assessment of any Part 36 offers and ultimately, to assist the court identify the precise areas of dispute and the parties' case in relation to the issues.
33. The process of refining the issues has been tardily complied with. Sadly, much of the responsibility for this is the defendants. I will make mention of this later. The experts have found themselves unable to conscientiously comply with the case management directions under Part 35(12). I find that Mr. Ruse made a very realistic attempt that was not assisted by Mr. Cowap. The trial dates originally allocated had to be vacated. This case had to be heard during vacation to avoid further culpable delay that would have made the trial unwarrantedly expensive and more difficult.
34. The defendant's principal witness, Mr. Michael, filed a witness statement condescending to very great particularity very late in the day and asserting claims not advanced before. To be fair to him, the provision of detail as to defects, the subject of the counterclaim, may well have been on the advice of his solicitor, his wife who wrote on 21^st February 2005 refusing to provide details saying:

"Our client has no intention whatsoever in narrowing any issues in dispute and will be ready to prepare very substantial counterclaim against your client if and when your client is misguided enough to issue proceedings."

35. On 22^nd June 2005 the court ordered the defendant to serve its Scott Schedule of defects and damage by 7^th September 2005. Appendix 2 of the defence was identified as the defendant's Scott Schedule. Leave was given to the parties to call one expert each. The defendant instructed a Mr. Cowap and the claimant's a Mr. Ruse. I will address the pleaded case set out in the Scott Schedule which remains in its unamended October 2005 state. A Part 18 request was made in March 2006 for further information. The detail provided, such as it was, was not provided by the defendant's expert Mr. Cowap it appears. No application has been made by the defendant to amend the Scott Schedule.
36. I turn to item 1. This relates to the external brickwork and cosmetic appearance:

"The external brickwork is of varying quality and in areas has been left unpointed. There are colour mismatches in the brickwork. We understand that colour variation of bricks did cause much of the structure to be demolished and rebuilt."

It is evident that the Manchester reds purchased from Marshalls were the subject of criticism as to the matching of the various batches produced by difficult firings. I am satisfied the batches produced some colour variations of a minor nature. Where brickwork was unacceptable by reason of colour variation, it was taken down and rebuilt at no extra cost to the defendants. The evidence as to the pointing seems to relate to areas that were to be rendered. Mr. Zokowski gave evidence about this.

37. The second complaint relates to the structural integrity of some of the external brickwork. There is alleged to be a lack of bonding with vertical joints to the bay window corners not joined by angled special bricks but with straight joints. Mr. Cowap's comment it appears is this:

"It is not possible to comment on the future integrity of this work but we have serious concerns knowing that these are areas are to be clad which will add additional loads. It is likely that there will be on-going movement and cracking requiring additional long term maintenance and possibly even more serious issues."

38. The evidence of Mr. Nearey Senior is that the vertical joints to the windows were provided with built-in ties. No other method of tying-in was ever specified. There is no evidence from Mr. Cowap, the defendant's expert, that such a method was not in accordance with reasonable workmanship and accepted practice. Mr. Ruse, on behalf of the claimant, made no criticism of the method used. The bays were in any event to be rendered and there is no cosmetic consequence arising from the method chosen by the claimants, neither is there any sensible basis for Mr. Cowap's conclusion that there is likely to be on-going movement and cracking. I accept Mr. Ruse's evidence that there is no evidence of any potential structural weakness, neither is there any requirement for abnormal on-going maintenance arising out of the method chosen.
39. The next item relates to the internal block work:

"The internal block work was of different types and strength which will lead to future differential movement cracking. Internally the building is designed to be symmetrical. There are obvious errors in the setting and amount of door opening. To remedy this problem the contractors have increased the thickness of walls by the addition of a skin and brickwork. Door widths have likewise been reduced and door opening heights have been reduced with the addition of additional lintels and brickwork over. The resultant work remains unsymmetrical and the stability of small sections of the brickwork must be called into question. This will have a detrimental effect on the finally appearance of the interior and long term cracking and continued repairs will be required."

40. Firstly, I reject the assertion that there is a likelihood of differential movement and cracking. It is normal and commonplace that different types of bricks are incorporated into any building. There is no evidence that the materials used were in any way incompatible with each other. I am satisfied that the internal wall thicknesses around the door openings and the other variations were the result of instructions from the defendant. I reject the allegation that there is the possibility of instability in sections of the brickwork.
41. Item 3:

"The bricks vary in dimension by a considerable amount. This caused one side of the walls to be very uneven and requires a substantial amount of dumming out by the plasterer before a final plaster finish can be applied. The brickwork in the entrance hall is vertically out of line between the ground and first floors. Again, a substantial amount of dumming out will be required by the plasterer. The outer walls of the spiral staircase are likewise inaccurately constructed."

42. I am satisfied that there is some variation in the brick dimensions. I accept the defendant's case this would have some effect upon the requirement for dumming out and the need for extra plaster giving rise to some extra cost.

I will deal with the extent of such variation and the quantum of it later. As to the brickwork, it is accepted that there was a vertical misalignment in the entrance hall between the first and second floors. This was dealt with by the construction of an ornate horizontal feature band. Whilst the defect could have been disguised by dumming out, the solution shown is not unreasonable in a house of this quality. It is appropriate to make an allowance towards this cost.

43. The walls of the spiral staircase had to be constructed using straight blocks. Inevitably, therefore, in order to produce a uniform curved surface generous dumming would have to have been employed in any event. I am satisfied that no extra cost was incurred in relation to this.
44. I am satisfied that there is no reliable evidence as to the alleged damage in the wine cellar or the identity of the perpetrator. The quantum claimed in respect of item 3 is £46,219.74, based upon the evidence of Mr. Thomas of S. & J. Plastering. Mr. Ruse, the expert on behalf of the claimants contends that the quotation for dumming out provided by S. & J. Plastering for the defendant on 4^th July 2003 provided up to five coats in an area of 293 square metres in the hall at £8 per square metre plus materials. Mr. Ruse allowed 2.5 coats for ten square metres giving a sum of £7,325.
45. The contrast between Mr. Thomas' quote in July 2003 and the sum presently claimed is perhaps explained by the fact that S. & J. were responsible for the plastering out of the whole house. The cost of this was some £85,000.

Mr. Thomas' notebook, recording remedial work, he says was compiled by someone else. It covered most but not all of the time that S. J. were on site. The extent of remedial dumming out revealed was 274 square metres.

Mr. Adrian Nearey said that when Mr. Thomas initially visited the house for the purpose of the original quotation he expressed the view to the Mr. Adrian Nearey that he could not see what all the fuss was about.

46. I am driven to the conclusion that the figure of £7,325 admitted by the claimants to represent the cost of the remedial works in this respect is very generous. I do not accept £46,219 represents the cost of the remedial dumming out works consequent upon defective workmanship by the claimant subcontractors. I reject Mr. Thomas' evidence preferring the evidence or the assessment by Mr. Ruse and supported by the initial estimate of Mr. Thomas when he originally gave a quotation and expressed a view to Mr. Nearey.
47. Item 4 relates to the swimming pool. I accept Mr. Adrian Nearey's evidence that he was specifically instructed by Mr. Michael to apply the bitumen paint to the whole pool.
48. Item 5 relates to the external brick piers:

"The external piers were out of plumb and of varying width with the upper section broader than the basis. A structural engineer employed by the clients has advised a hacking off of the projecting brickwork or piecing in new will not be possible because of a huge weight that they now support. The original intention was to render these piers adding a capital and a base. This is no longer feasible given the thickness at which the render would have to be applied. After discussion with STO the solution is to clad the piers with fibre, cement panels and fibreglass."

The only direct evidence as to the degree to which certain piers are out of plumb is that of Mr. Anthony Nearey. He actually plumbed the piers, was dissatisfied with the workmanship of the sub-contractors and raised the issue. Mr. Cowap, the defendant's expert, did no survey or measurement himself. There is no evidence, for instance, that he plumbed it or was present when somebody else did it on his behalf. I accept the evidence of Mr. Nearey as to the extent to which the piers were out of plumb. He is an honest and reliable witness. I accept that in relation to a number of piers the top two metres were out of plumb and could and should have been rebuilt. At an early stage such an opportunity was presented to the defendants. They refused this course in my judgment wholly unreasonably.

49. The claimants acknowledge that the upper two metres in height of the piers was beyond the permitted deviation allowed in British Standard 5628, Part 3, 200. I accept the evidence of Mr. Ruse, that the external piers and the obelisks are an architectural embellishment and provide no specific structural function other than to support their own weight. No reliable evidence has been proffered by the defendants to support the contention that the external piers required specialist cladding rather the rebuilding of the upper two metres and the rendering and cladding originally intended. The defendants claim remedial costs of £71,000-odd. The claimant's expert, Mr. Ruse, assesses the profit cost at £13,000.
50. It is to be noted that the claimants were prepared to offer a discount of £25,000 in order to reflect their admitted responsibility for the piers and the internal works. The proper sum is £13,000 under this head. I accept Mr. Ruse's evidence. I accept the evidence of Mr. Anthony Nearey and Mr. Adrian Nearey that there was a meeting on site when that offer was made to Mr. Michael and not accepted by him. Mr. George was present at that meeting and I accept that his comment was that the offer should have been accepted. It clearly ought to have been. It was an over-generous offer. Mr. George remembers the meeting and remembers an offer being made. He gave oral evidence that he remembered expressing the view that the parties should try to get a settlement. I quote him: "I can't be specific what I did say as to the £15,000 and £10,000 comprising the total offer". He said he expected the parties to reach a conclusion at the final account stage.
51. I reject Mr. Michael's account of discussions relating to the complaints about both the piers and the internal brickwork. I find Mr. Michael's own evidence wholly unreliable. His evidence is not borne out by the contemporaneous documentation. He is so bound up with his grandiose scheme that his present perception of past events is inconsistent and based upon what he would have wished not that which occurred. This was a complex project that evolved as it proceeded, and its oversight and management would have presented challenges to a professional project manager let alone an amateur with other and pressing commercial obligations such as those faced by Mr. Michael. His insistence that the whole of the Neareys' claim was compromised to February 2003 was contradicted by the Neareys and his own adviser, Mr. Michael George, responsible for handling the variations. He wrote on 18^th February 2003:

"Further to my letter of 11^th February 2003 and subsequent discussions between all the parties, I confirm that as no agreement has to date been achieved regarding your claim for additions, I am instructed to issue our interim certificate 007 for payment of the main contract works."

More telling is that a compromise was never pleaded.

52. Similarly, in relation to formation of contract documentation, Mr. Michael was adamant that the scope of works included matters contained in an internal document passed between himself and Mr. George on 5^th July 2002 a wish list that was never in the possession of the claimants and, I am satisfied, the contents of which were never communicated to them.
53. I return to the Scott Schedule, item 6. This relates to floors noted to be out of level. It is stated that on 16^th June 2005 Mr. Cowap, the defendant's expert, made mention of the floors being substantially out of level. A Mr. Zokowski, a building contractor subsequently engaged by the defendant, gave evidence that there was some difficulties with the levels when he came to tile. I accept his evidence so far as it went. His evidence was vague. It lacked particularity. There was no floor plan or accurate sketch showing exactly the extent of the position of the discrepancies in level. He described how a discrepancy in level would affect not only the floor but the stairing that sprung from it. There is no evidence from the defendant to support the assertion that the floors were out of level by 80 millimetres on average representing a fall from east to west of the order of 160 millimetres in total. It appears that there has been no levels survey otherwise doubtless I would have heard of it.
54. The defendant's principal difficulty, however, appears to be that the responsibility for supplying and erecting the steelwork supporting floors was the responsibility of others under a separate contract. The levels are clearly effected by the steel framework. The responsibility for carrying out a post construction survey of the framework was not that of the claimant, although the defendants now assert that it was. Mr. Ruse's comments, that there is no complaint as to the state of the ceilings below or as to how these were dealt with if there were difficulties. They should, if the defendants were right, have shown some corresponding deformity. I am driven to the conclusion that if there were any level differences beyond acceptable tolerances that such would not be the contractual responsibility of the claimants. I reject this claim for £9,250.
55. Item 7 relates to the chimney. It was not constructed as the original estimate it is said. A further particular elucidates, the chimney was not completed by the claimant in breach of contract. Mr. Anthony Nearey gave evidence that the location and specification for the chimney was changed in order to increase the size of the main bedroom and that the chimney was constructed in accordance with the variation. I accept his evidence. I reject the claim for £6,950.
56. Item 8 relates to windows. It is asserted that:

"The windows are set incorrectly within the reveals with the vertical damp-proof course incorrectly positioned, and this will render the damp-proof course effectively useless. This will inevitably cause damp or water ingress and will require the rebuilding of defective openings and associated major costs in scaffolding. Some repairs have been carried out to allow the fitting of the windows within the incorrectly built openings. Additional internal plastering to first floor bathroom to equalise window reveals prior to timing."

57. The claimant, Mr. Anthony Nearey, correctly observed in his evidence that installation of windows did not form part of the agreed works. The Neareys constructed the openings and Mr. Anthony Nearey said they relied upon the measurements given by Mr. George and followed Mr. Michael's specific instructions when they were altered. The statement of a representative of Everest Double Glazing was read in these terms:

"Delivery was to be in a matter of months, but following delays we had to store the windows in a container because of problems with the original builder, H. T. Basements. When I looked at the window openings they were set incorrectly within the reveals. The damp proof course was incorrectly positioned and I advised Mr. Michael that this would cause damp or water ingress. Inner and outer skins of brickwork were not symmetrical which meant that the gap around the windows when they were set plumb level varied. (The reveal depth varied between the top and bottom of the window)"

58. I am satisfied that there were proper concerns at the quality of some of the internal brickwork. This is reflected in the claimant's acknowledgement and offer of discount. I am satisfied that this aspect of the claim is made and in the sum of £2,245. Item 9 complains that ducts were sealed in situ concrete at each floor preventing access to service risers. The contract drawings did not require construction of service risers. I reject this claim.
59. Item 10 relates to the basement floor slab. It asserts: "The concrete floor has been cut to allow omitted pipe work to be chased into the floor. This has severed the reinforcement and damp proof membrane. It was observed that the chases were full of water although the building was otherwise watertight. However, further visits have been advised by Polycrete Limited to ensure that future winter conditions do not cause further problems. Removal and replacement of damaged limestone tiles in the basement following the waterproof injection work, tanking of basement light wells following injection works: Redecorating of basement paintwork damaged during injection works". The claimant claims the cost of remedial works in the sum of £45,408.71.
60. Mr. Anthony Nearey says that there was no pipe work omission. The original foul water disposal was to be to a tank in the garden following maceration and pumping. He says, and I accept, that he was able to demonstrate that connection to the public sewage system was feasible and he so advised. The floor slab was laid by H. B. Builders before the claimant came on site.

Mr. Adrian Nearey said he was specifically instructed by Mr. Michael to cut into the slab to accommodate the drainage services to pass through it to the mains drain. He says, against his advice, the pipes should in fact be laid above the slab because there otherwise would be a risk of cracking. Mr. Nearey said that Mr. Michael was not willing to lose approximately 150 millimetres in the height of the room above and that to retain height there had to be a cut into the slab to accommodate the services. Mr. Michael said there was no discussion with Mr. Adrian Nearey about cutting into the internal slab at all. There is an absolute contrast in evidence. Both cannot be right.

61. I am satisfied that slab was cut into on the express instructions of Mr. Michael for the reason he described when speaking to Mr. Adrian Nearey. I reject

Mr. Michael's evidence when he said he gave no such instruction or had any such discussion. The likelihood is that Mr. Michael, on discovering the extent of the incisions and the manner in which they were made, had second thoughts and reacted by contacting Mr. George and Mr. Grey and later Mr. Koritas who gave evidence before me. Mr. Michael's assertions as to knowledge and experience of construction design and architecture gives a picture of a keen amateur bold enough to preserve design at the cost of practicality and later regretting his uninformed decision by blaming Mr. Nearey. I reject this claim.

62. Mr. Michael made no reference in his evidence to Mr. Adrian Nearey's assertion that there was material non-compliance with planning consent in that the house was built 1.2 metres too high and a metre wider than permitted and two metres nearer to the road than the planning consents permitted. It appears from the evidence of Mr. Nearey that an enforcement notice requiring partial demolition was served, and following a public enquiry the demolition requirement was rescinded subject to certain conditions. The relevance of these matters is limited. It is twofold. It may reveal something of Mr. Michael's judgment when it comes to major building issues, but more importantly as to questions of damages if alteration to or demolition of the built works arises the value of any claimed remedial works affected could be substantial.
63. Item 11 relates to damage to balustrading on the pavilion. It is alleged that the cost of remedying the damage to the concrete balusters was £2,000. I accept the claimant's evidence effected, but the finishing had not completed. I set the damage under this head due to the defendants at £1,000.
64. Item 12 relates to the necessity of having additional scaffolding in order to carry out remedial works. The claimant persuasively contends that scaffolding was necessary for the original or the originally intended rendering works.

I accept this to be the case, nonetheless in order to accomplish the window opening works, the time for such remedial works was likely to have extended the cost of the scaffold hire marginally. I allow £500 under this head.

65. Items 13-16 amounting to £61,986 do not arise in the light of my findings. The claim for £39,877.38 is fanciful bearing in mind that there was no contractual provision relating to delay in the contract.
66. There remains one matter outstanding. It is misalignment between the first floor and the ground floor. I commented that it was appropriate for a house of this quality and size to have relied upon a remedy other than mere dubbing.

I allow £2,000 under that head.