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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		28/01/2016

Her Honour Judge Taylor:

Introduction

1. For ease of reference I shall refer as necessary to the parties and others who play a part in this claim in the course of this judgment as follows:

i) The Claimant, J Browne Construction Company Limited as JB;

ii) The First Defendant Chapman Construction Services Limited as CCS;

iii) The Second Defendant Andrew Chapman as Andrew;

iv) The Third Defendant Barry Chapman as Barry;

v) South East Water Limited as SEW.

Background

2. The Claimant JB is a civil engineering firm based in Enfield, North London. In early 2013, JB tendered for and was awarded a contract with SEW for cleaning and maintenance works to potable water reservoirs throughout South East England. The Third Defendant Barry Chapman had worked at JB since 2008 as Operations Manager specialising in reservoir refurbishment.
3. The SEW contract involved the use of labour across the South East. JB had insufficient directly employed labour to carry out the contract works. JB therefore entered into a labour sub-contract with the First Defendant CCS, a small firm run by the Second Defendant Andrew Chapman. The Second and Third Defendants are brothers.
4. CCS was the principal labour sub-contractor, but labour was also provided by JB's own employees and by another subcontractor T.Kelly.
5. JB appointed Barry Chapman as the SEW Contract Manager He was a respected and trusted employee. His responsibilities included authorising payment of labour invoices, including CCS invoices provided by Andrew on behalf of CCS, which would also have to be authorised by one other member of JB staff. He was also required to produce health and safety paperwork.
6. During the time he was Contract Manager the second signatory for JB was Kelly Kirby who had worked for JB since 2006 and was promoted to act as SEW Contract Administrator. From about 2012 Barry Chapman and Kelly Kirby were in a relationship, of which JB claim to have been unaware. During the contract period Barry was also carrying out work for Andrew at CCS. There is no dispute that JB were unaware of this at the time.
7. The contract with SEW grew from an initial contract value of around £0.5million, to an anticipated value of £2million over 3 years. In fact, over £2million of work was completed within the first 12 months. JB's anticipated profit margin was originally 5%, but at the end of Barry Chapman's time as Contract Manager was running at around 9.9%.
8. At the end of June 2014 Barry was removed from the contract, but remained at JB for a time doing other work. The reason for his removal was not because at that stage anyone suspected a fraud or misconduct, but because SEW were not satisfied with his performance with regard to health and safety.
9. Bruce Fraser was appointed by JB as Project Manager. Kelly Kirby remained a signatory for the payment of invoices, and from 31 July Phil Hartley, Managing Director of JB took over the role of second signatory. All of CCS invoices from that date until 22 August 2014 were authorised by both signatories and paid.
10. On 1 September 2014 Barry Chapman suffered a serious motorcycle accident and was off work from that date. At that stage JB employed Jonathan Dodd. Mr Dodd went through the documentation for the CCS contract and did not find any timesheets. He carried out an analysis of the CCS invoices comparing them with Principal Contractor Weekly statements (PCWs). These are health and safety records required by SEW showing names dates and shifts worked on their sites, and were prepared by Kelly Kirb. Mr Dodd purported to discover that the CCS invoices claimed substantially more than was evidenced as due by the information in the PCWs.
11. On 6 October 2014, in reliance on Mr Dodd's analysis, JB issued a pay less notice to CCS in respect of one of CCS' unpaid invoices which said that the sum due to CCS was £0. A meeting was arranged with Andrew Chapman on 9 October 2014. Andrew Chapman is recorded in a note of the meeting prepared by JB as saying that CCS invoices had been based on timesheets issued by his labourers. He was accused of fraud and overcharging.
12. The same day Kelly Kirby attended a separate meeting and told JB, according to the note at the time, that"the weekly principal statement may not have been entirely accurate prior to the management changes in July 2014, but was following due to daily reconciliations". She was suspended after this meeting and dismissed on 24 October.

The Claim

13. JB claim that Barry and Andrew Chapman and Kelly Kirby were all acting in concert in a conspiracy and fraud which involved Barry and Kelly ensuring that CCS was paid for work invoiced without timesheets, which were required under the contract, and which deliberately and fraudulently overcharged JB both in respect of the standard work done and overtime. JB allege that Barry and Andrew Chapman have fabricated timesheets and a letter from Barry Chapman to CCS dated 2 July 2013 authorising overtime.
14. The claim is formulated in a number of ways:

i) CCS, Barry and Andrew Chapman are liable for unlawful means conspiracy;

ii) Barry and Andrew Chapman are liable in deceit;

iii) Barry and Andrew Chapman are liable for procuring or inducing breach of the contract between JB and CCS;

iv) CCS are in breach of contract in failing to provide timesheets with invoices, a condition precedent to payment, and are not entitled to overtime as this was not authorised in writing.

15. JB concede that something is payable for the work done by CCS. The extent of that concession is in dispute. A significantly larger claim for JB plant said to be currently held by CCS was reduced at trial to a claim for a pump only.
16. Andrew and Barry Chapman deny all allegations of fraud, conspiracy interfering in any way with the contract .and breach of contract. CCS counterclaims for the outstanding invoices.

The Contract

17. The contract was signed by Andrew Chapman on 12 April 2013. It is said to be on JB's standard labour sub-contract terms, and provides as follows:

Labour & Plant Only Shift Rate Sub-Contract

Sub-Contract Order No. SC002765/1305BC

….

Sub-Contract Summary of Particulars

1. Contract/Site Address: Various sites across the SE Water region

2. Rates or Prices for the Sub- Contract Works (exc of VAT)

In accordance with the following Schedule of 'Daily Shift Rates':

Ganger@ £160 per shift

Skilled Operative @ 150 per shift

Unskilled Operative @ £110 per shift

Signed time sheets by a member of J Browne site management team are to be attached to each invoice submitted

4. Normal working hours

Monday to Friday 0.7.30 am to 17.30 pm ….( 9.5 hour shift) with additional unpaid lunch and working breaks to be taken accordingly

Any overtime working outside of these hours must be instructed in writing by the Contractors Authorised Representative in accordance with clause 5.15 of the Appendix to Sub Contract Order.

18. The appendix to the sub -contract contained the following terms:

5. Payment

5.1. The first and subsequent interim sums for payment shall be due to the Sub-contractor 28 days after the date of receipt by the Contractor of a valid application for payment from the Sub- Contractor (the "due date for payment"). Applications for payment are to be submitted at 14 day intervals. The first submission being the Friday 14 days after the date for commencement of the Sub-Contract Works.

…

5.2. The sub-contractor shall submit to the Contractor with its application for payment a written statement in such form and containing such detail as the Contractor may reasonably require, showing the total value of the Sub-Contract Works that the Sub-Contractor considers it has properly executed up to the date of the application for payment and identifying the names dates and shifts worked by each individual on the project to which the Sub-Contract Order relates.

5.3. It shall be a condition precedent to any sum being due for payment that the Contractor shall have received from the sub-contractor an application for payment and a written statement in respect of that interim sum complying with clause 5.2 above by no later than the corresponding Application submission date. For the avoidance of doubt, if the Contractor does not receive an application for payment of an interim sum from the Sub- Contractor by the corresponding Application Submission Date, no sum shall become due to the Sub-Contractor in respect of the work for which payment is requested in that application for payment.

…

5.15. It is a condition precedent to payment for overtime that prior written authorisation is obtained from the contractors project manager or site manager.

5.16. Overtime Monday to Friday shall be paid at the Hourly Shift Rate divided by 9.5 hours for each hour worked. Saturdays shall be paid at the Hourly Shift Rate divided by 9.5 hours for each hour worked. Sundays shall be paid at the Hourly Shift Rate divided by 9.5 hours multiplied by 1.5 time for each hour worked .Overtime enhancements will only be paid if a full week has been worked (5 days).

Taking the provisions as a whole, the form of document required under paragraph 5.2 is therefore time sheets signed by a member of JB site management team and attached to each invoice submitted.

Disclosure and alteration of case

19. I pause to deal with issues of disclosure. JB makes a number of complaints about failures in disclosure and destruction of documents by the Defendants. These may be summarised as follows:

i) CCS or Andrew Chapman destroyed hand written notes ... if they ever existed) of information he says was provided over the phone by CCS worker which formed the basis of the timesheets prepared initially by him, and subsequently by his wife or Clare Bryan, an Administrator working for CCS.

ii) CCS has disclosed no records of hours or pay of its workers; JB maintain that CCS have not given disclosure of any payroll records. CCS say that they were given access to the SAGE computer payroll system.

iii) Barry Chapman destroyed his laptop computer by putting it through a recycling crusher.

iv) Barry Chapman has not produced the original of the 2 July letter.

20. As far as the destroyed documents and laptop are concerned, JB submit that the maxim omnia praesummuntur contra spoliatorem applies in this case.
21. On the other hand, it is clear there has been selective or no disclosure by JB on central issues, and in particular of documents relevant to the underlying basis for the allegations of fraud:

i) The claim was originally based upon Mr Dodd's analysis of PCWs against JB weekly records of directly employed employees with which they were said to tally, and against CCS invoices which showed discrepancies, What was disclosed was a sample of 15 weekly records for directly employed workers records for comparisons which Mr Dodd said had been picked at random, but showed overcharging by CCS. The remainder of the directly employed worker records (which Mr Dodd estimated were a further 40) were not disclosed until after the evidence was completed at the end of the trial. They were then disclosed with schedules prepared by Mr Dodd which purported to show that the PCWs were more accurate than emerged after he was cross examined about his analysis of the sample of 15.

ii) Billing records from SEW other than those relied on by Mr Dodd were not disclosed until very close to the end of the trial. This was only after an application by Barry Chapman to call a witness from SEW on the clawback of sums paid during his control of the contract was granted. Mr Dodd claimed during his evidence that SEW had clawed back money paid because Barry Chapman had authorised work which had not been done. Subsequently some documents were disclosed.

iii) The time sheets for directly employed workers have not been disclosed.

iv) On the first day of trial , with no prior notice, JB dropped the majority of the claim for plant, disclosed documents having undermined the claim that some items were in the possession of CCS rather than lost or stolen or indeed located elsewhere.

v) When Mr Dodd entered the witness box he withdrew a very significant part of his evidence, again without notice. That evidence at paragraph 30 of his statement was that the PCWs were accurate when he compared them with the JB directly employed worker records on two occasions. Whilst JB did not abandon the claim in deceit, the emphasis shifted to those parts of the claim which did not rely on Mr Dodd, such as breach of contract. A claim for wasted management time in investigating the false invoices was dropped at the outset of the trial prior to Mr Dodd's evidence, but presumably based upon knowledge of the withdrawal of the evidence about checking the invoices.

Mr Dodd's approach and evidence

22. JB's suspicions about payment of CCS invoice began in September 2014 when Barry Chapman was injured and Mr Dodd arrived and carried out what he claimed to be a comparison of the invoices with the PWCs, He claimed to have tested the PWCs for accuracy by comparing them with the JB directly employed workmen timesheets, not once but twice. In essence, as he accepted, in relation to each sample. he was comparing one document with another. Nonetheless, of the 15 samples disclosed he had to accept in cross examination by Mr Mooney on behalf of Barry Chapman, that 8 of them had no relevance to the SEW contract, and of the remaining 7, he had misrepresented the comparison of 5. Therefore, only 2 tallied with the PWCs. It was upon the basis of this highly inaccurate piece of work that JB decided that CCS had been overcharging and issued the Pay Less Notice, accused Andrew Chapman of fraud with Barry Chapman and Kelly Kirby, terminated the contract and refused to pay any outstanding invoices.
23. It is clear from the Claimant's Opening Submissions submitted by Mr Munro on 15 January 2016 that right up to the start of the trial Mr Dodd's work was at the centre of the JB case, as indicated by the section in the Opening Submissions headed "Jonathan discovers the fraud". By the time the case started it must have been clear that there were inaccuracies in the comparison done by Mr Dodd, which JB attempted to gloss over by the retraction of parts of his statement. Those inaccuracies had been spotted by Mr Mooney. Somewhat reluctantly, Mr Dodd was forced to accept his failings. In addition to highlighting the inaccuracies in his work, Mr Dodd was taken through the available SEW cleaning billing notes and was forced to accept that in comparison the PCWs missed off entire cleaning jobs and were therefore demonstrably inaccurate . Similarly, he was taken to his statement where he said that the PCWs recorded times for specialist subcontractors, again shown to be false.
24. Towards the end of his evidence Mr Dodd accepted that CCS were entitled to payment for work they had actually done, and that JB's claim was for the difference between what was due for work actually done and the amount claimed which was said to included overcharging. Had there been no overcharging, JB would not have refused to pay.
25. There is no doubt that Mr Dodd has been the driver of this claim by JB. His evidence started it, and he has dealt with disclosure and signed the pleadings. He was a very unimpressive witness both as to the facts and as to disclosure. He had little credibility. The attempt to ameliorate the effects of the damage to his evidence by late disclosure of some of the documents which had been requested as being disclosable, but with a schedule of his calculations did not improve that impression. M Mooney pointed out that the schedule was inaccurate in itself. It has not been admitted in evidence at such a late stage.
26. Whilst it is clear that Mr Dodd's initial comparison on the documents in September 2014 was a wholly inadequate basis for alleging fraud, I have to consider whether there was in fact a conspiracy to overcharge, or a deceit or procurement of breach of contract as alleged, but on any other grounds which have come to light.
27. JB contend that even if Mr Dodd's evidence cannot be accepted about the invoices showing overcharging, there is other evidence which supports the claims.
28. I turn firstly to the timesheets produced by CCS, which JB claim are not contemporaneous, but are fabricated and backdated.

The Timesheets

29. In the absence of any variation or waiver, provision of timesheets containing specified information was a condition precedent to payment under the contract. That information was the names, dates and shifts worked by each individual on the project to which the Sub-Contract Order relates. The timesheets which were produced by CCS did not contain the name of any individual involved in the project.
30. It is also not disputed that timesheets were not attached to the invoices when they were submitted, which was generally by email. The evidence of Andrew Chapman was that the invoices were compiled by his wife or Clare from information taken down by hand from workers over the phone, which was then used as the basis of timesheets. The handwritten notes were not kept. The timesheets were then dropped off with Barry Chapman by Clare, as she passed his house on the way home. Alternatively, Andrew would hand them to Barry on site to sign. The reason they were not attached or sent with the invoices was that Barry had to sign them. Barry then kept the timesheets. The defendants therefore contend that the timesheets which were in evidence are genuine and contemporaneous and were submitted by CCS to JB via Barry Chapman.
31. JB claim that there never were any timesheets, and all of the CCS timesheets for the SEW contract have been fabricated after the dispute between the parties arose, and backdated. There are no records of them at JB or in any of the contemporaneous correspondence. The timesheets produced for this contract differ from CCS' timesheets for other contracts around the same time, in particular for work at Cliveden where CCS work was signed off by Barry Chapman. The timesheets differ from T Kelly's timesheets on this contract in that they do not have the names of the workers and hours worked. They differ for the same reason from the Crangy Construction Timesheets for 9 June 2013.
32. JB also submit that the timesheets produced in this case are not "proper" timesheets in that they do not perform the function for which they are required and are not the standard form used in the construction industry. It is not possible to determine who worked at what site on what date. That information is necessary to indentify who was on site and to calculate what to pay each man. The evidence of Mr Dodd and Mr Hartley was that invoices in the construction industry are always accompanied by timesheets showing the details required by the CCS contract, including the names of the employees who were working on site. It is right to say that CCS have disclosed no other timesheets from other contracts of a similar kind to the ones relied upon in this case.
33. Further, a comparison of the timesheets for the weeks ending 9 June 2013 and 16 June 2013 and for the weeks ending 8 July and 14 July 2013 with contemporaneous emails from Andrew to Barry Chapman containing details for the same weeks show significant discrepancies.
34. In the email for the week ending 9 June 2013 Andrew informs Barry that at the Cargate site there were 7 shifts for gangers and 6 shifts for labourers. The timesheet claims 10 shifts for gangers and 15 shifts for labourers. For the following week ending 16 June the email claims 7 shifts for gangers and 6 for labourers. The timesheet claims 4 shifts for gangers and 5 shifts for labourers. The invoice for work from 3^rd to 16^th June claims 14shifts for gangers and 20 Shifts for labourers for Cargate. The invoiced amount accords with both the totals for the email and the timesheet, although the shifts in each are different.
35. For the same weeks for Crowthorne, the timesheet tallies with the invoice, but the email claims 2 fewer ganger shifts – a discrepancy of £320 plus VAT.
36. For the July email and timesheets Kelly Kirby has added 3 shifts for expenses at Travis Perkins as expenses. However, although the timesheets differ from the email, they both tally with the invoices.
37. It is significant, however, that even in the emails, no details are given of the names of the employees working on site, evidence that this was not a covert matter, but openly shown in the emails.
38. Andrew Chapman's evidence about these discrepancies was that they were errors. He agreed that there were no names on the timesheets, but said he was submitting them to Barry, who knew who the workers were. He said that during this contract he had up to 25 men working and could not have fitted them all on one sheet. He said that he was only asked to do timesheets on a couple of contracts.
39. Barry Chapman said that he told Andrew that the expenses for Travis Perkins should be put on the invoice for the Selsfield contract where they had been incurred, as there was nowhere else they could go. He said that the timesheets were genuine and he had taken them from his desk when he left.
40. Mr Munro submits that because of the discrepancies and the lack of similar timesheets within the industry the timesheets are bogus and created after the event. Because the original notes have been destroyed, I should presume that they are fabricated.
41. Both Mr Williams for CCS and Andrew Chapman and Mr Mooney submit they are genuine. If they were bogus, Mr Mooney suggests they would have done a better job and put in names of employees.
42. I have concluded that the likelihood is that these invoices have been fabricated after the dispute arose, and indeed after accusations had been made on the basis of Mr Dodd's analysis. The lack of contemporaneous evidence as to their existence, and the discrepancies with the contemporaneous emails which do exist are supportive of their being later documents. Similarly, the lack of similar timesheets for other contractors or for CCS itself again points to their being written after the event, and indeed after the meeting on 9 October 2014 when fraud was alleged.
43. Andrew Chapman said that at that meeting he was confronted with the allegations, and he explained that he thought that the discrepancies Mr Dodd had identified between the PCW and the time claimed in the invoices were due to overtime being charged. Barry Chapman said that after the meeting Andrew phoned him to discuss what had happened, and Barry gave him some advice. I conclude that these timesheets were the result.

Overtime

44. The same issue arises in relation to overtime. Under the contract prior written authority is required. Significantly, however, Mike Heptonstall who took over management of the contract at a later stage said that he believed that authorisation could be by any means, including oral, although it would be better to have a record.
45. At a relatively late stage in disclosure, Andrew Chapman disclosed a letter dated 2 July 2013 from Barry Chapman on behalf of JB authorising overtime on a general basis. It is alleged that this too has been concocted after the dispute arose.
46. Mr Munro took Andrew Chapman through the disclosure history, and it is clear that the letter was not produced until a late stage. Andrew Chapman's explanation was that he had lost it. It had been given to him on site originally, and when he had looked for it and failed to find it, he had therefore asked Barry Chapman for a copy, which was what was disclosed. There are different versions of this document. The copy disclosed by Andrew Chapman is not signed.
47. Barry Chapman's evidence about this was unsatisfactory. He said that he destroyed his laptop, on which this document existed, because he got a new one. He put the laptop through a compactor at a waste disposal centre at the end of January 2015. Prior to that he had received a letter from JB's solicitors warning him not to destroy evidence.
48. The two versions of the letters before the court are in different fonts and have different letterheads and footers. Neither was referred to in lists of documents at an early stage, and nor has any good explanation been given.
49. In addition, the existence of the letter authorising overtime in general is inconsistent with contemporaneous emails between Andrew Chapman and Mike Heptonstall dated 10 July 2014. In his email Andrew Chapman asked for revision of the rates in general , but as far as overtime was concerned he said:

"Weekend working at the moment we just get standard rate".

50. Mr Heptonstall replied:

"Further to our discussion yesterday as per your subcontract terms and conditions (see attached) you are entitled to overtime at time and a half work at weekends and time and a quarter at evenings, This will need agreeing with J Brownes prior to carrying out overtime and is applicable to work carried out beyond the usual 9.5 hour shifts".

51. That is inconsistent with there being a general permission for overtime at a higher rate at the time. Andrew Chapman's explanation was that for the previous week or possibly two Mr Heptonstall had stopped the overtime rate, whereas previously it had been allowed. That is what his email meant. It is difficult to read it in that way. I prefer the evidence of Mr Heptonstall that there was no agreement to pay overtime rates.
52. Looking at the evidence as a whole I find that the 2 July letter was also fabricated after the dispute arose.

Was there a fraud or conspiracy or deceit?

53. I have found that documents were fabricated after the dispute arose. I now turn to consider whether there was a fraud or conspiracy or deceit prior to the dispute arising, as alleged by JB.
54. It is right that Barry Chapman had arrangements which would be seen by an objective observer as conflicts. He admitted for example that he should have told JB that he was doing, as he put it, odd bits of work for Andrew. He also accepted that he was having a relationship with Kelly Kirby, although he said that he thought Mr Hartley knew about that. However, I accept that he did not know.
55. However, the largest area of potential conflict was known to JB. Barry Chapman was authorising payments to his brother's firm. Prior to Mr Dodd's arrival that did not appear to anybody at JB to be a problem. He was a trusted employee, no doubt based on his past performance. Mr Hartley said in evidence that he had no complaints about his work, apart from the health and safety aspects. The complaints from SEW were about safety practices in the reservoirs, and document keeping.
56. Whilst it is alleged that Kelly Kirby was promoted by Barry Chapman, it is clear that Mr Hartley was keen to help her and it was he who put her in the position of Contract Administrator, There was no challenge to Barry Chapman's evidence that he asked for help, but not specifically an administrator. It was Mr Hartley's decision to give Kelly Kirby a chance to progress as a junior Quantity Surveyor.
57. That Barry Chapman needed help is borne out by the fact that after he left, a new structure was put in place which included a further layer of management. During his time the Health and Safety manager Martin Evans also left the contract. Barry Chapman was therefore running a contract which mushroomed from a small contract to one which was anticipated to have a value of £2million over 3 years, but did in fact have a value of £2million in the first year alone. That was accepted by Mr Hartley.
58. It is undoubtedly the case that document keeping was poor and in some respects non-existent. That is not just in relation to documents to be kept by Barry Chapman. The PCWs, prepared for health and safety reasons as required by SEW were not completed for the first three months of the contract and had to be backdated by Kelly Kirby. She expressly stated at the time that they were inaccurate, and so they have proved, were they inaccurate because she was in a conspiracy with the Chapmans? Or was it simply that she was trying, as was suggested, to do the best she could without much information? Had she been part of a general conspiracy as alleged, it would have been more advantageous to match them up with the hours claimed in invoices.
59. Mr Heptonstall, who I found a candid witness, said that when he attended site on most occasions the Attendance Records were either not filled in, or were partially filled in, where workers had checked in, not out. They were JB records, which are not available. It was suggested by Mr Munro that they should have been filled in by CCS as their gangers including Andrew Chapman were in charge. Nonetheless the responsibility lies with JB.
60. Mr Heptonstall said that when he arrived the cost control on the contract was poor. That impression was formed by the work carried out by Mr Dodd. He accepted that this was a busy contract, with lots of sites and wide geography. Whilst he did not accept that it was a difficult contract to administer, he agreed that whereas Barry Chapman had done all the administration, he had help from Bruce Fraser, Kelly Kirby and that Mr Hartley signed off the invoices.
61. After Barry Chapman left, the invoices were signed off by Kelly Kirby and Phil Hartley. His evidence was that he relied on Kelly Kirby and did not check the invoices. He did not look to see if there were timesheets. He was concentrating more on another large contract. With hindsight, he said he should have checked. He too was a witness who acknowledged his errors. He accepted that he had made an error in his first submission to SEW for payment, which was identified and the cause of a refusal by SEW to accept it. That was an honest mistake.
62. There were no timesheets attached to the invoices after Mr Hartley took over, It was Andrew Chapman's evidence that he expressly did not require them. In my judgment what is more likely is that the invoices were submitted as they previously had been, without timesheets, and nobody asked for them. I accept Mr Hartley's evidence on this point that there was no express indication that no timesheets were needed.
63. I have considered the contemporaneous evidence between Barry Chapman leaving and the dispute arising, which I consider is important evidence as to whether there was a fraud or not. I note that the invoices were submitted as they had been before. They were paid. It is significant that the contract remained profitable during Barry Chapman's involvement, but was not for a while thereafter. Whilst it is suggested that this was because SEW re-measured the work and found faults with it on the basis of overcharging, the bases of assessment were different. There was a re-measurement of work done, not hours spent. In fact, there was little evidence of work done by CCS being the cause of any re-measurement. Barry Chapman called Mark Stephens from SEW, to give evidence to that effect. Whilst he accepted that there were documents which indicated that some of the work done during Barry Chapman's time had been questioned, a matter of which he had been unaware, the evidence as a whole fell far short of establishing any real connection between the claims made by CCS and the approach of SEW.
64. JB place great emphasis on the relationship between Barry Chapman and Kelly Kirby, and the reference in the one message between them recovered from the computers and servers which were interrogated that they were a "team of three". I note that this is after Barry Chapman had been removed from the contract. There is no doubt that he was disgruntled about it, as Mark Stephens said in evidence. The question is whether it amounts to evidence of a conspiracy between the Chapmans and Kelly Kirby to use unlawful means to obtain payment, or to interfere with contract by procuring or inducing a breach.
65. I have concluded on the evidence that the Claimant cannot show that there was deliberate fraud, conspiracy or deceit in relation to the invoices. The standard of proof is high, albeit within the civil standard. Whilst I have found both Chapmans to have been untruthful about documents and therefore in their evidence in court, in my judgment they were uncomfortable doing so. They were not naturally dishonest men.
66. The most likely explanation for what occurred is that it arose because of the family relationship. Barry Chapman wrongly did not insist on provision of timesheets because he trusted Andrew Chapman to present invoices that were accurate. He was overworked in running this contract, As Andrew said, Barry knew who all the workers were, and where they were working. Both must have known of the terms of the contract, but did not comply. That was a breach of their respective contracts. However there is no substantial evidence that in doing so they believed that the invoices were inaccurate. The contemporaneous emails tally with the invoices. The calculation by Mr Dodd has been shown to be wholly unreliable. T Kelly have been accused of substantially overcharging also on the basis of Mr Dodd's work. There was no reason for Barry Chapman to allow overcharging by them, and it has not been alleged they were part of the fraud or conspiracy in this claim. This was a contract where more work than anticipated was carried out. When the time sheets were prepared afterwards, they did not always overstate, but understated the work in some respects when compared with the contemporaneous emails. That is not consistent with dishonesty.
67. I consider that the most likely explanation for the backdated invoices is a misguided and wrongful attempt to meet allegations of fraud which they considered to be wholly unjustified, Whilst I have found them to be untruthful witnesses about the documents, they were acting in response to what has been shown to be an unfounded allegation. They knew they had no documents, and therefore attempted to reconstruct them to bolster what they believed to be the proper position. The attempt was crude and did not include all relevant information. However, I find that it is likely that most, if not all of the work for which invoices were submitted was carried out Even applying the presumption in respect of lost or destroyed documents against the defendants, there is no probative evidence upon which the Claimant can argue the contrary. It is likely, however, that given the lack of timesheets there was an element of inaccuracy, which has been present throughout all documentation produced by both sides in this case. Overall, the control of documentation for a contract of this size is dismal.
68. The same applies to the overtime. I accept the evidence that overtime was sometimes required by Barry Chapman at short notice and that the work requested was done. Barry Chapman's evidence about servicing the requirements of SEW was not challenged. There was, however no written authorisation for the overtime to be paid at a higher rate. In addition, on the evidence of Andrew Chapman it was charged on a shift rather than hourly basis as required by the contract and to that extent there was some overcharging. However, the evidence of the emails with Mike Heptonstall show, on a balance of probabilities, that if overtime was being done, it was not being paid at a higher rate. Andrew Chapman said that at the outset of the contract no overtime was charged, but when the men became angry at not being paid the same as JBs own workers, they were paid overtime rates too. I reject that evidence on the basis of the email. Andrew Chapman was still seeking a higher rate after Barry Chapman left.
69. Turning then to deceit, Mr Munro submits that the requirements for deceit, set out most recently in Otkritie International Investment Management Ltd v Urumov [2104] EWHC 191 at paragraphs 57 – 62 are met. However, he fails at the first and second hurdles. He submits that presentations of the invoices were representations that the invoices were payable under the contract. I disagree. Presentation of the invoice is a request for payment for work done, but not necessarily a representation that all terms of the contract have been met. In the contract it is described as an application for payment. In this case presentation without attached timesheets was clearly not in accordance with the contract and there was no misrepresentation of that fact. In addition I do not find that the Claimant has proved that either Andrew or Barry Chapman knew or was reckless as to whether the content of the invoice presented was false.
70. I find, however that there was a breach of contract by Barry Chapman in not requiring timesheets to be provided, breach of contract by CCS in not providing them, and procuring or inducing breach of contract in that respect by both Barry and Andrew Chapman. It is no defence that they did not read the contract terms, which, in any event, I find unlikely: OBG Ltd v Allan [2008] 1 AC 1; Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691.

Damages

71. It is pleaded on behalf of JB that as the provision of timesheets is a condition precedent to payment and that prior authorisation is needed for overtime, nothing was payable. However, it is accepted that if work was done, some remuneration is due. The claimants case is stated as being "not that CCS are entitled to nothing in respect of work done, but instead, as set out in the Re Amended Particulars of Claim, that CCS has overcharged the Claimant by £185,628.40 and is liable to repay that sum".
72. That concession having been made, it is clear that the claimant has limited the claim to the overcharge on invoices. The figure put forward is based on Mr Dodd's calculations which I reject. There is little evidence on which to assess what any overpayment may be. I have considered the documentation as a whole with the presumption in mind as against the defendants. There is inaccuracy accepted throughout. Doing the best I can, I find therefore that the invoices are likely to have been inaccurate with a margin of error, which I assess at 15% of the invoice value, which is to based on errors in the contemporaneous documents. To that extent there has been an overpayment
73. I also find that the overtime was not authorised. The Claimant's concession does not extend to this, and the likelihood is that the overcharging is compounded by failure to calculate in hours rather than shifts. Andrew Chapman conceded that he had to pay shifts to get his men there rather than hours worked. The likelihood is the hours figure is substantially lower. But in any event, I find that there was no agreement that they would be paid at a higher rate than standard rate.
74. The final claim is for the pump. It is not disputed that the pump is currently held by CCS and should either be delivered up or the value paid. That is £16,500.
75. As far as the Counterclaim is concerned, credit has been given for work done which should be paid for. Insofar as any outstanding invoices are concerned, the same applies.
76. I invite the parties to calculate the sums due on the basis set out above. If no agreement can be reached as to consequential orders and costs, a hearing will have to be arranged.