England and Wales High Court (Technology and Construction Court) Decisions

49. The factual setting of the meetings on 8 and 12 July 1996, as appearing from the documents and evidence summarised above, was therefore as follows:

50. Some or all of the matters listed in the last paragraph were obviously ripe for discussion by early July, and it is common ground that many of them were in fact discussed at the two meetings. There is, however, a surprising paucity of evidence, especially in writing, and where there is oral evidence some conflict, as to the intentions and expectations of the two sides in arranging to meet. It cannot, in my view, be coincidental that the documents were hurriedly and belatedly produced and inspected just before the first meeting and that points arising from that inspection were among the first discussed, so that was clearly one of the purposes. The Defendant had as long ago as 3 May called for a meeting to agree the value of the omissions, so I have no doubt that that was another. The Plaintiff's witnesses were emphatic that the main purpose was to discuss their concerns about the deficiencies of the phase 1 design, the need to redesign, and the consequences in costs. The Defendant denies that and suggests that that topic was not raised until the second meeting. The dispute may not be of great moment, because the second meeting was in substance a continuation and completion of the first and Mr Court seems to have been "in the chair" in the sense of setting the order in which points were taken, but I accept the Plaintiff's witnesses' evidence that this subject was not only of great concern to them but was known by the Defendant to be so and to require discussion and that it was raised at the first meeting, although not negotiated in detail until the second.

51. I derive confirmation of those conclusions, and some particularisation of their generality, from a document prepared by the Defendant headed "Meeting Report WOK/60.0113/JULY/96". The date of the meeting is given as "18th July 1996" and the subject as "Signalling Civils Progress Meeting". Those particulars are repeated at the head of each of five succeeding pages. On the first page is the Plaintiff's rubber stamp dated 5 August 1996, initialled under "Seen" by Mr Rossiter and under "To" by Mr Ryan. The persons recorded as present were a Mr Breton of the Defendant, as chairman, a Mr Wynne of the Defendant for part of the time and Mr Ryan and a Mr Rossiter of the Plaintiff.

52. This document was accepted at the trial at face value, both as an accurate record of the meeting with which it deals and as to the date of that meeting. There was no apparent reason to doubt its value in the first of those respects but it seemed to me, on further consideration, that the dating was suspect. In that connection, and for other reasons which will appear, the following items are significant:

53. My reasons for doubting the accuracy of the date were, first, that although the Plaintiff's case is indeed that no contract was entered into at the meetings on 8 and 12 July there was no evidence from its witnesses of any arrangement for a further meeting such as seems to be evisaged by the items quoted above. Secondly the same items would make perfect sense as records of a progress meeting held shortly before, rather than after, those of 8 and 12 July, since all the matters mentioned were indeed discussed at the latter. Thirdly, and most specifically, under "Any other business", item 13.2 reads: "Adtranz urgently wish to resolve stagework items and it was agreed this would be Wednesday 3rd July 1996". In 1996 3 July was a Wednesday; 3 August was not.

54. Because of those doubts I invited further representations from the parties. At that appointment it became common ground that there should be a further short hearing to resolve the issues raised on further documentary and oral evidence. That hearing took place on 20 November 1998. By then it was common ground, as a result of the parties' further researches, that there had been a meeting on 2 July 1996 at which much of the business recorded in the document in question was transacted, but that the document itself, in its typed form, was not created until some time later, very likely 18 July, and was not received by the Plaintiff until the date of its stamp, 5 August. The remaining, narrow, area of dispute was whether, as the Defendant maintained, the whole of its contents (except as appears on its face) derives from the notes and recollection of Mr Breton of what happened at that meeting or whether, as the Plaintiff contended, a few items record events at later meetings or reflect other after-acqired knowledge. I heard further evidence from Mr Ryan and Mr Court; Mr Breton, who chaired the meeting on 2 July 1996 and was the author of the document, was also called. In the light of that evidence and of the further documents produced I am satisfied that in all material respects the contents of the document accurately record or summarise the attendance at and business of the meeting of 2 July, without later addition, except as appears on its face as, for example, when item 5.13 has one sentence recording a question raised by Murphy and a second reading: "Post meeting Adtranz checked but found no problem". It is for that reason that I have included my discussion of it in this section, since it is important confirmatory evidence that the agenda for the relevant meetings included the contract sum, the scope or content of the Plaintiff's work - in particular the "level of design" - and the changes needed in the Railtrack conditions of contract for the purposes of the sub-contract. All these are specifically covered in paragraphs 49 and 50 above; CAD welding and the issue of troughing are not, but were raised at the meetings under one or more of the headings there listed.

55. The meetings of 8 and 12 July were not recorded in any formal way and such informal notes as exist are fragmentary and incomplete. That is itself a relevant fact, although not one to which too much weight should be attached, in considering the question whether these were meetings at which a contract was concluded.

56. On the Plaintiff's side the only note is one by Mr Ryan reading:

57. There are also some sketches made by Mr Brosnahan on four sheets of a ring-bound pad. The first is headed "P. Court", "L. Ryan" and "P. Brosnahan" (those names being bracketed), followed by "Woking ADTRAZ". After the first sketch on the second page appears "Friday. 12th - 10.00. P. Court/ADTRAZ". The sketches are of foundation designs for signal posts or gantries.

58. Mr Court made notes of the first meeting as follows:

59. There is also a very brief note of Mr Court's of the second meeting:

12/07/96.

33. Liam Ryan/Paul Brosnahan

[sketch]

34. Area no UTX schedule W/BF to Woking

Km 33 to 40

[sketch]

* Schedules marked up from plans @ Woking. *

60. Between and after the meetings correspondence between the parties continued on operational matters, but a letter of 12 July from Mr Ryan to the Defendant, for the attention of Mr Court, seems to be related to one of the subjects of discussion. It encloses a sixteen-page document "identifying locations where existing Troughing impinges on proposed Locations for Signal Bases", identifies one area as being "of the greatest urgency" and offers to "submit our estimate for these diversions with handling of existing live cables under supervision of S & T personnel".

61. Another such letter from Mr Ryan of 17 July is relied upon by the Plaintiff. It reads as follows:

35. We write to record our concern that the level of Design Deliverables for WP009, as we now understand it, is substantially greater than we were given to understand at tender stage.

36. At tender stage dicussions, [we] understood or were given to understand the following, regarding Design Requirements for WP009:

i) Phase 1 design for bases for Signal Structures was complete with the exception of a number of Special Bases, the design of which required site specific investigative work.

ii) Phase 1 design for Retaining Walls, Trackside Platforms, Hardstandings, R.E.B's etc were approved standard installations.

iii) [We were] to take over Phase 1 Design as the completed effective design and following a check of Phase 1 calculations, resubmit as Murphy design.

iv) [We were] to carry out site specific investigative work for identified Special Bases and submit full design with calculations for these Special Bases.

37. An allowance of £16,000 was made within our tender .... for item (iii) as we understood it.

38. The site specific investigation and design for item (iv) above is provided for in the provisional sum for Special Bases which also includes additional installation elements which are foreign to the Normal Base installation i.e. piling, cantilever sheet piles etc.

39. We consider that the amount included within our tender for the design reflects our understanding of the limited deign requirement outlined above.

40. Following various discussions with your goodselves and based on rejections of our initial design deliverables, it is quite clear that the design deliverables for WP009 are much greater than envisaged at tender stage.

41. We have established approximate cost of achieving these design deliverables at £145,000.00, and as you are aware we have not allowed for this within our bid.

42. We would therefore ask you to make a fair and reasonable assessment of this situation and we seek an accommodation to adjust our design costs.

62. The Defendant did not respond to that, but Mr Court wrote on 31 July to the Plaintiff, for the attention of Mr Brosnahan, a letter on which in turn the Defendant relies, as follows:

3 ADD Rams 1,031,074.00

4 Omit Rams Terminations as JM letter ....

5 Omit Rams troughing as JM letter ....

6 ADD Design (Ceiling Cost Reimbursable

48. against Submitted Invoices) 130,000.00

63. The Plaintiff in turn did not respond to that letter.

64. The participants at both meetings were Mr Brosnahan and Mr Ryan for the Plaintiff and Mr Court for the Defendant. They all gave evidence, and were indeed the only witnesses at the hearing before me. I do not find myself able to simplify the task of finding the facts, where in dispute, by any general preference for the evidence of one or more of them over others. They were all, in my view, affected not only by the ordinary difficulties of recollection which afflict even the most conscientious witness, but also by an element of wish-fulfilment (although that sometimes, by reason of the way in which the issues developed, had what were probably unintended consequences). I must therefore deal with each case of conflict of evidence on its own merits.

65. The Plaintiff's case is that there cannot have been a concluded contract because on a number of material topics the parties reached no agreement, either because they tried and failed or because they were not concerned at those meetings to do so. Some of those topics are distinct, but others are intimately connected and difficult to consider in isolation. It is therefore necessary to consider with some care in what order to address them in the interests of clarity. I propose to start with the question of design.

66. Mr Court, in his evidence, and Mr Williamson, in the conduct of the Defendant's case, sought to minimise the importance of this question, and even to suggest that it had not been "on the agenda" for the 8 July meeting, although it was the Defendant's own case not only that it was discussed at the continuation meeting on 12 July but that a significant term of the agreement then reached related to it. I have already found that it was on the agenda. Its importance ought perhaps to speak for itself; the basis of the invitation to tender was that the Defendant would have supplied a complete Phase 1 design by 5 December 1995 but it had not done so by the time work started on 18 March 1996, and by the date of the July meetings it was apparent that it never would. Since, however, that importance is denied by the Defendant it is relevant to record some important admissions by Mr Court.

67. It was put to him in cross-examination that the SWIMU report was only a desk-top study and gave no indication of conditions at particular bases. Initially he disagreed (although the phrase "desk study" is actually the report's own self-description) and claimed that it provided a design specific to specific locations.

51. When pressed by reference to a particular site he referred to what he called the "design pack", but since it was not apparent on the face of the page to which he referred how that helped I asked him whether he was saying that the Plaintiff could safely submit a firm price and build to the designs supplied to them, and in reply he accepted that they could not. A little later he accepted a suggestion in cross-examination that qualification 5 to the Plaintiff' tender (quoted in paragraph 30 above) entailed that the Plaintiff was not accepting liability for the "CS" design supplied by the Defendant. A little later again it was put to him that in the event a geotechnical survey was required in order to design and he replied: "To design for construction, yes". I asked him what other sort of design he intended to distinguish by that qualification and he replied: "For price". He agreed, however, that if a firm lump sum price was required there was no useful distinction.

68. I therefore reject the evidence in Mr Court's witness statement that "the problem with design was not one of increased scope, it was simply that JMS realised that they had not allowed enough in their tender price for the design required and therefore were seeking more money". The problem was the Defendant's failure to provide the design which should have been the basis for tenders.

69. As is implicit in the admissions summarised in paragraph 67 above, and in any event obvious from the nature of the situation, that failure had two aspects. The first was that the Plaintiff had to carry out investigations and design work outside the scope of the invitation to tender and wished to be paid for that. The second was that the adequacy of the schedule on which the Plaintiff had priced, and in particular the accuracy of its quantities, was put in question. I shall confine my attention to the former aspect at this point; the latter is best treated in conjunction with other questions going to the amount and variability of the price for the phase 2 works.

70. It is common ground that at the meeting on 12 July the question of an increased payment for design was discussed in detail. Mr Brosnahan wanted £136,000 or £137,000 but Mr Court wished to make any increase conditional upon a matching reduction in the price of the RAMS work. He found about £124,000 in that way (these are the figures at the foot of his note in paragraph 59 above) by omitting troughing, to which Mr Brosnahan agreed, and terminations, which had to go in any event because that was one of the activities for which the Plaintiff was not approved by Railtrack. £124,000 was not enough for Mr Brosnahan, but they compromised on £130,000, against invoices. So much is not in dispute. The issue is whether agreement of that compromise figure was firm and unconditional, as the Defendant alleges, or was subject to conditions, and if the latter whether they were fulfilled.

71. The first condition, according to the evidence of the Plaintiff's witnesses, was that Mr Court required a formal application for the additional design fees, to which he would then respond. Mr Ryan's letter of 17 July, the Plaintiff says, was that letter. Mr Court did not recollect any such arrangement, but he could not say that it did not happen, nor could he offer any other sensible explanation of the letter. Neither can I. I therefore accept the Plaintiff's evidence on this point. In my view, however, this condition was fulfilled by Mr Court's letter of 31 July. It is true that it does not in terms refer to that of 17 July, which was indeed never explicitly answered, but in substance and reality it responded to it by confirming the agreed figure of £130,000, "reimbursable against submitted invoices".

72. The second alleged condition, according to Mr Brosnahan's witness statement, was that the £130,000 was acceptable only if "a standard design for the bases could be achieved to minimise costs". To illustrate that concept, he said, was the purpose of the sketches which he drew during the meeting. Mr Ryan's witness statement does not put it in that way; his recollection was that because he and Mr Brosnahan considered that design could be standardised that should enable them to minimise and control its cost. Mr Court did not recall any such stipulation, although he conceded that it "makes sense". It is not contained in or referred to in Mr Ryan's letter, although that is not particularly significant because by its nature that did not purport to be a confirmation of a concluded bargain. It is not referred to in Mr Court's letter either, but since it was in the Plaintiff's favour the force of that omission also is somewhat weakened. What is rather more significant, in my view, is that there was no evidence that the matter was ever raised again by the Plaintiff with the Defendant, as would surely have been necessary had it been a requirement and had sufficient standardisation not been achievable. Taking all the evidence into account I conclude that this condition either did not exist or was fulfilled.

73. The third condition, according to the witness statements of both Mr Brosnahan and Mr Ryan, was that the agreed figure did not include geotechnical analysis works. The Defendant's case, as put in cross-examination, was that the point was raised and that Mr Ryan wanted to hold out for excluding this work but Mr Brosnahan overruled him. Mr Brosnahan denied that, but when the overruling episode was put to Mr Ryan in cross-examination he said that he thought he had "misunderstood"; he was against inclusion of geotechnical costs, but when it was clarified that the investigation to be included in the £130,000 was limited to local soil sampling and analysis he was happy. Moreover, in his witness statement, he had accepted that in discussion Mr Brosnahan "suggested that geotechnical investigation .... might not be required" and "advised that our main concern .... was the cost of re-design .... £136,000". There does, therefore, seem to have been some difference of view between the Plaintiff's two representatives at some stage, although not necessarily in the face of the enemy, because when Mr Court came to give evidence he did not speak to the "overruling", as put to the Plaintiff's witnesses. He simply said, in cross-examination, that although he did not recall Mr Brosnahan's wanting to exclude geotechnical surveys he equally had no firm recollection to the contrary and that such a desire would make sense. In a situation in which neither party's oral evidence much helped its argued case I find it safer to base my conclusion on a document, namely Mr Ryan's letter of 17 July. That was clearly intended to be a comprehensive formulation of the Plaintiff's case for an increased payment, asked for a "fair and reasonable assessment" against an "approximate cost" of £145,000, and contained no suggestion that geotechnical work would be a further extra. I conclude that the Plaintiff did not make the exclusion of geotechnical work a condition.

74. Finally, the Plaintiff's witnesses say that Mr Court made the increase in design costs conditional upon their "taking on board" all the contents of the (main) contract documents, to which they did not agree. I do not think I need deal with that separately here. There are already issues, to be addressed later, as to whether the parties were at one on the incorporation of main contract conditions and this point can be considered in conjunction with them.

75. I turn next to a cluster of questions concerned with price, and in particular those arising under heads (4), (6) and (7) in paragraph 49 above. As to (6) and (7) the Defendant's case is simply that they were agreed at the figures already proposed in correspondence, subject to the omissions from the RAMS quotation already referred to in paragraph 70 above, and that that is supported by Mr Court's contemporaneous notes and recorded more exactly in his letter of 31 July. In the note of 8 July (paragraph 58 above), where the amounts are rounded to the nearest £1,000, "4677" is the Plaintiff's final tender price (paragraph 36(ii) above), "1005" the Defendant's price of the omissions from work package WP009 required by Railtrack (paragraph 45 above) and "981" is the Plaintiff's price of £1,031,073.96 for RAMS (paragraph 45 above) less £49,935.96 for the omission of terminations. In the note of 12 July the sums totalling £71,500 are for the further omission of troughing from RAMS; I do not recall (if I was given it) the explanation for the increase of the omission for terminations there to £52,500, but it was not suggested that it had any significance for the issues before me.

76. It is a curious feature of this case that neither the figures at the foot of Mr Court's notes of 8 July nor those in his letter of 31 July incorporate the one apparently clear and quantified record of a specific agreement in the body of the 8 July notes, namely item 5, where extra-over costs for signal-sighting are analysed and totalled to £48K. It seems to be common ground that that was agreed; Mr Court explained its absence from the letter of 31 July by saying that he regarded it as a variation.

77. The Plaintiff's witnesses did not dispute that the figures in paragraph 75 above were agreed as "clerical values", in Mr Brosnahan's words. Their evidence, however, was that there was an unresolved dispute about preliminaries. As already recounted in paragraph 34 above the separate item for preliminaries in the original tender had at the Defendant's request been removed and the amount reallocated by adjusting rates in the priced schedule of work. The Defendant's stance was therefore that when items such as terminations were omitted they should come out at the rates finally tendered, including any element representing preliminaries, since the omission would reduce proportionately the work covered by that element. The evidence of the Plaintiff's witnesses was that they challenged that approach, in principle because the cost of preliminaries was not directly proportional and specifically because the cost of signal engineering, a preliminaries item, had primarily been recoverable within the charge for terminations, which was to go, whereas a signal engineer would still be required, and was indeed being requested by the Defendant's staff. The issue was, Mr Ryan said, left unresolved. In his witness statements Mr Court denied that the issue of preliminaries in general or the cost of a signalling engineer in particular was ever discussed, but in cross-examination he agreed that there was already a question whether a signalling engineer would be needed and that this had been an issue from the moment omissions appeared.

78. I accept the Plaintiff's evidence on the signalling engineer point. Although, as I have already indicated, Mr Brosnahan and Mr Ryan were by no means perfect witnesses I do not believe that they invented this story and Mr Court, to some extent at least, resiled from his outright denial that the point ever arose. It is not, of course, mentioned in his letter of 31 July, but then it would not have been because it is not suggested that he had accepted the Plaintiff's position. The question whether the Plaintiff was in some way bound or is otherwise prejudiced by its failure to reply disputing that letter is a general one to which I shall come in due course.

79. Apart from figures, however, there is also the question whether the parties were at one on the question raised in paragraph 49(4) above of the status of any price agreed. The Plaintiff must first establish that it was discussed at the July meetings, for if the parties had been content in this respect to leave matters as they stood on the documents then, given a contract complete in every other way, any conflict or ambiguity would in my understanding simply have to be resolved by ordinary methods of construction.

80. There is in fact no real doubt that the question was discussed. That was not only the evidence of the Plaintiff's witnesses but was accepted by Mr Court when cross-examined about his note 6 of 8 July: "Quants remeasured. Fixed price for activities". It would indeed have been surprising had it not arisen, given that the potential price implications of the design deficiencies (see paragraphs 67 and 69 above) were not taken into account in any other way.

81. The remaining issue is therefore whether, having been raised, it was resolved. I find that the Plaintiff's representatives were contending for general remeasurement. It was certainly what they needed to deal adequately, from their point of view, with the design deficiency problem. Leaving aside the distinction between "quantities" and "activities", about the precise effect of which I am not clear but which does not seem to affect the point of principle, it was what Mr Court's note 6 records, and his own account of the origin and significance of that note was that "I wrote down what Mr Brosnahan was saying". It was what Mr Brosnahan at one point in his cross-examination claimed that Mr Court agreed.

82. If Mr Court did indeed agree then this was not an unresolved difference. The principal evidence that he did not do so was his own. Having given the explanation of note 6 just quoted he continued that he nevertheless considered that there should be remeasurement only if there was a variation from what he called the "design documents", meaning those supplied to the Plaintiff, not if only from the Plaintiff's priced schedule. I asked him whether he put that to Mr Brosnahan and he said he thought so. I asked him how the matter was left and he thought it was left that the Defendant would pay only if the design changed (again, as I understood him, meaning the phase 1 or "Defendant's" design, as distinct from that which was the Plaintiff's responsibility as part of phase 2). I asked him whether it followed that either the parties misunderstood each other or there was no agreement and he replied that perhaps they misunderstood.

83. The Plaintiff's evidence on this point was not wholly consistent. On the one hand there was Mr Brosnahan's assertion, recorded at the end of paragraph 81 above, that Mr Court agreed to remeasurement. Both he and Mr Ryan also said of various specific examples of reasons for change of quantities which they advanced that Mr Court agreed that they could be treated as variations, and one of those may have been the occasion for Mr Ryan's solitary note: "Unforeseen services - excluded". On the other hand, when the distinction between two potential sources of change was explicitly put to Mr Brosnahan in re-examination a rather different response ensued. He was asked first whether there was any discussion of what would happen if work changed because the "S.C." drawings supplied by the Defendant were wrong and a different design was needed. He replied that he believed Mr Court stated that that would be a variation. Asked whether they were told that if the work "as built" differed from the Murphy design they would be paid the difference he replied "No". I then asked him if that would have been acceptable if suggested and he replied that it would have been, but that that "was not the terminology".

84. I find that Mr Court did not agree to general remeasurement. That accords not only with his own evidence and with what Mr Brosnahan said when, in effect, the distinction later taken by Mr Court was put to him, but also with what seems to me to be the strong inherent improbability that Mr Court would have conceded such a potentially open-ended source of increased cost.

85. I conclude that on this question also the parties were not at one at the close of the meetings.

86. I have accordingly found that in two significant respects the parties did not during the July meetings reach agreeement on material terms. In the circumstances I do not think it necessary to analyse in detail the evidence on all the other terms which the Plaintiff alleges were left unsettled. I shall, however, briefly express my conclusions on the main topics of discussion.

87. It is convenient to start with Mr Court's note of 8 July, which is the nearest approach there is to a record. Notes 1 to 3 are cross-referenced to binders in the Railtrack documents inspected by Mr Gillmore and are plainly concerned with questions arising from that inspection, the general nature of which was whether the Plaintiff should in the sub-contract, by reason of the "back-to-back" relationship, be under particular obligations to be imposed on the Defendant by the main contract documents.

88. There was first the issue of PCBs, the standard abbreviation for the class of toxic contaminants having the generic name of Polychlorinated Biphenyls. Mr Gillmore's report on the relevant item simply reads: "35 PCB's (in existing equipment) - Action required". Although never expressly articulated the shared assumption against which the discussion of this point proceeded was that the relevant item in the Railtrack documents imposed liability for and the expense of detecting and dealing with PCBs in existing equipment on the Defendant. (Mr Williamson annexes to his closing submissions what he says are the relevant provisions and submits that they do not in fact impose obligations or allocate risks, but it is clear that that was not the basis either for the discussion on 8 July 1996 or for the evidence at trial.) The Plaintiff objected to the imposition of a corresponding obligation on it on the ground that it had made no allowance for such a cost in its tender, there being no such item in the schedule of work. There was no real dispute as to how the discussion went. Mr Brosnahan's witness statement says: "Peter Court said that the PCB's should not be discussed at this stage until a survey had been carried out to establish if PCB's were present". Mr Ryan, in cross-examination, said that he went to great lengths on that item because they had had a job which cost £1,000 per square metre for PCB removal, and when it was suggested that he was happy he replied: "It was left over".

89. The Defendant contends, in effect, that an agreement to "leave it over" was a sufficient agreement, presumably under head (2) or (3) of paragraph 20 above. Assuming, without deciding, that that would have been so in the absence of the issue whether or not the relevant Railtrack term should be applied "back-to-back" I do not see how it can be true in the instant situation. It was of course the case that there might in the event be no PCBs, and it was therefore not only possible but necessary to "wait and see" in terms of actual treatment. It may be (I do not have to decide the question) that under a free-standing contract parties could be bound despite agreeing to defer resolution of a question of liability which might never arise. If there was to be a present contract here, however, there was no dodging the immediate (not future) question, yes or no, was the Railtrack term on this point to apply "back-to-back"? The matter can be tested by supposing that immediately after the meetings the Defendant had submitted a draft formal contract to give effect to the agreement which on its case had been reached. Such a draft would undoubtedly have contained a "back-to-back" clause, with any relevant exceptions. Would PCBs, or would they not, have been one of the exceptions?

90. Mr Court's item 2 was painting. Here he noted "Murphy's are not painting" and it is not in dispute that that records the agreement reached.

91. Item 3 concerned train running. The issue was whether the term of the Railtrack documents which placed the cost of problems or delays associated with the use of works trains on the Defendant should be passed on to the Plaintiff on the "back-to-back" principle. The Plaintiff's position was obviously that it should not. It was put to Mr Brosnahan in cross-examination that Mr Court accepted that position but he denied that, saying that the point was unresolved. Mr Court said in effect that the Plaintiff had nothing to worry about because the Defendant was supplying the works trains, so that the relevant provision in the Railtrack documents would by its nature not "bite". That, however, was argument rather than evidence that in the meeting he conceded the Plaintiff's requirement that the term should be excluded. He certainly did not record any agreement, as he did on painting. I accept Mr Brosnahan's evidence that this point was left unresolved. It was obviously a material one.

92. Item 4 concerned troughing, and the question is well summarised in Mr Court's note: "If Ex[isting] trough clashes with a gantry base, then who diverts troughing?" Mr Brosnahan said that it was unresolved, and when that was put to Mr Court he agreed, although he added "but I saw it as a site clash", perhaps intending to imply (if so, mistakenly) that it needed no resolution. Mr Ryan's evidence, both in his witness statement and in cross-examination, was that Mr Court accepted liability for such diversions. I accept the evidence of Mr Brosnahan and Mr Court, supported as it is by the fact that in Mr Court's note the question posed is left unanswered, and therefore find that this issue was not agreed. It was clearly a material one.

93. I have already dealt with items 5 and 6. Item 7 concerned the question of cadwelding, specifically identified in the minutes of the recent progress meeting as requiring clarification under the head of "scope of work". Mr Court's note is ambiguous as to whether the question "In or out?" is answered or left open by "currently out". The only evidence seems to have been Mr Brosnahan's, in his witness statement, that Mr Court did not know whether cadwelding was to be used or not. That does not help as to whether this was being treated as a contractual or operational question, and since the point was not pursued in the Plaintiff's closing submissions I do not feel any need to make any separate findings

94. In Mr Court's notes of 8 July there remain only items 8 to 11, which were concerned with purely operational matters or were for other reasons not treated as impinging on the issues before me.

95. There was some suggestion by the Plaintiff's witnesses that in addition to the specific matters arising from the examination of the Railtrack documents already considered they reserved their position more generally on the basis that the opportunity for inspection to date had been inadequate and that they would need to examine them more thoroughly. I do not believe that anything said along those lines can have been of any significance. It was certainly not followed up by any further inspection, nor was there any need for one for contractual purposes until draft formal contract documents were received if the Plaintiff's case that meanwhile there was no contract was correct. This point is connected with the evidence, referred to in paragraph 74 above, that Mr Brosnahan and Mr Ryan rejected a demand by Mr Court that in return for the "uplift" in design costs he required them to "take on board" all the (main) contract documents. I do not think this matters. Mr Court may well at some stage have suggested something of the kind, but it plainly did not affect the outcome at the time, in view of my findings in paragraphs 88 to 91 above, and again could not do so in the future if there was no concluded contract.

96. The remaining item on the "agenda" identified in paragraphs 49, 50 and 52 above was that of the programme. There was, however, no significant evidence that this was pursued at the July meetings in terms of what should be the contractual provisions, as distinct from complaints by the Plaintiff that it was being delayed by inability to obtain necessary possessions, by lack of information and by other defaults on the part of the Defendant or Railtrack

97. That deals with the specific terms alleged by the Plaintiff to have been left unsettled. Some more general considerations were advanced on each side for and against the formation of a contract. I have already referred to one in paragraph 55 above - the informality and incompleteness of the only contemporaneous records. After the more detailed consideration which I have now completed of the most important of those records - Mr Court's notes of 8 July 1996 - it can be added that although scrappy in appearance they do give some clues, albeit of variable clarity and reliability, as to whether the questions raised were or were not answered, which gives significant support to the conclusion that not all of them were. There is also the fact that Mr Court's letter of 31 July neither purports to confirm the reaching of an agreement nor refers to any of the matters (except as to price) which it is now the Defendant's case were settled at the two meetings. Mr Court gave no adequate explanation of that omission; his witness statement claims that he confirmed "all of the matters discussed at the meetings", but that was simply not true.

98. On the other side reliance is placed first on the fact (it is said) that the parties had reached "commercial agreement" on 15 March 1996, subject only to Railtrack's decision on the Plaintiff's acceptability, and secondly on the Plaintiff's failure to dispute the letter of 31 July. I do not see how the first point assists. Had there been no outstanding question of acceptability in March the questions surrounding the deductions from price would not have arisen, and there might not have been any RAMS work, but all the other issues discussed in July would have had to be resolved before a contract could have been entered into. As to the letter of 31 July Mr Brosnahan's explanation was that he was waiting for the sub-contract documents. That is not convincing; the letter itself expressly requests "your agreement to the above" as a prelude to finalising the sub-contract. My own conclusion is that the Plaintiff simply thought its purposes best served if nothing was brought to a head for the time being. That may not have been a particularly admirable stance in terms of good business practice, but I do not see how it can turn failure to agree material issues into agreement. I am of course at this point dealing only with failure to respond as evidential of an earlier contract; the Defendant has a quite distinct alternative case that it was constitutive of a contract when taken in conjunction with the continued execution of the works, but I shall deal with that separately.

99. Both sides also relied on subsequent events, but as always I approach the suggestion that they can be of assistance with considerable reserve. What parties think about the legal effect of what they have done is frequently mistaken and cannot prevail over a true view of that effect. On the Plaintiff's side it is said that when the Defendant did eventually submit formal sub-contract documents in June 1997 their terms differed in important respects from those now alleged by the Defendant to have been agreed at the July meetings. I have not considered the factual basis of that contention in any detail but, assuming that it is correct, it does not in my judgment materially assist the Plaintiff, not only for the general reason already given but also because in such circumstances drafts frequently fail to accord with what has previously been settled, whether from simple incompetence or deficiencies in communication or for less creditable reasons.

100. The Defendant, for its part, placed great weight on the fact that in subsequent correspondence the Plaintiff frequently referred to the "contract" or to "contractual" rights and obligations. I am satisfied that many of the uses of the noun were examples of a widespread practice of employing "contract" not in any technical legal sense but simply as a synonym for "job". There were, however, other instances in which the existence of a contract in a legal sense was asserted or assumed. I take that into account, and am willing to assume that in a case in which the direct evidence was more evenly balanced it might affect the result, but in my judgment this is not such a case.

101. There was evidence as to the frequency (as the Plaintiff alleged) or infrequency (on the Defendant's case) of the former's requests for a draft formal sub-contract, but I did not find that of any assistance either way.