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Cite as: [2011] EWHC 1122 (TCC)

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		Neutral Citation Number: [2011] EWHC 1122 (TCC)
		Case No: HT-10-261

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

04/05/2011

B e f o r e :

THE HON. MR.JUSTICE RAMSEY
____________________

Between:

	KINGFISHER BUILDERS	Claimant
	- and -
	CHRISTOPHER SEAR	Defendant

____________________

Mr Christopher Aylwin (instructed by Mills & Bann, Newbury) for the Claimant
Mr Robin Neill (instructed by Morris Godard & Ward, Devizes) for the Defendant
____________________

HTML VERSION OF JUDGMENT
____________________

The Hon. Mr. Justice Ramsey:

Introduction

These proceedings concern a claim by Kingfisher Builders against Mr Sear for the cost of works carried out redeveloping Mr Sear's house in Lammas Lane, Esher, Surrey ("the Property"). There is an issue as to whether Kingfisher Builders is a partnership or merely the trading name of Mr Michael Chudley. I do not need to resolve that issue at this stage and I shall refer to Kingfisher Builders or Mr Chudley where appropriate.

Mr Sear entered into a written agreement with Mr Chudley on 30 June 2008 for the renovation and extension of the Property. After commencing works in July 2008 it was discovered that some of the walls which were to be retained were built of hollow clay-pot bricks/tiles ("clay-pot tiles") which were not of sufficient strength to carry the weight which was intended to be imposed upon them. As a result it was decided to demolish and rebuild those walls.

A dispute has arisen as to what agreement was made by Kingfisher Builders and Mr Sear in respect of the payment for the work then necessary in the light of the demolition and reconstruction of those walls, as well as to other matters which are alleged to be additional work.

By 3 December 2008 Mr Chudley was seeking further payment from Mr Sear and Mr Sear was saying that he had made any further payments to Mr Chudley for the work necessary including the demolition and reconstruction of the walls. This led to Kingfisher Builders leaving site and to the work being completed by Mr Sear using, in part, workers who had previously been engaged by Kingfisher Builders. This has given rise to disputes as to the effect of Kingfisher Builders leaving site and as to what further payment is due from Mr Sear to Kingfisher Builders.

Before considering the issues in this case it is necessary to set out some further background.

Background

In about October 2007 Mr Sear decided to redevelop the Property and made contract with Mr Neil Baldwin of Matrix 24 Limited, structural engineers and building advisors, who carried out design services. In November 2007 after some initial discussions Mr Sear engaged Mr Baldwin to carry out the necessary design work up to the preparation of a full planning submission and, if planning permission were granted, for the further work necessary for the preparation of a submission for Building Regulations approval.

An application for planning permission was made to Elmbridge Borough Council in March 2008. Subsequently, on 4 April 2008, Mr Sear received a letter from Mr Chudley saying that he had seen the planning application and proposing that he should give an estimate for the work. He enclosed photographs showing a property where he said he had almost completed an extension. He indicated that Mr Sear was welcome to visit that property and the lady concerned would allow him to see the work. Mr Sear contacted Mr Chudley and met him and then later went to view the house and met the lady. It subsequently transpired that the lady was Mrs Francine Whale and that Mr Chudley was living at the property. There is an issue as to whether Mrs Whale is a partner in Kingfisher Builders but she was certainly involved in the business of Kingfisher Builders, at least to the extent of dealing with paperwork.

Planning permission for the redevelopment of the Property was granted on the 18 June 2008. The proposed works were described as being a "two story front extension, roof extension with rear dormer windows, alterations to fenestration and side solar panel."

On 24 June 2008 Mr Chudley provided Mr Sear with an estimate in the following terms:

"Your job is going to cost £218,000 this includes everything we talked about, under floor heating, new central heating system, mega flow system, lighting as you wish, such things externally we would take off existing render and re render so the outside would be as one. What is not included is the new kitchen or sanitary wear (sic) as you would want to choose your own. An allowance has been made to fit all sanitary ware and an allowance for tiling in all bathrooms, painting and decorating is also allowed for, as a professional painter can enhance the finish very much, all other fittings as original house. If you do take us on of course a full specification will be supplied. The job will start as you wish on July 1^st and you will be in for Christmas. A 2% retention will be left for maintenance for 6 months, a small works contract will be at your request."

Following an e-mail of 25 June 2008 from Mr Chudley setting out further details, Mr Sear produced a letter dated 30 June 2008 on headed notepaper of Kingfisher Builders which was signed by Mr Chudley. That letter set out details of the quotation of £218,000. That two page letter was also signed by Mr Sear and became the contract between the parties ("the Contract"). It was based upon the plans and specification including those produced for the purpose of Building Regulations approval. Mr Sear paid the claimant £10,600 as a 5% down payment on starting the project on 30 June 2008.

By a date in July 2008 work had proceeded to a stage where Kingfisher Builders had removed the existing roof from the property. On doing so it was discovered that the external walls of the property were built from clay-pot tiles and then rendered inside and out. This meant that the walls would not be able to support the structure which was to be imposed on those walls in accordance with the design in the plans which had been submitted for Building Regulation approval. As a result there was a discussion between Mr Chudley and Mr Sear in which it was agreed that Kingfisher Builders would demolish and rebuild the remaining external walls of the Property instead of the original intention of leaving them in place and using them as part of the structure for the redeveloped Property.

There was a discussion between Mr Chudley and Mr Sear during which a sum of £38,400 was agreed. There is an issue as to the scope of the work agreed to be carried out for that sum and also as to whether or not 10% should be added to the figure. In addition, there was a similar agreement in respect of a spine wall which was also to be removed and rebuilt. In that case a sum of £1,600 was agreed and again the scope of the work within that agreed sum is disputed as is the claim for an additional 10%.

Work then continued with the demolition and rebuilding of the external walls and the internal spine wall. There were various other changes allegedly made to which I will refer when I come to review the claims made by Kingfisher Builders.

In a letter dated 1 August 2008, which like a number of letters Mr Sear said he received on 20 November 2008, Mr Chudley wrote to Mr Sear stating that he had proceeded with the demolition of the walls which would be "done at cost price of men and time." Kingfisher Builders produced an invoice which is dated 30 August 2008 but which Mr Sear said was received on 20 November 2008, in which the cost of demolition has been set out in the sum of £29,975. Mr Sear said that this work was included in the sum of £38,400 which was agreed but Mr Chudley said that it was only the rebuilding of the blockwork walls which was included in that sum.

Mr Chudley wrote a letter dated 30 September 2008 which, again, Mr Sear said he received on 20 November 2008, saying that the demolition payment was very late and he needed payment.

By a letter dated 15 October 2008, again which Mr Sear said he received on 20 November 2008, Mr Chudley wrote in the following terms:

"You continue to pay me on the basis that I am doing the original extension. Please, to rebuild is a completely different kettle of fish. A simple basis for a 3000 square foot house would be £600,000 at £200 a foot, but with the demolition on top of that £30,000, plus a double garage plus the spec you have now ordered, yes all this extra work will enhance the price of the house particularly the tile hanging. But what about the builder, I must now insist upon payment of the demolition payment and something towards all the other extra work you have ordered."

In a letter dated 30 October 2008 which again Mr Sear said he received on 20 November 2008, Mr Chudley again requested the demolition payment. On 5 November 2008 (again a letter which Mr Sear said he received on 20 November 2008) the claimant wrote to Mr Sear to say as follows:

"You have ignored my requests for payment of the demolition and all the other payments but continue to order extra after extra. I am now going to consult a firm of surveyors to try to convince you that I am not building an extension for you but a 3000 foot new house, the cost of which is completely different to the original extension. You keep adding and adding extra work the cost of which is very substantial."

Mr Sear had produced Confirmation of Payment sheets setting out payments made to Mr Chudley which were then signed by Mr Sear and Mr Chudley. The payments were made partly in cash and partly by the use of a credit card which Mr Sear had provided to Mr Chudley. In the Confirmation of Payment sheet dated 4 November 2008 the total cash and MasterCard payments were set out as £234,695.71. The build up of the figure is set out on a payment summary sheet which in the bundle is the next page after the signed Confirmation of Payment sheet. A similar payment summary sheet comes after each confirmation of payment sheet. It is in the same format for all the Confirmation of Payment sheets from 16 September 2008 onwards. Mr Chudley said that he did not receive these payment summary sheets attached to the Confirmation of Payment sheets.

Mr Chudley wrote Mr Sear an undated letter which Mr Sear said was received on 28 November 2008 in which he said that he had employed a firm of surveyors who had produced a report and an estimate which stated that the cost of the new building was £400,000 plus demolition and the garage at £12,000. In a further undated letter, which Mr Sear said he received on 20 November 2008, Mr Chudley enclosed five invoices "for what the job actually cost" and stated that the only invoice which had been paid was that for rebuilding of the brickwork. He referred to the cost of demolition, plastering the brick work, under floor heating, tile hanging to the elevations, plumbing, electrics and carpentry. The letter also complained about the presence of Mr Sear on site most days telling the men working for Kingfisher Builders what to do.

There was then a meeting at the property on 28 November 2008 at which Mr Chudley put forward a cost of £75,000 to complete the works. Mr Sear put forward a written proposal which proposed that, in addition to the revised and agreed amount of £258,000 (£218,00 plus £38,400 and £1,600) there should be an additional payment of £52,000. This led to an offer of £300,000 to complete the works.

No agreement was reached. Kingfisher Builders then left site on 3 December 2008, with Mr Chudley complaining that he had not been paid. The matter was then placed by both Mr Chudley and Mr Sear in the hands of their respective solicitors.

These Proceedings

Proceedings were begun by a Claim Form dated 29 December 2008 in the Swindon County Court and an Order was made on 12 April 2010 for a report from a single-joint expert on matters of quantum. Regrettably the report produced by the single joint expert was considered to be unsatisfactory by both Mr Chudley and Mr Sear and they decided to abandon the single joint expert route.

The matter was transferred to the High Court on 9 July 2010 and then transferred into the Technology and Construction Court. Directions were given on 30 July 2010 and on 19 November 2010 it was ordered that there should be a trial of two preliminary issues for three days. Those issues were defined in the following broad terms:

All issues of liability save for any issue concerning which, if any, party repudiated the contractual or quasi-contractual relationship between the parties (in or about November or December 2008).

Any issue concerning sums paid by Mr Sear to the claimant or by Mr Sear on behalf of the claimant.

All issues of quantum and any issue concerning repudiation were therefore to be the subject of a separate trial.

On the pleadings there were various matters which needed expert engineering opinion. Permission was granted for the parties each to rely on expert engineering evidence and they each appointed an expert. The two experts were able to come to helpful agreements in their joint agreed statement and at a pre-trial review it was ordered that the evidence of the expert engineers would be given in written form only, in accordance with their reports. In the event it has not been necessary to refer to any of that expert evidence.

Given the broad phrasing of the preliminary issues it was necessary at the commencement of the hearing to identify what were the issues of liability and what issues there were concerning sums paid by Mr Sear. In opening the case Mr Christopher Aylwin, who appeared on behalf of Kingfisher Builders, indicated that a number of issues which had been pleaded previously would no longer need to be resolved.

After further consideration by the court and counsel, Mr Aylwin and Mr Robin Neill, who appeared on behalf of Mr Sear, were able broadly to agree what the issues were and were also able to narrow those issues. A schedule of variations was produced by Mr Aylwin to indicate the scope of the claim for additional work and was responded to by Mr Neill. It therefore conveniently set out the issues in relation to 21 items of alleged additional work which I deal with below.

The agreed position

The Parties were able to agree on a number of matters. It became common ground that:

(1) The sum of £218,000 agreed by the parties for the original works in the written agreement dated 30 June 2008 was based upon the work to be carried out in accordance with the Original Planning and Building Regulation drawings (Bundle 5 pages 749-757, 762 to 778 and 779 to 788).

(2) To the extent any work has to be valued as a reasonable sum then that sum has to be evaluated based on an analysis of the sum of £218,000 for the original works and so as to represent the sum included within the £218,000 or which would have been included in the £218,000 had the work been included at that stage, calculated as follows:

(a) To the extent that work is within the scope of the original work, the sum derived from the analysis of £218,000 for that original work should be used.

(b) To the extent that the work is not within the scope of the original work but there is similar work within that scope, then it should valued on the basis of a reasonable sum calculated by using the rates and/or prices for the similar work.

(c) To the extent that the work is not within the scope of the original work and there is no similar work within that scope, then it should be valued using cost but using any applicable labour and plant rates or percentage uplifts in the analysis of the £218,000.

The parties also agreed that:

(1) The court would at this hearing determine the value of the original works in the written agreement with such necessary additions or omissions as would represent the works which were included in the revised scope of the works at 3 December 2008.

(2) The court would not at this hearing determine the extent to which the revised scope of the works had actually been carried out by the claimant at 3 December 2008.

(3) The sums paid by the defendant to the claimant are £243,524.80 as set out in Schedule 1.

(4) There is a dispute as to whether the sums of £38,400 and £1,600 agreed in respect of the existing walls and the spine wall should have 10% added to them.

The parties also made the following agreements and defined the following issues as to how the work has to be valued:

(1) In respect of work carried out prior to discovery that the existing walls were built from clay-pot tiles, the works have to be valued on the basis that they were included within the sum of £218,000 agreed by the parties for the original works in the written agreement dated 30 June 2008.

(2) In respect of the work of demolition of the existing clay-pot tile walls, the claimant says that the work has to be valued as a reasonable sum because it was not included within the agreed sum of £38,400 (plus 10%). The defendant says that the work was included in the agreed sum of £38,400 or, if not included, it has to be valued as a reasonable sum.

(3) In respect of the rebuilding of the new walls to replace the demolished clay-pot tile walls, the parties agree that the costs of building the blockwork walls were agreed. The claimant says that the sum of £38,400 (plus 10%) represented this work; the defendant said that this work and other work was included in the agreed sum of £38,400.

(4) In respect of the plastering, electrical work, heating work/radiators, architraves and skirtings and other work necessary to put the rebuilt walls in the same state as the existing walls would have been, the claimant says that there was additional work which has to be valued as a reasonable sum because it was not included within the agreed sum of £38,400 (plus 10%). The defendant says that the work was included in the agreed sum of £38,400 or, if not included, it has to be valued as a reasonable sum.

(5) In respect of the demolition of the spine wall the claimant says that the work has to be valued as a reasonable sum because it was not included within the agreed sum of £1,600 (plus 10%). The defendant says that the work was included in the agreed sum of £1,600 or, if not included , it has to be valued as a reasonable sum.

(6) In respect of the rebuilding of the new walls to replace the demolished spine wall, the parties agree that the costs of re-building the spine wall was agreed. The claimant says that the sum of £1,600 (plus 10%) represented this work; the defendant says that this work and the demolition work was included in the agreed sum of £1,600.

(7) In respect of other work, the claimant says that the work has to be valued as a reasonable sum; the defendant says that it was either part of the original work scope or that the basis of valuation was agreed or if, it was additional work, it should be valued as a reasonable sum.

This meant that the main issues which had to be decided were as follows:

(1) What was agreed between the parties after the discovery of the clay-pot tiles in the wall as to the scope and cost of the work necessary because of the demolition and rebuilding of those walls and the spine wall?

(2) Is Kingfisher Builders entitled to any further payment in respect of:

(a) Issues 1A and 1B: demolition and rebuilding of the clay-pot tile walls?

Issue 14: Additional electrical works associated with the rebuilding of the external and spine walls?

Issue 16: Plastering of the walls rebuilt following demolition?

(b) Issue 2: The construction of blockwork walls at first floor level?

Issue 11: Increasing the size of the RSJs at first floor level?

(c) Issue 3: Building stud work for a flat TV?

(d) Issue 4: Three sliding door frames?

(e) Issue 5: Moving the bathroom at second floor level?

Issue 6: Re-locating the SVP, drainage and manhole for the bathroom at second floor level?

(f) Issue 7: Fibreglass insulation between ground floor and first floor and first floor and second floor.

(g) Issue 12: Increasing the area of the crown roof?

Issue 8: Constructing a Velux window in the crown roof?

(h) Issue 9: Installing hanging tiles on the external faces of the Property?

Issue 21: Changing roof tiles from clay tiles to concrete tiles?

(i) Issue 19: Installing "scalloped" flashing under the windows?

(j) Issue 10: Chasing pipework into walls?

(k) Issue 13: Concrete oversite to the ground floor of the Property?

(l) Issue 15: Additional carpentry to the bedroom wardrobes?

(m) Issue 17: Renewing central heating radiators?

(n) Issue 20: Installing vanity units?

The Evidence

I heard evidence from Mr Chudley and Mr Sear. Mr Chudley had produced two witness statements, the first dated 24 September 2009 and the second dated 6 December 2010. Mr Sear also produced two witness statements one dated 2 November 2009 and a supplementary witness statement dated 6 December 2010.

Mr Chudley is no doubt an experienced builder who has carried out a number of projects including, more recently, house conversion projects. He evidently feels deeply that Mr Sear should pay him more for the work which he carried out at the Property before he left the site on 3 December 2008. He is sure that the work which was carried out by Kingfisher Builders changed from being an extension to a house to demolishing the existing house and rebuilding a new one. However, he lacks ability when it comes to organising the financial side of projects and keeping records. This meant that much of his evidence depended on his memory which was poor and he lacked any detailed recollection of what the builders he engaged had done on site or when it was done. There was no paperwork to show how he had calculated any prices and given that he was paid substantially in cash he did not seem to have any records of what he had been paid and when.

Mr Sear had a much better knowledge of what had happened and when. He had taken a series of photographs which showed the progress of the work and had prepared confirmation of payment sheets which recorded what had been paid and when. These were countersigned, at least initially, by Mr Chudley. Mr Sear annotated each document with when it had been received. He was also able to say when he was away abroad because he produced his passport which recorded the travel. He was very often present at the Property and carried out some work. He also had a good memory of the detail of what had happened, no doubt supported by his records.

So far as credibility is concerned, having observed both give evidence, I have preferred the evidence of Mr Sear over that of Mr Chudley. Mr Sear gave his evidence calmly and carefully and he was well prepared to support the evidence with photographs and documents. Mr Chudley was much more emotional and asserted things which could not be supported or were contradicted by documents. There were a number of aspects of his evidence which were unsatisfactory of which two stand out. First, it is clear that he sought to attract Mr Sear's custom by making it seem that Mrs Whale was an independent person for whom Mr Chudley has carried out work, concealing the fact that he was living at her house and she was involved in the business of Kingfisher Builders. Secondly, he evidently did send Mr Sear a number of letters in an envelope on 20 November 2008 whilst trying to make out that those letters were sent on various earlier dates. Mr Sear has retained the envelope which shows it was posted on 18 November 2008 with postage of 78 pence, making it clear that, contrary Mr Chudley's statement that he send the letters as individual pages in a large envelope, the envelope evidently contained the fourteen pages which Mr Sear said it did.

Mr Chudley sought to suggest that Mr Sear had entered incorrect dates on the photographs which were provided as a bundle of evidence. Mr Sear accepted that he might have put the dates on those photographs a few days afterwards so there might be an inaccuracy of a few days but that they generally showed the right date. The accuracy of the dates is supported by the fact that there is a gap in the date of the photographs between 8 August and 30 August 2008. Mr Sear's passport shows that he arrived in South Africa on 10 August 2008 and travelled to Australia and arrived in New Zealand on 25 August 2008. He said he left from Heathrow on Saturday 9 August 2008 and arrived back on Saturday 30 August 2008 which is consistent with this.

Mr Chudley referred to a document which showed that the Building Inspector had come to inspect the roof on 30 September 2008 and said that this was inconsistent with a photograph showing the roof felted and battened on 15 September 2008 as the inspection must have taken place before the roof was felted and battened. He said that a builder cannot cover the roof until the Building Inspector has passed the roof, so the date on the photograph did not correspond with the Building Inspector's visit. Whilst that may or may not be the practice I see no reason why the Building Inspector could not pass a roof once it had been felted and battened and I had no evidence from anyone to show what had happened at the time. I do not consider that this undermines the date of 15 September 2008 on the photograph. I therefore accept that the photographs accurately show the progress of the works within a day or two of the date on the photographs.

Mr Chudley relied on a three page typed document which set out a diary of events from 30 June 2008 to 6 October 2008. In it he sets out that the discovery of clay-pot tiles was on 8 July 2008 and that demolition started on 10 July 2008 and ended on 10 August 2008, with additional brickwork starting on 11 August 2008 and finishing on 15 September 2008. He could not recall when he produced that but from the documents it seems that it was produced in about May 2010. It is inconsistent with the record shown on Mr Sear's photographs and, given the absence of any records to support it, I do not consider that it can be relied on as accurately recording when the demolition and additional blockwork was carried out.

Mr Chudley also sought to say that the summary payment sheets were not attached to the Confirmation of Payment sheets which he signed. That point was first made in his evidence. He was shown the summary payment sheets from 16 September 2008 onwards which had this annotation: "Total Value £218,000 (original project cost) adding £38,400 (additional building work/windows) finally, adding £1,600 (internal support wall) = £258,000.00 Final Total". Mr Sear accepted in cross-examination, that the payment summary sheet attached to the Confirmation of Payment dated 4 November 2008 showed an item 19 which referred to a payment which had been made on 11 November 2008, which he could only assume was a mistake as it was after 4 November 2008, the date of the Confirmation of Payment. I do not consider that this shows that the relevant sheets were not attached. Rather, I accept Mr Sear's evidence that he attached the payment summary sheets to each of the Confirmation of Payment sheets after 15 September 2008.

With those observations, I now turn to consider the first issue which concerns the agreement made between the parties in and after July 2008 when the walls were discovered to have been made of clay-pot tiles.

The agreement

The agreement made in and after July 2008 has to be considered against the background that the parties were varying the Contract which had been entered into on 30 June 2008, shortly before work started. The Contract specified a fixed price of £218,000 for all the work contained in the plans and specifications, including the new double garage. The Contract then set out that the price included 22 items. Under various of those items there was an allowance of a particular sum, for example, an allowance of £500 for kitchen wall tiles, to cover the tiles and fitting. If the cost exceeded that allowance then an additional sum would be payable.

In his original witness statement Mr Chudley said that within a week of commencing work it was discovered that the property was built of clay-pot tiles. He said he raised the problem with Mr Sear and new plans and specifications were prepared by the architects. He said that he subsequently wrote to Mr Sear on 1 August 2008 to confirm the position and the costs for the additional work. He said he was instructed by Mr Sear to carry out the demolition work which took 5 weeks and was completed on 10 August 2008. He said that he delivered an invoice to Mr Sear dated 30 August 2008 for the additional costs of the demolition work in the sum of £29,975. He said that the price was calculated at cost plus 10%. He said that the rebuilding work commenced on 11 August 2008 and continued at a very fast pace, although he did not renegotiate the contract terms or the price. He said that at Mr Sear's request he gave him a price for the additional rebuilding work costs at £38,400 which he accepted and the additional brickwork was completed by 15 September 2008.

In his second witness statement he said when the work started he and Mr Sear did not discuss the overall effect on the contract but he was happy to proceed on the basis of "cost plus 10%" whilst the walls were demolished and rebuilt. He said that he told Mr Sear that he would deal with the demolition as day work but gave Mr Sear a price of £38,400 for the rebuilding. He said that Mr Sear wanted an internal spine wall re-built and this added a further £1,600 so that the work totalled £40,000 and came to £44,000 inclusive of 10% profit.

In his evidence Mr Chudley referred to the invoice dated 30 August 2008 for demolition work and confirmed that that represented the work which had been carried out. He said that the cost of £38,400 for the external walls and £1,600 for the spine wall had been agreed as the cost of rebuilding and that he had said that everything he did would be for cost plus 10%. He said that those costs would not include demolition because the cost of materials for rebuilding was some £20,000 and the labour for five weeks was also some £20,000 and, on that basis, demolition could not be included in the price.

In his witness statement Mr Sear said that in the process of demolishing the front wall and the roof it was discovered that the parts of the side and back walls which were to be retained were not solid brickwork but hollow terracotta blocks. He said he was advised by Mr Chudley to demolish and rebuild these walls in blockwork with a render finish. He said that having looked at the work Mr Chudley advised him that he wanted an extra £38,400 on the agreed contract price to take account of the extra work. He said that his understanding was that this included everything extra that Kingfisher Builders would have to do. Mr Sear said there was a meeting on site at about the end of July 2008 and he was concerned about escalating costs and thought £38,400 was too much and therefore offered to pay £32,000 which was agreed there and then. He said that the majority of the work had been completed by the time he returned on 30 August 2008.

He said that in late July/early August the internal walls were also being demolished and only a short section of wall remained. He said he was worried about it and shortly after leaving for his trip abroad he spoke to Mr Keeling on the phone. Mr Keeling worked with Mr Chudley and his name appeared on the notepaper of Kingfisher Builders. Mr Sear told Mr Keeling that he was concerned that this spine wall might not be strong enough. Mr Sear said that Mr Keeling agreed and he asked him to do the work. He said that no price was agreed but when he returned at the end of August, Mr Chudley said he wanted £1,600 for this and he agreed.

He said that in about mid-September 2008 Mr Chudley raised again the issue of the external walls he had to demolish and rebuild and, although he and Mr Chudley had already agreed the figure of £32,000, Mr Chudley insisted that Mr Sear should pay him £38,400, the figure he had originally asked for, He said that Mr Chudley vehemently denied he had ever agreed £32,000 and Mr Sear said that he had no alternative but to acquiesce in the demand although he thought Mr Chudley was simply wrong.

In his supplemental witness statement Mr Sear said that it was on Friday 25 July 2008 when Mr Chudley showed him the hollow clay-pot tiles. He said that Mr Chudley told him that he would get together with Mr Keeling over the weekend and work out a cost for carrying out all the additional work which would result from this. He said that he and Mr Chudley agreed to meet on site on the following Monday, 28 July 2008 to discuss the additional cost. He said they met and Mr Chudley informed him that the additional cost in total would be £38,400 which he negotiated down to £32,000 which was agreed. He said that the figure was the total additional cost to the project as a result of having to demolish and rebuild the three remaining walls. He said he attended site on 6 and 8 August and took photographs which showed that the new walls were all but completed to first floor level. He said he left the next day for Australia and New Zealand and remembers phoning Mr Keeling from the airport and discussing the rebuilding of the only wall left on the ground floor and this led to it being agreed to demolish and rebuild it. He said that Mr Chudley informed him on his return that the additional cost was £1,600 which he agreed to.

In his evidence Mr Sear confirmed that the clay-pot tiles had been discovered on a Friday, 25 July 2008. He said that he met Mr Chudley on 25 July 2008 and Mr Chudley had told him that he would give him a cost for removing and rebuilding the walls, including everything in the price.

He said that on 28 July 2008 Kingfisher Builders demolished the rear and the two side external walls of the Property. He said that they continued on 6 and 8 August 2008 when he took photographs. By 8 August 2008 he said they had demolished the three walls and almost constructed the double-skinned walls to the first floor level. He referred to photographs which he said showed this progress. He said he was on site on 9 August 2008 but in the evening went to Johannesburg on the beginning of a long trip to South Africa and other countries. He said that up until 8 August 2008 there had been no discussion about the spine wall.

He said on 9 August 2008 he had phoned Mr Keeling because he could not reach Mr Chudley. He said he was not happy with the spine wall being able to hold the loads from the floor above. He said he asked Mr Keeling whether they should remove the spine wall and rebuild it with concrete blocks and pad stones. He said that Mr Keeling had agreed that it should be demolished and rebuilt but no price had been discussed. He said that when he returned from being abroad on 1 September 2008 he was given a cost of £1,600 for the cost of demolishing and rebuilding the spine wall which he agreed to. He was asked whether there was a conversation with Mr Chudley in which he agreed to Mr Chudley being paid cost plus 10%. He said that such a conversation had never happened.

In relation to the timing of the discovery of the clay-pot tile walls, I accept Mr Sear's evidence that he was told of this on 25 July 2008. I have seen the photographs which Mr Sear produced and it is evident that work started at the front of the house by building the three new front walls, with excavation for foundations by 6 July 2008. By 12 July 2008 foundations and walls were constructed at the front but no demolition had commenced; by 17 July 2008 demolition had started; by 21 July 2008 demolition had exposed some walls and by 28 July 2008 extensive demolition, except for the external and internal spine walls had taken place. These photographs support there being a discussion on 25 and 28 July 2008 and that work of demolition was carried out after that. By 6 August much of the demolition of the external walls had taken place. By 8 August 2008 the external walls, except for the spine wall, had been demolished and rebuilt to first floor level. By 30 August 2008 most of the blockwork had been rebuilt to second floor level.

On that basis, I find that the discussion between Mr Chudley and Mr Sear took place before the relevant demolition and rebuilding of the external walls. This would be consistent with Mr Sear's version of events and with a price being given for the total additional cost of the demolition and rebuilding before work commenced. I do not accept Mr Chudley's evidence that there was a conversation in early July 2008 and that the demolition was to be carried out on a cost plus 10% basis. The letter of 1 August 2008 and the invoice of 30 August 2008 seeking to charge for the demolition at cost plus 10% were, as I have found, only sent later on 20 November 2008 in an unsophisticated attempt to try to suggest that there had been no agreement in and after July 2008 and that those documents represented the correct position.

Three further matters support Mr Sear's version of events. First, the original Contract was made on the basis that a lump sum figure was agreed to cover all the work, subject to certain particular allowances for some items. An agreement for a similar lump sum to cover all the necessary work would be consistent with Mr Chudley having taken the same approach. Secondly, Mr Chudley sought to justify the figure of £40,000 on the basis that the new blockwork alone took 5 weeks and would cost £20,000 in terms of labour. In fact, as the photographs show the work of demolition and rebuilding of the blockwork together took about 5 weeks and this, on Mr Chudley's figures, would be consistent with some £20,000 for labour, making some £40,000 overall. Thirdly, from 15 September 2008 onwards I accept that Mr Sear attached the summary of payment sheets to the Confirmation of Payment documents which he and Mr Chudley signed. Those showed the figures of £38,400 and £1,600 as being added to the price in the Contract of £218,000 and are contemporary evidence consistent with the agreement which I consider was made.

As a result, I find that there was an agreement for all the necessary demolition and rebuilding of the three external walls for the additional total sum of £38,400, subsequently accepted by Mr Sear in place of the figure of £32,000 agreed on 28 July 2008. I also find that a figure of £1,600 for the necessary demolition and rebuilding of the spine wall was given by Mr Chudley to Mr Sear after 30 August 2008 and agreed by Mr Sear. There was no agreement that any work would be carried out at cost plus 10% nor was it agreed that an additional 10% would be added to the £38,400 and £1,600.

The figures agreed included all other necessary additional work, as did the Contract. That was the basis on which Mr Chudley provided the figure of £218,000 in the Contract and the same applied to the two new lump sums which he agreed. However, if the work was dealt with by an allowance in the Contract and if there was additional work, for example in terms of electrical switches under items 3, 4 and 5 of the Contract, so that the sum allowed in the Contract was exceeded then Mr Sear would have to pay more. Otherwise it included all the necessary electrical work, plasterwork/rendering, joinery and other work, as did the original Contract for the walls being demolished and rebuilt.

In the light of that finding I now turn to consider the various items which Mr Chudley contends are additional work.

Additional Work

Items 1A, 1B, 14 and 16: Additional work to new walls under the agreement

As a result of the findings set out above I have dealt with the claims for demolishing and rebuilding the walls, additional electrical works, plastering of the walls and other work to the rebuilt walls following demolition. The cost of doing that work was included in the figures of £38,400 and £1,600 agreed and this therefore did not represent additional work.

Items 2 and 11 First floor blockwork and increased size RSJs

It is convenient to consider these two items together. In his second witness statement Mr Chudley said that Mr Sear asked for the upstairs interior walls to be built of blockwork rather than studwork. He said he had priced for the studwork shown on the drawings but the drawings subsequently submitted for planning approval showed blockwork and this necessitated enlarging the RSJs. In his oral evidence he said that it was not his decision to replace the studwork with block work at the first floor level. He said that when Mr Sear was going away, probably for August and part of September 2008, he had said he would rather have internal walls block work than studwork. He said he wanted the upstairs in block work because of the insulation and noise reduction and this was what Mr Chudley had done. Mr Chudley also said that he had to increase the RSJs at the first floor to take these block walls. The RSJs therefore had to be twice the size of the original and they had to use a crane to put them in. He said that when the decision had been made to change to block work he did not have time for an engineer to make calculations so he just made the RSJs bigger. He said the RSJs could not be man-handled so they hired a crane for a day and used it to do all the RSJs.

Mr Sear in his supplemental witness statement said that the lightweight blockwork walls had been built when he returned from his overseas trip on 30 August 2008. He said the first he knew of it was when Mr Chudley informed him that he had forgotten to charge for this additional cost. In his oral evidence Mr Sear was asked whether he had said he wanted to change from studwork to blockwork walls at first floor level. He said that before he went away he did not have a discussion on 9 August with Mr Chudley but with Mr Keeling as to the spine wall when he was on his way to, or at the airport. He said that nothing had been discussed except for the spine wall and he did not request any change from studwork to block work but when he returned on 30 August 2008 he saw the blockwork had been carried out. He said that Mr Chudley had changed what was put in, possibly for his own convenience. He said that on 9 August 2008, when he had his conversation with Mr Keeling at the airport, he had already seen the RSJs being delivered. I have seen a photograph of 8 August 2008 showing the RSJs being man-handled which confirmed this.

I accept Mr Sear's evidence. It seems that the RSJs were being delivered on 8 August 2008 and there is no suggestion in any documents that they had been changed at that stage to support blockwork walls. Further, the timing of the conversation would have had to be before 8 August 2008 but at that stage the demolition and rebuilding of the spine wall was the last thing discussed and it seems highly unlikely that anything to do with first floor blockwork would have been discussed at that stage. It is also noted that this was not a matter raised by Mr Chudley until comparatively recently. I consider that it is probable that Mr Chudley decided to install the blockwork walls for his own reasons and has more recently seen this as a change. I do not accept that this was a change which was instructed by Mr Sear and therefore there is no basis for the blockwork walls or RSJs being additional work. There is no evidence to show that the RSJs were indeed increased.

Item 3: Stud work for a flat TV.

Mr Chudley said that although originally it had been said that this was in the master bedroom he accepted that it was in the living room/reception.

Mr Sear said that this related to studwork in the living room on the spine wall. He said there was studwork battening about 2 inches out from the spine wall and it was then to be covered with plasterboard. He referred to a photograph which showed the studwork. He said he accepted that more time would be needed to carry out the frame work and the plaster work.

This was additional work which was not shown on the drawings, described in the specifications or included in the Contract or the later agreement. Kingfisher Builders are entitled to payment for the work carried out.

Item 4: Three sliding door frames.

Mr Chudley said that sliding door frames had been provided at first floor level to each of the two bathrooms but he could not remember where the third one had been placed. He said that Mr Sear did not assist in installing them. Although Mr Sear supplied the metal frames and assembled them, the carpenter had done the installation.

Mr Sear referred to the brochure for this type of sliding door. He said he put the aluminium sliding door mechanisms together by himself and they were fitted in 45 minutes by himself and Mr Chudley. He said that Mr Chudley had only provided the timber framework. He said there were fewer than 20 screws and Mr Chudley did not do anything but assist him. He showed where on the plans the three sliding doors were located.

The sliding door frames were additional work which was not shown on the drawings, described in the specifications or included in the Contract or the later agreement. However, I accept that Mr Sear supplied and assembled the aluminium frames and assisted with the installation. Kingfisher Builders are entitled to payment for the studwork carried out in preparation for the installation of the sliding frames and for the labour cost in assisting in fitting them, in so far as that work was carried out.

Items 5 and 6: Moving the bathroom at second floor level and re-locating the soil and vent pipe, drainage and manhole for that bathroom.

In his oral evidence Mr Chudley explained that, at second floor level, the bathroom had been moved to the location of bedroom five. He said that at that stage hot and cold pipework and the waste to and from the bath had been installed in the bathroom. He said the waste was to be connected to an original soil pipe which was on the left hand side of the Property but had not yet been connected to it. He said that as a result of the change it was necessary to have a new soil pipe going through three floors and this had to be boxed in and insulated. The pipe then passed through the wall and into a manhole. He said that Mr Sear had obtained a corner bath for this bathroom which had to be boxed in because it had not been supplied with a side panel and the taps had to be chased into the wall.

Mr Sear in his oral evidence said the bathroom had been moved to bedroom six and not bedroom five, as Mr Chudley had said. He said nothing had been done in the bathroom when the position of it had been changed and no pipework had been installed. He said that under bedroom six there was the ensuite bathroom at first floor level and it was possible to use the same waste and hot and cold water pipes as for that bathroom. He said that Mr Chudley's description of the need to install a soil and vent pipe in a different location was wrong as the pipe was going to the ensuite bathroom below. He said that it was the ensuite below which required the additional manhole.

I accept Mr Sear's evidence that the bathroom was moved to bedroom six. He was much clearer in his description of the move whereas Mr Chudley evidently did not have a clear recollection. I am not satisfied that any work had been done in the existing bathroom when the change was made. To ascertain whether there was any additional work, or an omission, there would need to be a calculation of the cost of carrying out the work in the new bathroom location compared to the cost of carrying out the work in the old bathroom location but, on the evidence, I do not think there would be much difference, if any, in the work needed in the bathroom itself or the pipework or waste connections. An existing soil and vent pipe would have been used in the old location and the new soil and vent pipe to the ensuite bathroom would be used for the new location.

Item 7: Fibreglass insulation between ground floor and first floor and first floor and second floor.

In his oral evidence Mr Chudley accepted that the materials had been purchased by Mr Sear. He did not accept that it would take a maximum of two days to do to install. He said it took a week. He accepted that insulation in accordance with the Building Regulations was required in the roof and the eaves at second floor level but not elsewhere and it was therefore an extra in these locations.

Mr Sear's evidence was that he provided the rolls of fibreglass but the work was not complete when Mr Chudley left site.

The installation of the fibreglass insulation between the floors was additional work. Kingfisher Builders would therefore be entitled to additional payment for the cost of installing the fibreglass insulation which was supplied by Mr Sear.

Items 12 and 8: Increasing the area of the crown roof and constructing a Velux window in the crown roof.

Mr Chudley said that the crown roof, as built, was considerably larger than shown on the drawing and he needed additional materials, insulation felt and labour. He was referred to the drawings and said that the area of the crown roof was about a metre larger both ways than shown on the plans but he accepted he had built it according to the design. He was also taken to the drawings and accepted that the drawings did show a roof light in the crown roof.

Mr Sear said there was no reason to think there was any difference in the size of the crown roof as the design and the working drawings were not changed from those set out in the Contract. He pointed out that there was a roof light on the plans and it was a rooflight not a Velux window. He said he purchased the roof light on 3 December 2008 and it was delivered one week later after Kingfisher Builders had left site.

I have considered the drawings in this case and am not persuaded that the crown roof was increased in size from that shown on the drawings and certainly it was not by any instruction given by Mr Sear or any revised drawings. There is a rooflight in the crown roof shown on the drawings and it was not changed to a Velux. There was therefore no additional work under either of these items relating to the crown roof.

Items 9 and 21: Installing hanging tiles on the external faces of the Property and changing the roof tiles from clay to concrete.

Mr Chudley said that originally only the front gable was to have hanging tiles but that Mr Sear had seen a house with tile hanging and scallop tiles which he showed Mr Chudley and said he wanted those sort of tiles for the top half of the house all the way round. This meant, Mr Chudley said, that the scaffolding had to stay up for one month further. He stated that they shot-fired battens to the walls and then had to felt and batten and then hang some 28 to 32 courses of tiles. He was taken to the specification and the drawings which referred to clay tiles. He was referred to item 11 of the Contract which stated that the house was to have a complete new roof with new tiles. He said this was only for the sloping roof and there was no provision for hanging tiles vertically.

It was put to him that Mr Sear said that this was an agreed variation at no cost because there was a substitution of concrete tile for clay tiles. He said there was no agreed variation. If he had used cheap concrete tiles he could have done it within the price but the concrete tiles within the sloping roof were ornate. He said they completed the work with concrete tiles which looked like clay tiles and there was no difference in price because they were very expensive. He said that so far as the hanging tiles were concerned, they installed clay tiles. He said that Mr Sear picked out expensive French tiles and the corner tiles alone had cost £5 each.

In his evidence Mr Sear said there had been a discussion with Mr Chudley on or around the beginning of September 2008 when Mr Chudley had shown him two types of tile for the roof: a concrete tile and a clay tile. Mr Chudley had said that if Mr Sear was happy to change the roof tile to concrete tiles then Mr Chudley could include tile hanging to the other three elevations at no cost. Mr Chudley had said it would improve the house. Mr Sear said he agreed and as it was not going to cost anything it was sensible to do this. He referred to a drawing which stated "shaded areas represent clay-tiles to roof and to walls to closely match". He said he therefore agreed to downgrade the clay roof tiles to concrete tiles. He said they looked adequate and with the saving by downgrading the roof tiles he was able to have hanging tiles on the remaining elevations at no extra cost. Mr Sear said that the hanging tiles were off the shelf items and he had bought some from the local supplier About Roofing in Esher.

I accept that there was a conversation between Mr Chudley and Mr Sear about changing the roof tiles to clay tiles and, with the saving in cost, providing hanging tiles to all the elevations and not just the part of the front elevation shown on the drawings. It seems that, in retrospect, Mr Chudley was not able to make the savings he had hoped, although he has provided no evidence of the relative prices of the roof tiles. There was clearly a change in the omission of clay tiles on the roof and their substitution with concrete tiles and the addition of tile hanging to the faces of the house. However, I accept Mr Sear's evidence that there was an agreement that the change would be at no additional cost to Mr Sear and, as a result, Kingfisher Builders are not entitled to any additional payment for that change, nor would Mr Sear have been entitled to any reduction in price.

Item 19: Installing "scalloped" flashing under the windows.

Mr Chudley stated that originally the lead work below the windows was not scalloped but there was a band of scalloped tiles. He said that it took a long time to cut the lead work to the scalloped detail and he would expect it to take 2 days to do it. It was put to him that part of the deal was that this would be done at no extra cost as part of the hanging tiles. He said he did not agree, he did not propose the scalloping or give a price for it.

Mr Sear said that Mr Chudley had proposed scalloping this lead work below the windows and Mr Chudley's roofer had done it. It had taken some time but there was not a large amount. Mr Sear stated that the roofer made the template and then used steel cutters to cut the lead but Mr Chudley had not mentioned anything about the cost.

I consider that this was additional work which Mr Chudley had mentioned to Mr Sear and Mr Sear had agreed to have carried out. The fact that no price was agreed does not mean that no payment is to be made and I consider that Kingfisher Builders are entitled to extra payment for this work.

Item 10: Chasing pipework into walls.

Mr Chudley said that in all the bathrooms the hot and cold pipes had been chased into the walls and this had been done in three bathrooms. In addition all the radiator pipes which would have been automatically concealed in the stud work had to be placed in block-work which had to be chased out and this was harder work than placing them within the studwork.

Mr Sear was asked about the chasing of electrical cables, plumbing and central heating pipes into the walls. He referred to a photograph of a chase for some of the pipes in the walls which were then covered by dabs of plaster and plasterboard. He said the majority of the electrical cables were installed before the floorboards and ceilings and he could not think of a case where they would be chased into the walls. The steel boxes for the switches would be chased into the walls but not the cables.

I have found that there was no instruction by Mr Sear to carry out the upper floor walls in blockwork rather than studwork. It follows that the additional cost, if any, of the blockwork would be at Mr Chudley's cost and no additional payment can be claimed from Mr Sear. To the extent therefore that the cables and pipes had to be chased into those walls, rather than passing through the studwork, I do not consider that this is additional work for which Kingfisher Builders are entitled to payment. It was part of the work made necessary by their decision to change the walls from studwork to blockwork. I therefore find that Kingfisher Builders were not entitled to any additional payment for carrying out any chasing of cables or pipes.

Item 13: Concrete oversite and underfloor heating to the ground floor of the Property.

Mr Chudley said that there were two rectangles of wooden flooring within the concrete floor to the reception room and the dining room/kitchen. He said that originally, so far as under floor heating was concerned, he had intended to take up these patches of wooden flooring and notch the joists and place piping under the floor which would be connected to the central heating system, He marked on the plan where these rectangles of wooden floor were located. He referred to item 1 of the Contract which said "Under floor heating were (sic) possible on the ground floor, including downstairs cloakroom, all bathrooms and ensuites". He said that the area which was "possible" was the area of wooden floor within the existing reception rooms.

Instead, he said, they were instructed by Mr Sear to remove the whole area of concrete and wooden floors. As a result, he said they had to lay 100 to 150 mm hardcore after breaking out the existing floors and removing the debris by skip; they then had to blind the hard core with sand and vibrate it and then they had to lay the damp-proof membrane. He stated that they laid this three inches below the damp-proof course so that the under floor heating could be put in the whole of the two areas.

He was taken to the invoice for this work dated 30 September 2008 and said that they had carried out that work except for the screeding in the sum of £1,850 which had not been done. He said all of this was a complete variation. He was taken to the specification on the plans which stated at Item 27 as follows:

"27 Ground Floor

75mm screed on 100mm Jablite 'SD' grade insulation or similar to incorporate underfloor heating if required on 150mm insitu concrete slab. 1200 gauge polythene dpm laid over insulation and lapped with dpc on minimum of 150mm sand blinded compacted hardcore."