BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT(QBD)
Strand, London, WC2A 2LL
B e f o r e :
| DACY BUILDING SERVICES LIMITED
|- and -
|IDM PROPERTIES LLP
Mr Samuel Townend (instructed by Stepien Lake) for the Defendant
Crown Copyright ©
Mr Justice Fraser:
"…..the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."
" In addition to the points that I noted in the Gestmin case, two other findings of psychological research seem to me of assistance in the present case. First, numerous experiments have shown that, when new information is encoded which is related to the self, subsequent memory for that information is improved compared with the encoding of other information. Second, there is a powerful tendency for people to remember past events concerning themselves in a self-enhancing light."
"…..I remember you asking for help and support saying/promising that the money won't be a problem, they will be paid on time….now when we are approaching the end and everything is near enough done we have started to play games, games that are affecting companies corporation, people's lives. You are concerned and upset about a letter???....Guess what…I'm upset that I can't pay my men, my duties as a company…brought on site materials that YOU again stated that they will be paid for, now you are trying to get me to wright an email to say that is no contract….Just trying to reiterate the fact that we have worked in good faith, we have worked day and night, weekends, Christmas period just to get the job done and this is the reward, played like a ping pong ball between IDM and HOC. Last but not least I met you mid December at Camberwell New Road together with Brian, and prior to any work, I have asked the question as in Who was I going to work for and who is going to pay me and YOU looked me in the eye and said that I AM WORKING FOR YOU AS IDM AND YOU AS IDM WILL PAY ME AND BRIAN FROM HOC WILL MANAGE THE SITE FOR YOU. IDM did pay me in full for 3 applications…."
(emphasis present in the original, and text uncorrected)
"Keran, My understanding is that there is a final account to be discussed with you which HOC need to be involved in. IDM were only ever funding HOC. That as far as it went. HOC employ you and do need to deal with your account. We are not playing games. We have been trying to get HOC to get themselves sorted to bring this forward for weeks and they are just not doing anything."
"15. I met Mr Keran on site at around 10 am when I was with Mr McLoughlin outside the entrance to the site and Mr McLoughlin suggested the three of us met at the nearby bus station. No one else was present at the meeting. I agree with Mr Keran's accounts of that meeting including the fact Mr McLoughlin gave his business card to Mr Keran and no mention was made of any other IDM entity.
16. This meeting was not as Mr McLoughlin subsequently claimed just a meet and greet. Mr McLoughlin had an urgent need for labour to progress the works with immediate effect and was specifically aware [Dacy's] labour was already on site."
Mr Cutmore strongly refuted the suggestion that someone else had written paragraph 15 of his witness statement for him.
"33. I firmly believe IDM are trying to take unfair advantage of [Dacy] here and not honour the oral agreement made by Mr McLoughlin with Mr Keran in my presence on 3 December 2015."
I find Mr Cutmore to be an accurate and truthful witness. Also, he is not an employee or director of either Dacy or IDM Properties. He facilitated and was responsible for organising the meeting on 3 December 2015, but had only met Mr Keran in August 2015. He is not a personal friend of Mr Keran (although that was suggested in the adjudication, it was not pursued seriously in cross-examination before me). Mr Cutmore struck me as someone who felt a moral obligation, given that he was there at the meeting of 3 December 2015, to see the right thing done. He has no personal interest in the outcome of this litigation.
Thanks for your time today and we now understand what are the procedures for that job management instructions timesheets will be done by HOC
we will be invoicing HOC and once HOC are happy with the invoices and also with the works performed on site then they will send the invoice to IDM
IDM will pay Dacy on a monthly basis"
In my judgment, this is not consistent with Dacy being HOC's sub-contractor. I find that this arrangement was consistent with Mr Keran's evidence and is consistent with Dacy contracting directly with IDM Properties, with its applications for payment to be first approved by HOC so far as works, labour and materials are concerned.
"In relation to these guys and the like. We (1) need to understand the procedures IDM intend to follow contract wise and the paperwork required to appoint such to act on this "contract" under the "direction" of HOC whilst effectively being under our control and getting paid by us…..
We have been assured by Brian C that these guys Dacy Building Services are the best and can be trusted whilst allegedly being a wee bit more expensive than the average. Can you cast your eye over those rates and give me your view….."
There would have been no need or reason for Mr Beacham, or anyone at IDM Properties, to look at or have any view on the rates that Dacy proposed to charge if Dacy had been contracting with HOC. There would, however, on the other hand, be every reason for this if Dacy had contracted with IDM Properties. This again is consistent with the case brought by Dacy and inconsistent with the defence to that case by IDM Properties.
"I have set this out in some detail because it demonstrates that there was little or no consistency in the issuing of instructions. Mr Hewson appears to be acting on behalf of IDM Construction London but by e-mails that state they are communications from IDM Properties. On some occasions he states that he is acting for and on behalf of HOC."
Mr Hewson did not give evidence before me. However, the above makes good a factor which is obvious when one considers all the documents, in particular when considering almost everyone on this Project with the exception of Mr Keran, Mr Cutmore and Mr Appleton. It is very difficult to ascertain at any particular point, or regarding any particular communication, exactly for which legal entity someone with an IDM e mail address was acting at any particular time generally. However, for the avoidance of doubt I make it clear that I find as a fact that at the meeting of 3 December 2015 Mr McLoughlin was undoubtedly acting for IDM Properties.
"I have noted that, although the test of whether an offer was made and intended to be legally binding is objective, in a case such as this where the relevant statements were oral, evidence of how they were understood by the parties themselves is admissible. That logic applies equally to the subjective understanding of other people who witnessed or took part in a conversation. It is therefore telling that all three of the ESIB representatives – Mr Tracey, Mr McEvoy and Mr Clifton – perceived the conversation about incentivising Mr Blue as no more than banter."
"27. Finally … there is a wider point for consideration here which, although it has been the subject of some commentary, has not been the subject of any previous judicial observation. The point concerns the statutory amendments in respect of written contracts. Before the amendments to the 1996 Act, adjudication could only happen when there was a contract in writing. That was so as to ensure that the adjudicator did not have to deal with complex questions as to contract formation, appropriate terms and the like, in addition to addressing the underlying claims, all in 28 days. Of course, that certainty has now gone, and the adjudicator may have to do all those things within the 28 day period.
28. This case is, I think, a good example of the change. In my view, this would not have been a dispute that could have been referred to adjudication under the old law. However, following the change in the law, it was validly referred to [the adjudicator] for decision in Adjudication 1. Thus, [the adjudicator] had to deal with all of the issues (both contractual and financial) within the limited timetable allowed by adjudication. In my view, in such cases, the courts are going to have to give adjudicators some latitude as they grapple with these difficulties. In an ordinary case, and depending on the words of the notice, it may be unduly restrictive to conclude that an adjudicator could decide what the contract was not, but not what the contract was. Similarly, it may be unduly restrictive to say that any notice of adjudication which raised the existence of the contract and/or its precise terms (on the one hand), and the financial claims thereunder (on the other), somehow involved more than one dispute."