Jersey Unreported Judgments

"10(ii)At paragraph 13.4 the Arbitrator states that finance charges had been actually incurred by the Claimant and as such were a cost which the Claimant was entitled to recover;

iii)At paragraphs 13.6 and 13.7 of his Award the Arbitrator correctly declares that he was satisfied that none of the parties present at the meeting in October 1990 pursuant to which Certificate No.14 was issued, left that meeting believing that all outstanding matters had been dealt with.

iv)At paragraph 13.8 of his Award the Arbitrator correctly sets out the law pursuant to which the Claimant was entitled to be paid the finance costs incurred by it as a consequence of the additional works and services provided by the Claimant.

v)At paragraph 13.12 of his Award the Arbitrator in flat contradiction to his findings in paragraph 13.4, 13.6, 13.7, and 13.8 of his Award, holds that the finance charges must have been included in Certificate No. 14.

"The Respondent contends that the sum of £90,000 agreed in October 1990 did include professional fees and site and head office overheads and asserts that the sum of £90,000 was made up of:-

1. Outstanding measure£14,000.00
2. Additional cost of compressed air blowers£12,000.00
3. Double use of air lock£1,750.00
4. Claims arising out of delays out of to shaft

‘C’ construction including overheads and

profit£43,000.00

1. Overheads and profit £13,750.00
1. Professional fees£5,000.00."

"13.4.If the Claimant during the currency of the contract, was operating on a bank overdraft borrowing, then clearly the charges levied by the bank for providing such a facility form part of the Claimant’s costs, and should be included in the assessment of any recoverable costs. I am satisfied on the basis of the statement from the Company Secretary of the Claimant dated 22 April 1996, which the Respondent has not sought to challenge, that all the relevant times the Claimant did trade on a bank overdraft borrowing.

13.5.I have studied the evidence of Mr Cole (Chairman of the Claimant company), Mr Allen (adviser to the Claimant company) and Mr Hickmott (Principal Engineer employed by the Respondent) and the uncontested evidence of Mr Bennie (Principal Engineer employed by the Respondent) all of whom were present at the meeting in October 1990. According to Messrs Cole and Allen the meeting was on the 1 October1990. According to Messrs Hickmott and Bennieit was on 5 October. The weight of evidence including Mr Hickmotts note (Doc.271] suggests that 1 October is the correct date. The precise date is unimportant but the differences in the testimony of these witnesses are indicative of the inaccuracy of recollection after a lapse of over five years.

13.6.Bearing this in mind I am satisfied that the position at the end of that meeting was that Mr Hickmott was uncertain as to whether any and if so how much, interest might be contractually due to the Claimant in addition to the agreed figure of £90,000. Mr Cole undertook to provide substantiation for the Claimants view that "financing/interest charges" were recoverable. I am not persuaded that any of those at the meeting drew a clear distinction between interest payable on money due simply because the money was due and financing charges actually incurred as a result of using credit facilities provided by a creditor’s bank.

13.7.I am, however, satisfied that no-one at that meeting left it believing that all outstanding matters had been dealt with, or that there was no possibility of further money being payable to the Claimant. I am also satisfied that the sum of £90,000.00 agreed in October 1990 did include professional fees and site and head office overheads and profit.

13.8.Having concluded in paragraph 13.3 above, that the Claimant has no contractual right to interest the only other basis on which the Claimant can establish an entitlement to further payment is that the financing charges which it incurred are an element of the costs recoverable either to overcome unforeseen physical conditions under clause 12 of the Conditions or to execute variations ordered by the Engineer and falling to be valued under clause 52 of the Conditions.

13.9.So far as clause 12 is relevant sub-clauses (2) and (3) states:-

13.10.Subclause 12(5), so far as it is relevant, states that:-

13.11.There is no evidence that these procedures were followed, and in particular there is no evidence that the Claimant submitted quotations or estimates or the Engineer required the Contractor to render weekly returns of costs. Each valuation submitted by the Claimant and exhibited in this Arbitration as documents 399 to 751 includes a sheet or sheets headed "Summary of Claims and Additions" The last of these (Docs 732-736] includes 49 items with a total value of £109,673.83. This figure has been altered to £43,252.15, and this latter figure included in Engineers Certificate No.12. The alteration was effected, I understand, by or on behalf of, the Engineer. Of the 49 items those numbered 8, 14, 17, 21, 28, 36, 38 refer to record sheets and the amounts claimed have not been altered; those numbered 27 and 29 have had the amounts claimed increased. A similar process has been applied to all the other similar documents. It follows that there must have been some substantiation of some, if not all, of the sums claimed. There is, however, no evidence of any separate identification of finance charges and I can only conclude that these were inherent in the figures originally entered in the summaries of claims and additions submitted with the monthly valuations by the Claimant.

13.12.In October 1990 the Claimant accepted that the agreed sum of £90,000 was in respect of matters listed in paragraph 12.3 above. These were all matters included in the summaries of claims and additions and it follows that the agreed sums must have included any relevant finance charges which were inherent in the amount included in those summaries. And I so hold."