Jersey Unreported Judgments

Contract - application for summary judgment

[2023]JRC074

Royal Court

(Samedi)

10 May 2023

Before     :

Advocate David Michael Cadin, Master of the Royal Court.

 

Mr T Dunningham, Director for the Plaintiff.

Mr & Mrs S Gale in person.

judgment

the master:

Introduction

1.        The Plaintiff, TM Ruane Limited ("TMR"), is a building contractor.

2.        In August 2021, the Defendants, Mr and Mrs Gale, engaged TMR to carry out refurbishment works to a property known as the Old Pump House, Rue de la Vallee, Trinity for a contract price of some £260,000:

(i)        the contract was a standard JCT contract for a homeowner/occupier who has not appointed a consultant to oversee the work (the "Contract");

(ii)       the programme for works was for 26 weeks, starting 5 July 2001 and finishing in approximately the first week of January 2022;

(iii)      the works to be carried out (the "Contract Works") were identified in the Contract by refence to amongst other things, a quotation dated 22 June 2021, drawings and "Various meetings between Laila Gale and David Morris (on behalf of T M Ruane Ltd)";

(iv)      payment was to be made in respect of monthly valuations less a 5% retention; and

(v)       the Defendants were to continue to live in the premises throughout the period of the Contract Works.

3.        As the Contract Works progressed, the relationship between Mr and Mrs Gale and TMR broke down, albeit that monthly valuations 1 to 7 were paid by the Defendants.  Valuation 8 for £17,753.74 was issued by TMR on 21 July 2022.  It was not paid and TMR issued a summons in the Petty Debts Court on 22 August 2022 seeking payment.  Valuation 9 was issued on 19 August 2022 for £8,849.46.  Neither of these valuations has been paid.

4.        In September 2022, Mr and Mrs Gale terminated the Contract on the basis that they alleged TMR had breached clauses 8(a)(i) (the contractor is not at the premises regularly to carry out the work) and 8(a)(iii) (the contractor is so careless or incompetent that the work is of an unacceptable standard).  That purported termination was not accepted by TMR.

5.        The Petty Debts Court transferred the proceedings to the Royal Court and in November 2022, TMR issued an Order of Justice claiming some £72,000 in respect of Valuations 8 and 9, and other, previously-unbilled, works.

6.        Those proceedings were defended, and Mr and Mrs Gale counterclaimed against TMR for breach of the contract in a sum "not less than £86,700.67" on the grounds that "the works remain unfinished; [the Defendants'] home and possessions were damaged by the Plaintiff and their sub-contractors and [the Defendants'] health, well-being and finances were negatively impacted as a result."  That counterclaim is defended by TMR.

7.        Discovery has not yet been ordered, nor indeed, has the first directions hearing taken place.

8.        Mr and Mrs Gale, acting in person, have applied for summary judgment against TMR and seek the dismissal of the Plaintiff's claim and judgment on their counterclaim.  Mrs Gale has sworn an affidavit in support with 200, separate, exhibits, running to more than 800 pages.  In response, the Plaintiff has filed an affidavit from one of its directors, Mr Dunningham, with some 400 pages of exhibits.

Relevant Law

9.        Rule 7/1 is in the following terms:

"(1)     The Court may in any proceedings give summary judgment against a plaintiff or defendant on the whole of a claim or on a particular issue in any pleading if -

(a)     it considers that -

(i)      the plaintiff has no real prospect of succeeding on the claim or issue, or

(ii)      the defendant has no real prospect of successfully defending the claim or issue; and

(b)     there is no other compelling reason why the case or issue should be disposed of at a trial."

10.      The test to be applied for summary judgment is conveniently stated by McNeil JA in-¯Hard Rock Limited and Another v HRCKY Limited-¯[2018] JCA 152 at paragraph 18 (following the principles set out in MacFirbhisigh and Ching v CI Trustees and Others [2017] JRC 130A and in the English decision of Easyair Limited v Opal Telecom Limited [2009] EWHC 339 (Ch):

"(i)      The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91;

(ii)       A "realistic" claim is one that carries some degree of conviction.  This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];

(iii)      In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;

(iv)      This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court.  In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED &F Man Liquid Products v Patel at [10];

(v)       However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application of a summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;

(vi)      Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment.  Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Limited v Bolton Pharmaceutical Co 100 Limited [2007] FSR 63;

(vii)     On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.  The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be.  Similarly, if the applicant's case is bad in law, the sooner that is determined, the better.  If it is possible to show by evidence that although material in the form or documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success.  However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction..."

11.      The wording of Rule 7/1(1) follows that of the English CPR Part 24.2(a)(i), and it is appropriate for the Court to have regard to the principles applied in the English courts in this regard. The White Book notes at CPR Rule 24.2.6 that:

"A claimant may be prevented from obtaining summary judgment, in whole or in part, if the defendant can show that he intends to raise a set off or counterclaim which raises a triable issue, i.e. has some prospect of succeeding (AIS Pipework Ltd v Saxlund International Ltd [2017] EWHC 1523 (TCC))."

12.      As the authorities make clear, it is not appropriate for the Court to carry out a mini-trial of the Plaintiff's claim or the Defendants' counterclaim on an application by the Defendants for reverse summary judgment against the Plaintiff and for judgment on their counterclaim.  However, the Court must still enquire into the nature of the claim to consider whether the Plaintiff has a realistic (rather than a fanciful) prospect of succeeding on it, and as to the counterclaim to consider whether the Plaintiff has a realistic prospect of successfully defending it.  In so doing, I adopt the gloss placed on this by the Court in AIS Pipework Ltd v Saxlund International Ltd [2017] EWHC 1523 (TCC) that "unless the matters in issue are plain and obvious, the appropriate forum for determining such an issue is at trial, rather than at an interlocutory application for summary judgment". 

The Basis of the Application

13.      Mrs Gale's affidavit contains a detailed analysis of the Plaintiff's claim and her assertions of fact, supported by various documentary exhibits.  For the reasons set out in her affidavit, she avers that the Plaintiff's claim has no reasonable prospect of success.

14.      In relation to the Defendants' Counterclaim, Mrs Gale avers that:

"We have filed our answer to the plaintiff's claim and counterclaim and reviewed the plaintiff's answer to the same. Whilst the plaintiff has denied or not accepted some sections of our counterclaim, they have pleaded insufficient detail for us to establish what the basis of their defence would be."

15.      Mr Dunningham's affidavit contains a paragraph-by-paragraph response to Mrs Gale's affidavit, although it does not provide full particulars to support either TMR's claim or its defence to Mr and Mrs Gale's counterclaim.

16.      In their submissions to me, both Mrs Gale and Mr Dunningham focussed on matters of fact which served to highlight the differences between their respective positions.

17.      In addition, Mrs Gale drew attention to various inconsistencies between the Order of Justice and Mr Dunningham's affidavit, together with what she said was a total lack of evidence to support the claim or to provide any defence to the counterclaim.  She noted several admissions made by TMR, including in Mr Dunningham's Skeleton Argument where he stated that "We accept that the Defendants have a modest counterclaim to set against our claim."

18.      In response, Mr Dunningham submitted that it would not be appropriate to strike out TMR's claim or to give judgment on the counterclaim without considering the evidence, which will require the parties to go through discovery and to exchange witness statements.

The Contract

19.      The relevant clauses of the Contract provide that:

"D1.     The price for the work shown in the work details is £ 258,689.54 (including any VAT).

D4.      The price also includes the contractor's costs of dealing with any unexpected problems which he could have discovered by carrying out a careful inspection before the price was agreed.

D5.      If the customer changes the work details the price will be increased or reduced depending on the changes made. (See condition 4.).

E2.      The customer does not have to pay the remaining 5% of the total price until 14 days after: the contractor has put right all the faults that he is responsible for and that have been discovered within 12 months after the work was finished; and the customer has received the contractor's invoice for that amount.

F1.      The contractor will start the work no later than 05/07/2021 (see F4 below)...The work will be finished within 26 weeks from a start date to be agreed between the customer and the contractor.

F2.      The work is finished when the contractor has properly done everything shown in the work details and any changes made to them.

Condition 1:  Contractor's responsibilities

(c) Start and finish the work within the working period or any extension made to it.

Condition 4:  Changing the work details

Only the customer can change the work details, Changes will be dealt with as follows:

(a) If the changes increase the amount of work shown in the work details and the contractor agrees the changes, he will quote a price for the extra work and time involved. The customer will then decide whether to go ahead with the changes.

(b) If the changes reduce the amount of work shown in the work details the contractor will make an appropriate reduction in the price.

(c) If the changes alter the cost of any items in the work details without increasing or reducing the amount of work involved, an appropriate adjustment of the price will be made to reflect those changes.

Condition 8:  Bringing the contract to an end

As well as the customer's cancellation rights set out in condition 9 below, the following also apply:

(a) If the contractor: (i) is not at the premises regularly to carry out the work; or (ii) is not meeting his health and safety and environmental responsibilities; or (iii) is so incompetent or careless that the work is of an unacceptable standard; and does not correct the matter within 7 days of receiving a written warning from the customer, the customer can end this contract by giving the contractor written notice. The contract will end as soon as that notice is given.

(b) If the customer ends this contract, he will only have to pay any money due to the contractor when contract to an end the work has been finished by another contractor.

(c) If the customer: (i) does not pay an amount due, without having good reason; or (ii) prevents or obstructs the contractor from carrying out the work; and does not correct the matter within 7 days of receiving a written warning from the contractor, the contractor can end this contract by giving the customer written notice. The contract will end as soon as that notice is given.

(d) If the contractor ends this contract the customer will pay him, within 14 days of the contract ending, for work properly carried out, for any materials made specially for the work and for any other of the contractor's materials on the premises which he allows the customer to keep.

Condition 11 Other rights and remedies

(a) The customer and the contractor can claim from each other the costs and expenses which result from either of them failing to keep to this contract..."

The Plaintiff's Claim

20.      The Plaintiff's claim is in respect of:

(i)        Valuation 8 "less adjustment" of £800;

(ii)       Valuation 9 "less adjustment" of £589;

(iii)      The retention in respect of Valuations 1 to 9; and

(iv)      Additional works described as "Unbilled TMR Works", "Works carried out on a goodwill basis" and unbilled variations.

21.      Objectively, there are clear challenges if TMR is to succeed in its claim:

(i)        The Plaintiff's claim seems to fall squarely within the ambit of the claim permitted under Condition 8(d) of the Contract (i.e. "the customer will pay...for work properly carried out").  However, under the express terms of that Condition, such a claim can only be brought "if the contractor ends this contract".  There is no suggestion in the pleadings, the affidavits, or their exhibits that TMR has done so.

(ii)       In fact, the only pleaded allegation in relation to termination is that Mr and Mrs Gale terminated the contract.

(iii)      Condition 8(b) provides that "If the customer ends this contract he will only have to pay any money due to the contractor when contract to an end the work has been finished by another contractor."  Mrs Gale has averred in her affidavit that "the Works remain unfinished" and this is accepted by Mr Dunningham in his affidavit, albeit that he avers that "[t]he works are unfinished because the Defendants cancelled the contract without due cause..."

(iv)      Neither party has sought to imply any terms into the Contract.

(v)       Accordingly, if Mr and Mrs Gale terminated the Contract in accordance with its terms, Condition 8(b) would suggest that TMR cannot recover any monies unless and until the works have been completed by another contractor, no matter when that might be.  In submissions to me, Mr Dunningham accepted that this might be the case but submitted that it should not prevent the Court determining what will be due under the Contract once the Contract Works have been completed.

(vi)      The Contract is silent as to what should happen were Mr and Mrs Gale to have terminated the Contract without cause (as alleged by TMR).  This is not an issue that has been explored in pleadings.  The inference from the claim made by TMR in the Order of Justice may be that TMR believes it can treat the Contract as if it itself had given notice under Condition 8(c), albeit that the basis for such an assertion is unclear.

22.      Insofar as the termination of the Contract is concerned, Mr and Mrs Gale have provided some evidence to support their basis for terminating the Contract including a set of site minutes dated 12 May 2022, signed by a Mr McGranahan as a director of TMR recording that:

"IT WAS NOTED that TM Ruane had issued the JCT to the client, that the Inauguration: original program of 26 weeks had been superseded by 42% to the day with 6-8 weeks left to run. [Mr McGranahan] confirmed that the Company was in breach of contract and that the delays were not considered reasonable."

23.      TMR says about Mr McGranahan (its Managing Director at the time) and the meeting on 12 May that "[he] was not aware of the exact TMR Works..."  However, Mr Dunningham candidly stated in his affidavit that "[w]e accept that The Works and the TMR Works were delayed, we accept that the site was occasionally untidy, we accept that some works required snagging" albeit that TMR submit that Mr and Mrs Gale terminated the Contract without cause and dispute the factual basis for the alleged termination.

24.      As to the individual elements of the Plaintiff's claim, they too are not necessarily straightforward.

25.      Valuation 8 was issued by TMR on 21 July 2021 for £17,753.74.  The covering email from Mr Dunningham was in the following terms:

"I attach our latest valuation. I have been through our records and attempted to identify variations that we have not yet charged for.... In the first instance it would save time if you were able to tell me what variations you know of that we haven't yet charged for.

I also have some questions as follows: 

Wall and Ceiling Finishes There is 188m2 for walls and 82m2 for ceiling which seems to be only the 1st floor (we will check against plans) We have skim plastered the ground floor, so this doesn't seem (in common with most ground floor works) to be in the contract and so is a variation. Is this correct?

Fit and Attendances on Sanitaryware. I believe we supplied you with a plumber can you confirm what jobs on 2H he carried out in the toilets and bathrooms Compared to the amount I have claimed.

Internal Doors I believe there has been changes to the quantities here, I 've changed the quantities on 2H.  Please confirm if this is correct.

Other Possible variations..."

26.      The queries in this email seem somewhat at odds with Condition 4 of the Contract which requires the contractor to provide a quote for any variations which increase the overall cost.  This is an issue to which Mrs Gale drew attention both in her contemporaneous correspondence and her affidavit.   In response, Mr Dunningham avers that:

"We accept that the contract provided a process for variations.  When this case goes to trial, we will produce witness statements from a number of tradesmen who worked at The Old Pump House confirming that the Second Defendant gave verbal variation instructions on numerous occasions without requesting a quote."

27.      The Plaintiff's Order of Justice does not allege that there was any agreed amendment to the Contract to permit variations to the Contract Works without a quote; nor does it allege that there was any concluded agreement in relation to the variations allegedly carried out.  Indeed, quite the contrary:

"47.     The plaintiff has attempted on numerous occasions to engage with the client to discuss variations and agree on charges, but no response has been received.

48       Indeed the second defendant's argument has been that the contract is a fixed price and so the plaintiff should carry out works not included in the quoted works at no charge, but the second defendant will not accept any charge for works quoted for but not carried out.

49.      In order to quantify the variations on the TMR Works TD emailed the second defendant on 21 July 2022, 27 July 2022 and 9 order to agree them."

28.      In submissions to me, Mr Dunningham was unable to point to any document exhibited to either party's affidavit that showed TMR providing a quote for extra works that are subject to TMR's claim, and that quote being accepted by Mr and Mrs Gale.  He did however submit that there was an agreement between the parties as to the variations claimed and that in the event this claim proceeds to a trial, he will call numerous witnesses to support those variations.

29.      As part of their submissions, both parties addressed me as to the first of the alleged variations which concerns additional electrical works for £2,081.82:

(i)        Mr Dunningham's affidavit exhibits the invoice from the third party electrician to TMR which notes that some of the works charged "were not originally costed";

(ii)       he also exhibits a number of email exchanges between the parties;

(iii)      whilst the emails show clear engagement from Mr and Mrs Gale in relation to the electrical specification, they do not evidence in plain and obvious terms a concluded agreement between the parties that these electrical works were additional or that any additional cost is due and owing.

30.      TMR submits that the parties subsequently agreed a reduction of £800 in respect of Valuation 8:

(i)        the Answer and Counterclaim pleads that "the Plaintiff agreed there had been an £800 overvaluation however the Plaintiff also agreed to follow up on a number of other queries in relation to Valuation 8";

(ii)       TMR's Reply and Answer to Counterclaim pleads in response "Denied as will be evidenced by email exchanges";

(iii)      the email exchanges exhibited evidence Mr and Mrs Gale raising numerous queries about Valuation 8 (by email dated 23 August 2022) and TMR unilaterally reducing the valuation by £800 in relation to one query;

(iv)      none of the exchanges exhibited evidence an agreement being reached between the parties as to the amount of Valuation 8.

31.      Similar issues arise in relation to Valuation 9, albeit that in this case TMR accepts (paragraph 35 of its Reply and Answer to Counterclaim) that:

(i)        Mr and Mrs Gale raised a number of queries in relation to that valuation;

(ii)       Mr Dunningham responded the same day and accepted a £589 overvaluation;

(iii)      albeit that there were a number of other queries that were not resolved.

32.      Moreover, in relation to Valuations 8 and 9, Mr and Mrs Gale submit that when Valuation 9 was raised, the Contract Works had not finished, the property was barely habitable and did not have an internal staircase, yet TMR have apparently claimed over 98% of the total amount due to them under the Contract.

33.      In his submissions, Mr Dunningham was unable to explain how TMR could claim payment of the retention at this stage given that under the terms of clause E2 of the Contract, it is only payable "14 days after the contractor has put right all the faults that he is responsible for and that have been discovered within 12 months after the work was finished".

34.      Insofar as concerns TMR's claim for "Works carried out on a goodwill basis", these allegedly comprise works carried out by TMR, outside the Contract, in respect of which the parties allegedly agreed there would be no charge provided the Defendants did not make any claims against TMR.  They were included in TMR's Order of Justice.  Mr and Mrs Gale submit that these were works that were already included in the Contract, deny that there was any agreement for the works to be carried out free of charge "as long as the Defendants did not make any claims against the Plaintiff", and make the point that "[t]he Plaintiff initiated a claim against the Defendants which the Defendants have the right to defend."  All of these points are denied by TMR but the fact remains that there is no agreement signed by the parties in respect of these works.

35.      The final element of TMR's claim concerns "unbilled TMR Works" which are works allegedly falling with the Contract which had not previously been billed by TMR.  Mr and Mrs Gale deny that TMR is entitled to claim in respect of such works on the basis that:

(i)        the Contract Works have not finished yet TMR have apparently claimed 95% of the total amount due to them under the Contract;

(ii)       they themselves have carried out part of the works invoiced; and

(iii)      some of the works claimed have not been completed.

Mr and Mrs Gale's Counterclaim

36.       Mr and Mrs Gale's counterclaim is the other side of their defence to TMR's claim and goes to the root of why they terminated the Contract and the losses they allegedly incurred.  They allege that as a result of TMR's delays and defective workmanship, they have incurred:

(i)        costs of temporary accommodation;

(ii)       additional borrowing costs;

(iii)      costs of repairs to damage caused by TMR;

(iv)      costs required for other contractors to complete the Contract Works;

(v)       replacement materials; and

(vi)      third party costs.

37.      Mr and Mrs Gale also claim a sum for distress, inconvenience, and impact on health (which in the case of Mrs Gale, she says required her to take medication).

38.      As noted above, TMR accept that the Contract has not been completed, has been delayed, that the site was occasionally untidy and that some works required snagging.  However, they deny that they were in breach of Contract, or that Mr and Mrs Gale were justified in terminating the Contract.  It is also evident from their Answer to Counterclaim that there are a number of factual disputes between the parties as to what did, or did not, occur.  In terms of Mr and Mrs Gale's losses, TMR deny them and "put [the Defendants] to strict proof".

39.      In relation to the costs of temporary accommodation, Mrs Gale has provided evidence of the costs of alternative accommodation into which the family moved after the date when the Works should have been completed.  This claim is pleaded as being "as a result of having to vacate the property".  TMR denies that Mr and Mrs Gale had to vacate, asserting instead that "it was entirely their choice to vacate the property".

40.      Insofar as the additional borrowing costs are concerned, Mr Dunningham states in his affidavit that:

"126. We accept some responsibility for the excess interest paid by the Defendants to Hawk over what they would have paid on a bank mortgage. I asked the Second Defendant for this information on 26 Aug 2022 but received no response. We dispute the time period we are responsible depending on how much of the delay in refinancing the property is our responsibility."

41.      In relation to the costs of repairs to damage caused by TMR, Mrs Gale has itemised each element and exhibited the relevant invoices.  Mr Dunningham's affidavit does not descend to particulars but states that:

"127. We dispute all of these items as they all relate to issues where the parties dispute who is responsible and the court needs to examine the evidence. A strike out application is not the time to do this."

42.      Mrs Gale has also itemised each element of work that she asserts fell within the terms of the Contract and which she has had to, or will have to, pay someone else to complete and provided invoices.  Mr Dunningham's response is in relation to one element alone and once again, he fails to provide sufficient particulars:

"Contract works completed by others

130. As evidenced by exhibit 201 the guttering was a provisional sum and not charged to the Defendant.

Contract work remaining to be completed

131. This is entirely the Second Defendants fault as she terminated the contract without due cause, and the Defendants have not been charged for any works not carried out."

43.      Again, in relation to replacement material, Mrs Gale has itemised each element and provided an invoice where available.  Mr Dunningham's response is to the effect that these issues need to be addressed with evidence of the alleged defect, a determination as to who is responsible for the defect, and scrutiny of the costs claimed.

44.      Mrs Gale's evidence about third party support has not been addressed by Mr Dunningham.

45.      In terms of their claim for distress and inconvenience, Mr and Mrs Gale have claimed £2,500 per person "to take into account the impact on our health of living in extremely poor conditions for an extended period".  Mr Dunningham's response is that:

"the Second Defendants stress related illness on 16 Sept 2022 would have been avoided is she had not cancelled the contract without due cause, enabling us to complete and fully snag the TMR Works by that date."

Assessment

46.      As set out above, TMR's claim faces clear legal and evidential challenges albeit that Mr Dunningham is of the view that, save possibly in relation to his claim for the retention, they can be overcome by trial with the benefit of discovery and witness statements.

47.      Quite why TMR might need discovery from Mr and Mrs Gale to cure any legal and evidential issues with its own claim is unclear.  Insofar as TMR is claiming for works done, or variations to the Contract Works, TMR should itself have all of the relevant material to evidence what and was not included in the Contract, what was or was not a variation to those works and, to the extent that there is a consequent increase in price, it should be able to evidence compliance with the Contract or a separate agreement to vary.  All of that material should have been exhibited to Mr Dunningham's affidavit; it was not.  However, rather than discounting his evidence entirely (on the basis that it does not contain sufficient details or exhibit the documents necessary either to support the Plaintiff's claim in full or the Plaintiff's defence to the counterclaim), in my judgment some leeway must be afforded to TMR given that it is acting in person.

48.      In my view, applying the test set out above in Hard Rock Limited and Another v HRCKY Limited, it is possible that TMR's claim might succeed but on the basis of the evidence currently before me, it is improbable that it will.  However, taking into account the evidence reasonably expected to be available at trial (which will inevitably include the evidence that should have been adduced in affidavit form today), that assessment becomes far more unclear.

49.      Similarly in relation to Mr and Mrs Gale's counterclaim, it is possible that TMR's defence might succeed but on the basis of the evidence currently before me, it is most improbable that it will do so (particularly given the lack of substantive detail).  Whilst that assessment changes slightly when the evidence likely to be available at trial is factored in, given TMR's admissions about delay, mess, snagging and the validity of the counterclaim, it seems improbable that TMR will be able to defend the counterclaim in full.  Subject to TMR's claim, some monies are likely to be due to Mr and Mrs Gale under their counterclaim.

50.      However, quite what amount might be found to be due and owing to Mr and Mrs Gale under the counterclaim is far from plain and obvious.  I fully accept that Mr and Mrs Gale may have provided evidence to support each element of the quantum of their Counterclaim.  However, whether such an amount is actually due from TMR can only be determined once the Court has determined the extent and cause of the delays, the nature of the works done, any defects in relation to those works and the reasonableness or otherwise of the steps taken by Mr and Mrs Gale.

51.      Nevertheless, no matter how cogent Mr and Mrs Gale's counterclaim, in my judgment they cannot obtain summary judgment, in whole or in part on their counterclaim, if TMR has a realistic claim to be set off against it (AIS Pipework v Saxlund International Ltd.)

52.      There are real issues between the parties as to (a) the construction of the Contract (b) the extent of the Contract Works (c) whether there were any variations to the terms of the Contract (d) what variations, if any, were agreed in relation to the Contract Works (e) the extent of any breaches of the Contract; (f) the consequences of any breaches that might be established and (g) the impact of the purported termination.  The existence of these issues mean that it is far from plain and obvious where the relative merits of claim, and counterclaim, lie.

53.      None of these matters are appropriate for determination on an application for summary judgment, particularly one where (pre-discovery) the parties have filed some 1,200 pages of evidence to support their respective contentions, and there is still more evidence which I reasonably expect to be available at trial.  At this stage, I find that the Plaintiff's claim and the Defendant's counterclaim are both realistic.

54.      Further, in my view, the existence of such wide-ranging disputes between the parties provides a compelling reason (whether individually or collectively) for trial under RCR7/1(b).

55.      Accordingly, I decline the application.

Directions

56.      Notwithstanding the amount of material filed in this case, the issues between the parties have not necessarily been properly identified.  I am however conscious of the fact that both parties are acting in person, and it may not necessarily assist the Overriding Objective to require the parties to amend their existing pleadings with a view to achieving some notional level of perfection.

57.      Accordingly, pursuant to RCR 6/15 I direct that:

(i)        Insofar as TMR is claiming in relation to alleged variations (whether on a goodwill basis or otherwise), it should provide a detailed schedule setting out with such particularity as shall be relied upon at trial in relation to each and every sum claimed in paragraphs 36, 43 and 50 of the Order of Justice:

(a)       the nature and extent of the works allegedly carried out;

(b)       whether the works fall within the Contract Works;

(c)       the amount claimed for the works;

(d)       when, where and how the parties agreed that the said works should be carried out and:

(1)       insofar as the works are not within the Contract Works, whether the said variation accords with the provisions of the Contract;

(2)       if the said variation was recorded in writing, the Plaintiff should provide a copy;

(3)       if the said variation was agreed verbally, between whom and in in whose presence the said agreement was made;

(e)       when the said works were allegedly carried out; and

(f)        whether the said works are complete.

(ii)       Mr and Mrs Gale should answer that schedule (preferably in the same document) and identify whether they allege any defects in relation to the works allegedly carried out.

58.      Mr Dunningham has now provided a schedule setting out TMR's claim in relation to, amongst other things, Valuations 8 and 9 (exhibit 201 in the Case Center bundle).  Mr and Mrs Gale have not previously seen that document.  Whilst part of their defence to TMR's claim is that Valuations 8 and 9 overstate the amount of work done by TMR as a percentage of the whole project, it is unclear at this stage as to whether there are any specific issues with the works allegedly done or amounts claimed by TMR as part of these Valuations.

59.      Accordingly, pursuant to RCR 6/15, I direct Mr and Mrs Gale to provide, in relation to the individual items listed on page G860 of the Case Center bundle and Valuations 8 and 9 only, a detailed schedule setting out with such particularity as shall be relied upon at trial:

(i)        whether they agree the extent of the works allegedly carried out;

(ii)       whether the Works are complete;

(iii)      whether they allege any defects in relation to the works allegedly carried out; and

(iv)      whether they agree the amount claimed and if not, why not.

60.      Once that information has been exchanged, the parties should give discovery to one another in the light of the pleadings and the schedules.  I would respectfully refer the parties to the provisions of RC Practice Directions 17/07 and 17/08.

61.      Following discovery, the parties should exchange witness statements from all witnesses of fact to be relied upon at trial.

62.      It may be that the parties would wish to adduce expert evidence in support of their claim and counterclaim, and I will invite submissions on that issue when I hand down judgment.

63.      These directions will inevitably require the parties to incur significant time, and possibly cost.  I am conscious of the fact that the sums in issue are in the region of £80,000 in relation to both the claim and the counterclaim, and although large sums, may quickly be overshadowed by the time, effort and cost required to progress this litigation to a trial.  Accordingly, I propose to stay the proceedings for a period of 28 days pursuant to RCR 6/28 in order that the parties might engage in ADR.

64.      In terms of ADR, I note the contents of an email from TMR to Mrs Gale, exhibited by Mr Dunningham in which he states that "we continue to be prepared to enter into settlement negotiations on the same basis that we proposed previously i.e. that at the end of the negotiations you will owe TMR an unspecified amount of money."  For the reasons set out above, this is far from a given.  I would also remind the parties that a refusal to engage in ADR may be addressed by an adverse costs order (Café de Lecq Limited v R A Rossborough (Insurance Brokers) Limited-¯[2012] (2) JLR 155) and in my view, the use of unreasonable preconditions can amount to a refusal).

65.      I will hear submissions from the parties as to timing and sequencing of the above directions.

66.      In terms of costs, my provisional view, subject to any submissions that the parties might wish to make, is that the appropriate order is one of costs in the cause.  Although the Defendants have been unsuccessful in their application for summary judgment, the application has assisted the Court to give detailed case management directions at an early stage.

Authorities

Royal Court Rules 2004

Hard Rock Limited and Another v HRCKY Limited-¯[2018] JCA 152. 

MacFirbhisigh and Ching v CI Trustees and Others [2017] JRC 130A. 

Easyair Limited v Opal Telecom Limited [2009] EWHC 339 (Ch). 

AIS Pipework Ltd v Saxlund International Ltd [2017] EWHC 1523 (TCC). 

Café de Lecq Limited v R A Rossborough (Insurance Brokers) Limited-¯[2012] (2) JLR 155.