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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Hall & Anor v Van Der Heiden (No 2)  EWHC 586 (TCC) (23 March 2010)
Cite as:  EWHC 586 (TCC)
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| MS SELBY HALL
MR PHILIP SHIVERS
|- and -
| MR JAN VAN DER HEIDEN
The Defendant was neither present nor represented
Hearing Dates: 15th – 16th March 2010
Crown Copyright ©
Mr Justice Coulson:
2. THE CONTRACT
Section 2 Carrying out the Works.
a) Clause 2.1 set out the defendant's obligations in respect of the carrying out and completion of the works including, at clause 2.1.1, the obligation to complete the design using reasonable skill, care and diligence, and, at clause 2.2, the obligation to use materials and standards of workmanship to the reasonable satisfaction of the architect and/or to a standard appropriate to the contract documents.
b) Clause 2.8, dealing with extensions of time, provided:
"If it becomes apparent that the Works will not be completed by the Date for Completion stated in the Contract Particulars (or any later date fixed in accordance with provisions of this clause 2.8) for reasons beyond the control of the Contractor, including compliance with any instruction of the Architect/Contract Administrator under this Contract whose issue is not due to a default of the Contractor, then the Contractor shall thereupon in writing so notify the Architect/Contractor Administrator who shall make, in writing, such extension of time for completion as may be reasonable. Reasons within the control of the Contractor include any default of the Contractor or others employed or engaged by or under him for or in connection with the Works and of any supplier of goods or materials for the Works."
c) Clause 2.9 set out the provisions for liquidated damages. Clause 2.9.1 made plain that the relevant period during which such damages would accrue was between the contractual completion date (as extended) and the date of practical completion. Clause 2.9.2 made plain that the claimants were entitled to deduct liquidated damages from sums otherwise due to the defendant or to recover those damages from the defendant "as a debt".
Section 3 Control of the Works
d) Clause 3.4.1 permitted the architect to issue written instructions with which the defendant was obliged to comply forthwith. All instructions were to be confirmed in writing.
e) Clause 3.6 permitted the architect, without invalidating the contract, to issue instructions to vary the works.
Section 4 Payment
f) Clause 4.3 dealt with progress payments and provided as follows:
"The Architect/Contract Administrator shall, at intervals of four weeks, calculated from the Date for Commencement of the Works, certify progress payments of the percentage stated in the Contract Particulars of the total value of:
.1 The work properly executed, including any amounts either ascertained or agreed under clauses 3.6 and 3.7; and
.2 The materials and goods which have been reasonably and properly brought on site for the purpose of the Works and which are adequately protected against weather and other casualties.
less the total amounts due to the Contractor in certificates in progress payments previously issued. The certificate shall state to what the progress payment relates and the basis on which the amount of the progress payment has been calculated. The final date for payment by the Employer of the amount so certified shall be fourteen days from the date of issue from that certificate. The provision of clause 4.6 shall apply to any certificate issued under this clause 4.3."
g) Clause 4.7 permitted the contractor to suspend works in certain circumstances of non-payment. It was in these terms:
" Without affecting any other rights and remedies of the Contractor, if the Employer, subject to any notice issued pursuant to clause 4.6.2, fails to pay the Contractor in full by the final date as required by these Conditions and such failure continues for seven days after the Contractor has given to the Employer, with a copy to the Architect/Contractor Administrator, written notice of his intention to suspend performance of his obligations under this Contract and the ground or grounds on which it is intended to suspend performance, the Contractor may then suspend such performance until payment in full occurs."
Section 6 Termination
h) Clause 6.4 permitted the claimants to terminate the defendant's employment if the defendant was in default. It was in these terms:
".1 if, before practical completion of the Works, the Contractor:
.1. without reasonable cause wholly or substantially suspends the carrying out of the Works or the design of the Contractor's Designed Portion; or
.2 fails to proceed regularly or diligently with the Works or the design of the Contractor's Designed Portion; or
.3 fails to comply with clause 3.9,
the Architect/Contract Administrator may give to the Contractor a notice specifying the default or defaults (the 'specified default or defaults')
.2 If the Contractor continues a specified default for 7 days from receipt of the notice under clause 6.4.1, the Employer may on, or within 10 days from, expiry of that 7 day period by a further notice to the Contractor terminate the Contractor's employment under this Contract"
3. BRIEF CHRONOLOGY
"In the meantime, according to my calculations, the value of work completed to date equals £149,493.25 as opposed to your claim in valuation 8 that £170,043.30 worth of work has been completed. Since we have not yet reached Practical Completion, only 95% of this amount is currently payable. Selby and Phil tell me that they have paid you £156,065 to date. Therefore, if my calculations are correct, Selby and Phil are currently £14,046.41 in credit.
It is my understanding that as the project stands, the final cost of the project could be no more than £162,531, around £10,000 less than the amount you have mentioned. Selby and Phil are obviously very concerned that progress stopped despite the fact that they have, in good faith, paid in advance for certain items/works that are not in place or faulty- for example the stone counters and the hard wood flooring.
Regarding your request for an extension of time of 10 weeks beyond the official completion date Saturday 22nd September 2007, I have carefully reviewed both sides of the story and enclose your e-mail of 7th January stating your case, and a letter from Selby and Phil stating their case. I realise that the reason for this delay includes changes to the structural design at the beginning of the project as well as changes and omissions to the design. However, the delay has largely been caused by poor management and planning on your part, the lack of sufficient and skilled labour and recent declining standards that have required various items to be redone.
With the above in mind, I feel that it is fair to grant you an extension of time of 6 weeks. The amended official completion date is therefore Saturday 3rd November. Please note that I will need to see a breakdown of your costs before agreeing any further preliminaries-these are not currently included in the enclosed spread sheets. I understand that Selby and Phil will be looking for some sort of relief to cover their costs beyond this extension of time.
To summarise, I urge you to return to the site with a decent workforce as soon as possible to complete the remaining work of your usual high standards. I realise that we need to review how to remedy the squeaky floor, and am endeavouring to obtain a specialised report on this as soon as possible. However, there are many other remaining issues that can, and should, be completed by the end of next week. It would be a real pity at this late stage to have to determine your contract and appoint another contractor to complete the works. However we are being forced into having to consider this last resort."
"Lack of agreement on final account
Lack of agreement on your assessment of valuation
Lack of agreement-additional preliminaries
Lack of agreement-level of liquidated damages"
There was a meeting on site on 24th January to try and resolve the issues but it was unsuccessful. Subsequently, the defendant was repeatedly asked back to the property to carry out the incomplete and necessary remedial works but he refused.
4. WERE THE DEFENDANT'S WORKS DEFECTIVE?
"No. It was unsatisfactory. This does not appear to be seriously contested by the defendant. The flooring was not installed in accordance with published recommendations or with the manufacturer's installation instructions…. In particular the flooring was not a floating floor as intended but was nailed through to the existing construction."
5. WERE THE DEFENDANT'S WORKS INCOMPLETE?
6. WAS THE DEFENDANT IN CULPABLE DELAY?
6.1. The Factual Position
6.2 The Appropriate Extension of Time
6.4 Practical Completion
6.5 The Period of Culpable Delay
7. WAS THE CLAIMANT'S DETERMINATION JUSTIFIED?
7.1 The Relevant Letters
7.2 The Claimant's Case
7.3 Reasonable Cause
8. THE CLAIM FOR DEFECTIVE/INCOMPLETE WORKS
"The plaintiff who carries out either repair or reinstatement of his property must act reasonably. He can only recover as damages the cost which the defendant ought reasonably to have foreseen that he would incur and the defendant would not have foreseen unreasonable expenditure. Reasonable costs do not, however, mean the minimum amount which, with hindsight, it could be held would have sufficed. When the nature of the repairs is such that the plaintiff can only make them with the assistance of expert advice the defendant should have foreseen that he would take such advice and be influenced by it."
9. THE CLAIM FOR LIQUIDATED DAMAGES
9.1 The Claim
9.2 The Defendant's Response
9.3 Moving In
9.5 Variation to Contract
10. THE VALUE OF THE FINAL ACCOUNT
11. THE CLAIM FOR GENERAL DAMAGES