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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Plymouth South West Co-Operative Society Ltd. v ASM [2004] EWHC 2938 (TCC) (09 December 2004) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2004/2938.html Cite as: [2004] EWHC 2938 (TCC) |
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QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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PLYMOUTH SOUTH WEST CO-OPERATIVE SOCIETY LTD |
Claimant |
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- and - |
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ASM |
Defendant |
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MR JUSTIN MORT (instructed by Kennedys ) for the Defendant
Hearing dates : 9.12.04
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Crown Copyright ©
JUDGE COULSON :
(i) that the Defendants were entitled to believe that the Scott schedule, and in particular Appendix A attached to it, was a breakdown of the reasonable cost figure of £6.7 million;
(ii) the Defendants were entitled to be concerned when Mr Jervis, the Claimant's QS expert, set out in sections 10 and particularly 11 of his report, (with the detail at Appendix K), an entirely different breakdown of the £6.7 million figure;
(iii) the Defendants (and, from the tone of the judgment, the Judge himself) were entitled to be surprised to be told, during the course of the argument on 7th May, that actually the Scott Schedule did not, and did not try to, set out any information as to the £6.7 million reasonable cost figure and that indeed the only breakdown for that £6.7 million reasonable cost figure was to be found in Appendix K of Mr Jervis' report.
"I have to say that the present status of the action is not at all satisfactory. It does seem to me plain, from the terms of the order, that his Honour Judge Bowsher QC., made on 28th March 2003, that what he desired and intended was that the Claimant set out in the Scott Schedule not only details of alleged breaches but also a detailed case as to damages as a result of the breaches.
In my judgment it was both necessary and appropriate for the Claimant to have set out in the Scott Schedule the sort of material and detail that is now to be found in section 11 and Appendix K.
In my judgment Justin Mort correctly characterises that Order made by his Honour Judge Bowsher Q.C., as providing the Claimant with a second opportunity to set forth its case in respect of damages.
I accept the submissions of Justin Mort that the Scott Schedule in the form that I have referred can only reasonably have been intended and understood by the Defendants as doing that. I accept that Appendix A was understood as intended, and could have only reasonably have been understood as intended, to set out the Claimant's case as to why the outturn costs should have been £6.7 million.
It is correct that Appendix A has the title which I have quoted previously and that the only understanding of Appendix A is that analysis. John Virgo states that it was an analysis of the kind of cost estimate the Defendant should have undertaken before advising the Claimant on the likely cost of the works. As I now understand it, that exercise – [and that means Appendix A to the Scott schedule] – was completely without purpose unless it was originally undertaken to be the Claimant's case on damage. The whole thing therefore appears to have been a complete waste of time.
In reality Mr Jervis, when coming to prepare his expert report, must have recognised the force in the answers prepared by the Defendant to Appendix A. He must therefore have sought to justify his figure of £6.7 million in a completely different way as dealt with at section 11 and Appendix K."
"Notwithstanding the submissions of Justin Mort, which is certainly supported by the past history of the litigation, it does seem that it would not be just to the Claimant to deny them any opportunity to rely, whatever benefit it may do them, on Appendix K and section 11 of Mr Jervis' report. At the same time justice would only be done to the Defendant by giving it the opportunity to first raise questions on the underlying assumptions used in section 11 and Appendix K."
"40. Please provide details of any calculation that you used as at the time of preparing your report dated 29th March 2004 in order to reach the figure of £60,000, including but without prejudice to the generality of this question:
i) any assessment of the quantity of work involved, (including any assessment of the works omitted from this item in the course of the scope reduction);
ii) any assessment as to rates appropriate to such work;
iii) any rounding up or down;
iv) any assessment of cost to take into [account] the conditions in which the work was to be executed."
Then underneath, in brackets, the questions went on:
"(For the avoidance of doubt, if in fact the figure of 60,000 is not based upon any calculation as such but is an essentially arbitrary assessment, then please say so. You are not being asked now to justify the figure of 60,000 retrospectively, only to clarify what if any justification you had at the time that you had prepared the report and to provide particulars of such justification available at that stage.)
"41. Please provide copies of any record made of such calculation used for this item in the preparation of Appendix K of your report.
"42. If you did carry out a calculation but have not made or retained any written record of the calculation, please say so.
"43. Please provide like clarification as has been requested in relation to paragraph (2)"
That last question was in relation to all the items on pages 237 to 240 of Appendix K.
Request 46 was slightly different because that related to the deduction of 150,000. It asked:
"Please provide details of any calculation that you used as at the time of preparing your report dated the 29th March 2004 in order to reach the figure of 150,000. (For the avoidance of doubt, if in fact the figure of 150,000 is not based upon any calculation as such, but is an essentially arbitrary assessment, then please say so).
"47. Please indicate what, if any, contribution to the total figure of 150,000 was made by each of the elements listed, namely disruption, lack of design, design development and increased phases."
"The item as described by me as "assessed value" because it is based upon allowances made in the contract documents and/or costs incurred by PSW in similar works during the Derry's Cross Project. As I explained throughout my report, there are very few, if any, details in the documents of this work and therefore it has not been possible to quantify or cost the works precisely. This is, therefore, my best assessed estimate, bearing in mind the problems I have just stated. It does seem strange to me, given this complete lack of an audit trail, that ASM were themselves able to agree any figures with EBC because there appears to be no record of how, or why, ASM decided these figures to be correct."
"In summary, although I have demonstrated that a number of the rates in the Jervis estimate are low, they do not add up to a significant total, particularly when offset by the overpriced riblath and the final unspecified 2.5 per cent to finishings. The difference between Mr Jervis' estimate and the final account cannot therefore be explained by underpricing of the individual rates."
A similar point arises at paragraph 4.26 where Mr Symonds says:
"Having commented in detail upon the figures, they do not explain the difference between Mr Jervis' figures and the final cost borne by Plymco. I shall deal with this issue in the next section of my report."
Then when he deals with that issue at paragraph 5 and in particular 5.1, he concludes that:
"The measurements for the balance of the areas outside the Argos area do not affect the figures with any significance. The pricing and assumptions of the balance of the work, though I find much to comment upon, again will not of themselves explain why the project cost what it did. All of these minor adjustments are insignificant when considered against the items that have been omitted from Mr Jervis' figures."
"As an entirely separate exercise, in February 2004 I carried out an exercise to hypothetically cost the scheme as built to arrive at a value for what it would have cost if different advice had been given by ASM and acted upon by PSW. This exercise is recorded in Appendix K."
"The constituent parts of Appendix K were, I believe, explained in considerable detail in my 240 page report of the 20th March 2004 and in my replies to the written questions. In terms of the figures, they appear at Appendix K. They are a mixture of either figures that reflect actual cost incurred by EBC. Where that information is available, it has been extracted and assessed by myself as to its reasonableness. Where reasonable, they have been used in Appendix K. Where that information is not available, I set out my assessments of what that cost ought to have been by reference to quantities, as far as I know them, and rates that either did apply, because I know that from the documents, or alternatively reasonable rates, for example Spon's rates. In other words, all my assessed figures are the product of an appraisal by me as to the reasonableness of the known outturn cost of the bill of quantity cost."
"I do not want his evidence to change again. This really is the last chance saloon."
The orders that I make in consequence of this application are:
1) That the Claimant is to provide draft amendments to its pleadings by 4.30 p.m. on 17th December, which amendments are to
a) ensure that the pleaded case is entirely consistent with its expert's report, and
b) ensure that there is a pleaded breakdown of the notional reasonable cost of 6.7 million odd, with as much information, in relation to that breakdown, as possible.
I will then, when the matter comes back before me – and I will give a date in a moment – have to consider whether, if there is more information in that proposed amendment than is presently the case, whether or not, in the round, it would be right to allow that material in or, given any further information with which I am provided, rule that it would be unjust to the Defendants to allow that material in.
2) I order that the quantity surveying experts are to produce a Part 35 note of the matters on which they agree and the matters on which they disagree by 4.30 p.m. on 23rd December this year, with particular reference to, but not being limited to, those items which are the subject of this application.
3) As far as this application is concerned, it will be adjourned so that it can be dealt with together with any application that the Claimant is making, and the PTR matters, on Friday 7th January 2005 at 10.30 and I will allow all day.
I have already discussed with my clerk that, in order to avoid the sorts of disputes that I saw arose in relation to Judge Seymour Q.C.'s Judgment, that we will have my Judgment transcribed by the court and provided to the parties.
MR MORT: My Lord, that is extremely helpful, I am sure. On the basis that the application is adjourned, I assume that completes the business of today?
JUDGE COULSON: Well, unless there is anything else which is urgent. I am not, as it were, rushing away. But I would prefer to deal with the bulk of the PTR matters once we know where we are, both in terms of your application and if the Claimants are making an application, theirs as well. But if there are any matters that we can sort out quickly now, then I am happy to deal with those.
MR MORT: My Lord, just two things occur to our side. Firstly, I am not making an application for an Order now but obviously your Lordship will appreciate, I suggest, that our concern at this stage is that the material that is provided between now and the dates indicated by your Lordship, there will be some sort of finality to it. That is because obviously the professional concern we have is some further movement or further particularisation or some material emerging in the course of cross-examination or "without prejudice" meetings between experts and so on.
JUDGE COULSON: Yes.
MR MORT: Whatever the Claimant comes up with, I am sure, on the basis of your Lordship's judgment, that we will be able to come to some sort of conclusion but it has to be the end of the matter.
JUDGE COULSON: Yes. Well, without prejudging whether or not, if there is further material, it is permissible – because that would be the subject of any future dispute and I do not rule out or in ??
MR MORT: Quite so.
JUDGE COULSON: ?? that will be a matter for you to decide. I think it follows, Mr Virgo, from what I have said, that I envisage that we may be beyond the Last Chance Saloon, we may not be; I do not know; it is going to depend on the various matters to which I have referred. But I think I can say, and I am happy for it to be recorded, that I can envisage no circumstances in which anything beyond 17th December could possibly be permissible.
MR VIRGO: My Lord, understood.
MR MORT: The second point I was just going to raise is that we have an additional application that has been referred to, for a direction for supplementary witness evidence on the part of Mrs Digby Gibbs ??
JUDGE COULSON: Yes.
MR MORT: That Claimant's proposed directions allow for that but they have also some further evidence of their own.
JUDGE COULSON: Yes.
MR MORT: That consists of a supplementary statement from an existing witness, which we have not seen, and a statement from a witness who we were told by the Claimant was not available to take part in these proceedings. What I can say is for that application to be considered, we need to see what this evidence is.
JUDGE COULSON: Well, with respect, perhaps more importantly, I do too, because I cannot allow a party to rely on evidence that is not yet in a document that I can physically see.
MR MORT: My Lord, most appropriately perhaps maybe that it can be dealt with by consent.
JUDGE COULSON: Yes, quite.
MR MORT: Between all the three of us.
JUDGE COULSON: Quite.
MR MORT: I would urge the Claimants to produce that evidence in sufficient time that when we appear before your Lordship, taking into account the Christmas holiday, and so on, that we have all had a look at that and can form a view on that.
JUDGE COULSON: Yes. I think it is probably not appropriate for me to make a formal order but again I would say, in terms, that I would have thought that to the extent that any application was being made for further evidence – and this goes for both sides – that such documents, or such statements or whatever, which are going to be relied on in support of that application, should be provided this side of Christmas.
MR MORT: I am grateful, my Lord. That is extremely helpful.
JUDGE COULSON: That would be, effectively, the 23rd.
MR MORT: My Lord, in those circumstances, that involves the issue of costs being adjourned to the hearing date that has been identified.
JUDGE COULSON: Yes. The question of costs, it must follow, will be adjourned to await the outcome of that application. However, I think it is unlikely I shall reserve the costs. I shall deal with the costs of this application once we have had the hearing of the adjourned part of it.
MR MORT: Well, so far as I am aware, that is all that we can bring up today, my client is concerned, that is sensible that we can bring up to date.
JUDGE COULSON: Right. Mr Virgo, is there anything else?
MR VIRGO: No, my Lord.
JUDGE COULSON: Then in those circumstances, I hope that is clear as to what I expect. Beyond the experts' meetings and notice and so on, I have not made any other orders in relation to the experts but what the parties choose to do in relation to that, for the material for the 7th January, is a matter for them. Then any further orders, like supplementary reports or whatever, if that is appropriate, can be dealt with once we know what happens to the application.
MR MORT: Quite so, my Lord.
JUDGE COULSON: Thank you both very much.