"As agreed in line with College regulations, we have formally engaged with you for the project management and delivery of the Betteshanger Sustainable Park Centre. In line with our tender estimates, you have undertaken to ensure that the combined budget of the project does not exceed£6.6m (inclusive of all relevant costs and associated expenditure). The College retains control (Inaudible) key budgets as we previously agreed. This ensures that the project costs are globally not exceeded and the risk is mitigated to us as the client."
"Our client's position is that the date of the purported JCT Contract (19 August 2017 ) is false and that the document purporting to be the JCT contract on which your client is seeking to base its claim against [the Company] was in fact created by your client in May 2019."
"……After due consideration I have decided to reject your alleged whole claim for the following reasons. On the evidence presented I do not consider that Marpaul….is able to establish with sufficient merit that it has entered into a JCT contract with the Company. In addition, I'm not persuaded on the evidence submitted that [Marpaul] and the Company can be said to be bound by any contract of any kind………for the provision of goods or services. On that basis I do not consider that [Marpaul] would be successful in the claim against the company for any of the unpaid invoices given that it is not, in my opinion, any evidence with sufficient merit to support [Marpaul's] assertion that it contracted with the Company, whether pursuant to a JCT contract or otherwise. Therefore, [Marpaul] would not be able to sustain its claim because it would fail to establish any contractual nexus/ relationship with the Company. As such, the invoices presented (none of which are addressed to the Company) cannot be said to be due and [Marpaul's] claim would therefore fail."
"[Marpaul's] quantum claim as put forward in Mr Clark's fifth witness statement is entirely new. Prior to that statement [Marpaul] relied solely upon a relatively small number of invoices. The invoices that [Marpaul] provided are exhibited to Mr Newman's first witness statement dated9 April 2021 ….. Those invoices were not satisfactory and did not set out any adequate information regarding the works in respect of which sums were claimed. By way of example, the invoice……dated23 May 2017 …includes a single line item (“Standing charge for March 2017”) in the total sum of£249,156.00 (inclusive of VAT). No information or substantiation of that sum is provided. The liquidators have, since the outset of these proceedings, raised the issue that the information provided in [Marpaul's] invoices is insufficient. The first witness statement filed by the liquidators in these proceedings (that of Mark Newman, dated9 April 2021 ) stated… The invoices that Marpaul purports to rely upon provide only minimal information regarding the works to which they relate, consisting of either 1 sentence descriptions or broad phrases such as “Standing charge”. I do not consider that Marpaul has adequately demonstrated that the sums invoiced are properly recoverable under the JCT Contract. Despite this issue having been raised, [Marpaul] did not provide any significant further information to substantiate the sums set out in its invoices. [Marpaul] simply continued to exhibit and rely upon the same invoices up to and including Mr Clark's fourth witness statement……, which refers to 70 invoices in total of which 14 are said to be outstanding “either in part or in full.” The first invoice referred to…….is the same invoice…..dated23 May 2017 …….. Furthermore, [Marpaul] did not at any stage provide or exhibit a complete copy of the document which (it asserts) is the JCT Contract between the parties. [Marpaul] provided only the signed “Agreement” pages, without the relevant terms (and without confirmation of whether or not those terms were amended). It did not explain the basis upon which it was entitled to payment by reference to any term of any contract. Accordingly, as matters stood after the fourth witness statement, the quantum position was straightforward. [Marpaul] relied upon a series of invoices; the liquidators regarded those invoices as insufficient. The court faced the simple task (for which expert assistance was not required) of considering the 14 invoices [Marpaul] relied upon, and considering whether or not it was satisfied that they demonstrated an entitlement to payment of£1m . In Mr Clark's fifth witness statement Marpaul's position substantially changed (i) For the first time, [Marpaul] provided a copy of the JCT terms upon which it sought to rely. (ii) For the first time, [Marpaul] asserted that the parties agreed that Marpaul “would be paid the cost of any work we performed ourselves, plus an overhead and profit uplift on the cost of works, and a fee to cover our management services.” That was a wholly new basis of payment, which [Marpaul] had not previously suggested (Mr Clark's fourth witness statement, for example, refers to a “contract sum agreed”…… (iii) For the first time, [Marpaul] provided a “final valuation” prepared in March 2019, said to state “the total sum due to us and our subcontractors for all completed works as£9,933,831 .” That document alone is a spreadsheet over 70 pages long. (iv) For the first time Marpaul provided copies of the summary pages of 16 valuations not previously relied upon. (v) Marpaul provided, at paragraph 56, a summary of its claim that was for a different (and seemingly increased) figure to that contained in its proof. In short, there was a very substantial volume of new material, that was different to (and in some respect inconsistent with) what had come before. Much of the information (in particular the purported “final valuation”) is in a format that it will be difficult for the Court to deal with practically, without the assistance of an expert. It is unclear how [Marpaul] expects the Court to be able to evaluate the detail of a 70 page spreadsheet, and determine whether or not [Marpaul] is entitled to all the sums claimed."
"…..the liquidators can in principle agree to your client filing further evidence by 4.00 pm on1st March 2022 , subject to the following points. First, the liquidators are concerned as to the scope of what is being proposed. We understand that it is Marpaul's intention to submit evidence relating to “construction-associated quantum evidence” but it is unclear what this is expected to entail, or how extensive such evidence is likely to be. The liquidators are concerned that the adjourned trial date would be derailed if Marpaul sought to exhibit extensive further evidence and/or exhibits (i.e. a witness statement exceeding 10 pages in length, or exhibits exceeding 50 pages). The liquidators do not propose formally to limit Marpaul's evidence, but fully reserve their position if faced with evidence that is disproportionately long, raises wholly new issues, or requires expert input in order to properly respond."
"It has long been the law that an office holder is under a duty to examine every proof and consider the validity of the debt which is sought to be proved … He should require satisfactory evidence that the debt on which the proof is founded is a real debt … And the obligation is not negated even where the proof is based on a judgment …"
"Due to the financial difficulties of both the college and [the Company], and given the large sums outstanding and owing to Marpaul, they attempted to protect their position by making a demand on both the College and [the Company]. This in no way should be interpreted as anything other than an attempt on Marpaul's part to protect its position as best it could in a situation where the Hadlow Group was facing multiple insolvencies. It is no way reflective of the true contractual position, which for the reasons explained lies between Marpaul and [the Company]."
"executed by the parties……… which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create…….for….. documents to be a sham………all the parties thereto must have a common intention that the… documents are not to create the legal rights and obligations which they give the appearance of creating."
"[65] First, in the case of a document, the court is not restricted to examining the four corners of the document. It may examine external evidence. This will include the parties' explanations and circumstantial evidence, such as evidence of the subsequent conduct of the parties. [66] Second, as the passage from Snook makes clear, the test of intention is subjective. The parties must have intended to create different rights and obligations from those appearing from (say) the relevant document, and in addition they must have intended to give a false impression of those rights and obligations to third parties. [67] Third, the fact that the act or document is uncommercial, or even artificial, does not mean that it is a sham. A distinction is to be drawn between the situation where the parties make an agreement which is unfavourable to one of them, or artificial, and a situation where they intend some other arrangement to bind them. In the former situation, they intend the agreement to take effect according to its tenor. In the latter situation, the agreement is not to bind their relationship. [68] Fourth, the fact that parties subsequently depart from an agreement does not necessarily mean that they never intended the agreement to be effective and binding. The proper conclusion to draw may be that they agreed to vary their agreement and that they have become bound by the agreement as varied … [69] Fifth, the intention must be a common intention …"
"In general, it is legitimate and conventional, and a fair starting point, that fraud and dishonesty are inherently improbable, such that cogent evidence is required for their proof. But that is because, other things being equal, people do not usually act dishonestly …"
"…..Because a finding of sham carries with it a finding of dishonesty ….., and because the court places great weight on the existence and provisions of a formally signed document, there is a strong and natural presumption against holding a provision or a document a sham."
"…..we discussed taking the project over from Wilmott Dixon from around March 2015. ………. ……we worked on a detailed forecast plan for the works, with a proposed contract sum of£6,500,000 ...That cost plan shows that this was a detailed forecast cost split according to the stage of the works….. It is important to explain that the agreed cost plan was not an agreement for a fixed price contract. We were appointed principally as a management contractor. We had a forecast cost which we attempted to achieve but would carry out some work ourselves and appoint subcontractors to perform other works under our supervision. We would be paid the cost of any work we performed ourselves, plus an overhead and profit uplift on the cost of works, and a fee to cover our management services. That is an entirely standard approach to management contracts throughout the industry. During the course of the works we would update the cost plan as costs were incurred in order to provide an up-to-date forecast cost to completion, as well as provide the detail that was supportive of the sums claimed in our invoices. In this initial period, the work went ahead without a formal contract in place. As far as we were concerned, the cost plan was all we needed for the works to go ahead as that document set out the work we were to carry out and what we would be paid for it, and it provided the basis upon which costs could be tracked throughout the works. …….we had a long history of working with the Hadlow Group and were used to their way of working. They were not good at contract administration and relied on us to provide a professional level of organisation for the work. This approach of us providing a detailed cost estimate and reporting actual costs against it regularly throughout the work up to completion was out standard approach with them. It had worked well in the past, and subject to the payment difficulties we had from time to time, it worked well on this project too. As to which Hadlow Group company we had an agreement with at that time, it was not something we had discussed and it was not something that concerned us given our long history of working with the Hadlow Group. From our position outside the group it appeared that the Hadlow Group had a fairly chaotic approach to organising these sorts of projects but, as long as we were ultimately paid, those details did not concern us. The way they managed and allocated work within and between their companies was a matter for them, and if they had wanted us to sign a contract with any particular group company at that time we would have done so. After starting work, we issued our first valuation based on the latest cost plan on1 November 2015 …..from that valuation we were recording (1) Any variations to the cost plan that had been made. In this case there were four listed variations (2) The actual costs incurred against the cost plan to date (£288,218 in this first valuation). As the invoice schedule….shows, we started invoicing for the works based on our valuations from20 November 2015 . We would split up our invoices by area of work so that we were more easily manage the flow of payments down to our subcontractors. ………. Quite early on, however, a number of variations to the costs plan were required. As you can see in our February 2016 cost plan….., we had adjusted the Target Cost to over£7 million because of additional works that were needed to the foundations of the visitor centre. ……..We issued regular valuations throughout the works in that period which provided formal updates to the cost plan and the actual costs incurred against it. ………. ….., Hadlow instructed us to slow down and suspend the works from January 2017 whilst it worked through its funding issues. During that period we were told that we had to maintain labour and plant on site to give the appearance that the site was still operating, although no work of significance was being performed. I was told by Mark Lumsdon-Taylor that this had to be done while he rebalanced the financial situation given the increase in the forecast costs to completion. We did as we were instructed but considerable costs were incurred in this period because all the plant and materials were kept on site, including all temporary works, scaffolding, security and the full office support team. ……….. Th[e financial position] was eventually resolved, as indicated in Mark Lumsdon-Taylor's email dated30 June 2017 . ………. As we remobilised, we then provided a detailed programme for the remainder of the works…… which programmed completion of the project by24 October 2018 . During that period [of suspension] we had incurred substantial standing charges which we discussed with [the Company] throughout the period. As set out in our Valuation No. 15…. we were incurring an estimated£40,000 per week in standing charges. Following recommencement of the works, we put a final figure of£44,526 per week into our Valuation No. 16 dated31 December 2017 which we have maintained throughout our applications up to the final account in March 2019. All our valuations were provided to [the Company] at regular meetings throughout the works and discussed. At no point were our outstanding charges challenged. It was also during this period that it seems like one of the funders of the project discovered that we did not have the formal written contract for the construction works, or had asked to see it and [the Company] decided to formalise the agreement. Mark Lumsdon-Taylor therefore asked us to execute a JCT contract to address that concern. You can see in the completed contract………[that the] Contract Sum Document is a reference to our valuations…... The administrators who dispute our debt seem to think it was strange to impose the JCT terms onto a project that had been ongoing since 2015, but that was the nature of doing business with the Hadlow Group. They needed a formal contract to carry on with the project and we were prepared to sign up to one. As Mr Lumsdon-Taylor confirms, we had nothing to do with the naming of [the Company] as the employer. That was entirely his decision. As I have said….. I had no reason before this to question who the employer was and had no objection to [the Company] being named as the employer. In fact, it made sense, given that we were building the Betteshanger visitor centre which [the Company] would be running when it's opened. As far as I was concerned, I had no reason to think that [the Company] was not the employer all the way through the project, but even if that was not the case, my understanding was that [the Company] formally took over responsibility for the project and our account from that point. ………. As to payment terms, the situation was chaotic. Mr Lumsden-Taylor provided a series of cash flow analyses during this period which indicated when he expected to get funds from funders and how he intended to spend the money on the works…….. We spent time trying to understand this document, and other versions of it, against our valuations and projections for the total cost of the works……. …….. There was no point in our making applications for payment based on our valuations as any invoice would attract a VAT liability with uncertainty as to when we would be paid. We therefore tried to match our payment applications with the cash flow forecasts provided to us by Mark Lumsden-Taylor. That shift in practice meant that we stopped issuing regular valuations of our completed works. After recommencing works, our next valuation was not issued until December 2017 but we recommenced regular monthly valuations from March 2018 through to November 2018. The November 2018 application was the last valuation we issued prior to the suspension in January 2019. …….However, after the suspension of the works in January 2019 we revisited the account and produced a final valuation in March 2019…..which stated the total sum due to us and our subcontractors for all completed works as£9,933,831 . ………… ….our valuations were discussed with [the Company] throughout the works and were not disputed. That is because the adjusted contract sum was agreed and we made sure that every variation added to the account reflected an agreement for a fixed sum."
"Mr Newman makes reference in his statement to a letter dated2 September 2015 ……… …. Mr Newman references a line in that letter “ we are formally engaged with you for the project management and delivery of the Betteshanger Sustainable Park Centre” and the fact that the work commenced shortly thereafter in November 2015, as indicative that the letter was intended to be legally binding and that a contract had been formed. This was not the case, the letter was not intended to represent a binding agreement, but instead was a representation of initial opening instructions and it was only after subsequent discussion that the contract was agreed and later formalised in the terms of a JCT… Contract… dated19 August 2017 between Marpaul and [the Company]….' ….. Mr Newman then seeks to show that Hadlow College was the relevant contracting party as opposed to [the Company]. As mentioned…. the letter was not intended to be legally binding, but in any event, the fact it was written on Hadlow College headed paper, includes Hadlow College's address and states it as being agreed in line with “College regulations” is not indicative of the parties' intentions. Hadlow College Group is a collective group of entities which [the Company] is part of and when that letter was written it was merely an expression of the instruction which….. it was never the intention of any of the parties to form any binding contractual relationship other than between Marpaul and [the Company]. References to college “regulations” and “control” are just standard wording and should not be taken to suggest Hadlow College was a party to any subsequent contract. ……… In any event, it is noted that the JCT Contract is clear in that it confirms in clause 1.3 that nothing contained in any other contract document…….. will override the JCT Contract or its terms, and therefore it is somewhat irrelevant as to the content of the communications sent prior to the date of the JCT Contract."
"Further to our conversation last Friday, please find attached the following as agreed. Letter from Mark Lumsdon-Taylor confirming the project completion in line with agreed outputs - as discussed on Friday the cost overrun is being managed across the Group and the cash position is being managed accordingly. This is supported by the disposal of some Group assets, including the old Ashford College site, which has already taken effect. Revised bill programme - the programme has been revised in line with the cash flow position and the building will be handed over in December 2017 with Practical Completion in February 2018. Internal and external images of the build. Launch strategy. This was as prepared for a summer 2017 launch, but will be prepared for a spring 2018 launch. We are pulling together a claim for the retention sum, and this will be with you by close of play tomorrow."
"I have had a conversation with Richard Morsley, Director of Betteshanger Sustainable Parks, and I appreciate the time you have taken in discussing the current status of our project. I would like to confirm that this project will be completed in 2017 in line with its original specifications, delivering all the outputs we have agreed with the Coastal Communities Fund. I'd also like to confirm that Hadlow, as parent organisation, will ensure any cost overruns are absorbed. Hadlow Group has never failed to deliver a capital project despite unforeseen costs, and I can give you my professional guarantee that this will not change on the Betteshanger Sustainable Park scheme."
"As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which somehow were not; of unanswerable charges which in the event were completely answered; of inexplicable conduct which was fully explained …"
"…..Marpaul has not, at any stage in these proceedings, provided any underlying documents supporting any costs allegedly incurred by Marpaul in completing the works. It has (until Mr Clark's fifth witness statement) simply relied upon invoices issued by Marpaul itself. The further documents exhibited to Mr Clark's fifth witness statement appear to be summaries of the relevant costs and applications of payment, all produced by Marpaul itself. Mr Clark says in several places……that further evidence is available to support the alleged costs, but this is the first time that this has been mentioned. I do not see how I can be expected to take into account evidence or documents that Marpaul has not provided."
"……. Mr Clark's approach appears to be misconceived. In order to demonstrate that a sum is owed to Marpaul, Marpaul would need to demonstrate the value of all of the work completed and then show that there is a shortfall in the sums paid against the global figure. It cannot pick and choose which invoices it wishes to evidence/explain."
"On Marpaul's case it would appear that costs submitted by Marpaul should be simply accepted in full. However, there is no evidence of any confirmation from a quantity surveyor that represents the Employer's interests. Based on advice I have received (privilege over which is not waived), I consider it is highly unusual for a client and contractor quantity surveyor to agree on every cost for every item every month and all variations in the manner stated in Mr Clark's witness statement. This is particularly the case on a project lasting over several years and valued at several million pounds."
"We have heard back from the Heritage Lottery Fund about our current (and future) claim; we need to do some work…. With the current claim they have asked for greater clarity on the invoicing and will not draw down without it. They want to see ALL the invoices for a work/contractor package to date where museum work is included in it, with a signed Quantity Surveyor's assessment of the percentage/value of that package that is attributable to the museum space for each quarter/claim. They do not believe that our subcontractors are supplying invoicing for specific areas."
"I note your comments and will review them on Thursday with our QS Paul Torbett. As a general point; the project valuations have not been set up to support this approach and we are left with trying to justify the claims. We have valued the extent of works attributable as 23 per cent based on the floor area as the only realistic method. Are you saying that you require an external QS to audit the figures or can we do this as your appointed project managers?"
"We do not require a further QS, and this can be assessed through the project QS. Darren is off for the rest of the week, but given the amount of money we're talking about, I think we may need to work through the Museum cost plan with you in order to work out how we are going to substantiate the overall Museum budget with the project figures. I hope that we can work to this position and look to include prelims etc where necessary to bolster the overall spend."
"I've recreated the.. Cashflow spreadsheet in Excel and added figures as I know them. What I do not know are the relevant payments to Marpaul as these are not subject to certification…… What is most disconcerting is that the buffer I was building up to pay subcontractors when there was an apparent shortfall appears to have been reallocated and may cause some problems in the future. It would be most helpful if we could have a consistent set of figures that we can work to. We still have an overall shortfall of£653,757.80 that seems to be ignored."
"As you're aware, the College is currently experiencing some financial difficulties and is being supported by central Government until such time as a sustainable, financially secure future can be established. Given this position, we cannot pay anyone until those currently supporting us are satisfied that the amounts are rightly due. This means that we have to provide evidence to demonstrate that the contracts were properly procured and contracted with invoices clearly matched against individual contracts. With regards to yourselves and the way in which you worked with the previous executive across multiple developments, this is proving more difficult than envisaged and as a result is taking more time than expected. With regards to the Betteshanger site, I want you to continue to maintain the current position of keeping the building, equipment and material safe and secure until such time as any alternative arrangements for that location have been put in place. Please liaise with Dave Hammond directly on this issue. With regards to this instruction, please provide detailed invoice/s to Hadlow College separately for the costs you have, and will, incur for this element of work from Friday15th February 2019 , the date of my appointment to the College and, providing the invoices are accurate and a reasonable reflection of the costs involved, I will seek to process these as quickly as possible and outside of the other more problematic invoices so payment to yourselves is not delayed."
"….. I recognise that this is a difficult period but we are not able to process your historic invoices until we are able to demonstrate to central Government, in effect the Treasury, that each of those invoices is correctly allocated against an individual contract that has been properly procured and is rightfully payable. Unfortunately, the way your business undertook its business arrangements with the College and the way the transactions were recorded within the college makes this a particularly difficult task…………. On another issue, please be aware that we're having to demonstrate good value for money to central government to ensure we continue to receive the financial support the colleges currently require. Questions have been asked concerning the costs related to the ongoing security of the Betteshanger visitor centre. I have therefore asked Dave Hammond to obtain three independent quotes, in accordance with our Financial Regulations procurement processes. The closing date for this process is……….. 3 April and decisions will be made by…… 5 April, with a view to entering into a new contract with the successful contractor……. I have asked Dave to include yourselves in the requests to tender should you wish to and if you are successful, you will be appointed under a new and separate contract that will ensure [you] will be paid in full for the work undertaken from 8 April onwards."