"65% at completion of tender stage and the balance by equal monthly payments over the contract period"
“As we are all aware, [the] BQ bears no resemblance to the works we were ultimately instructed to carry out due to additional works and specification changes. That is the main reason the account has gone up in value. IE doors staircases partitions flooring ironmongery clean lines. The list goes on and is highlighted in the latest valuation. I have been offering my concerns over finances for many months now, in September I thought we were£400k over the contract sum when we met at your offices. Even as we speak we apparently need another lamp in one of the rooms costing another 4k. More boxes for electric equipment. Pebbles to the courtyard, attendance works to x ray room, etc, etc. Should we be doing these works or are we compounding a problem?” (2) A letter from Mr Brindle to Mr Hargreaves dated24 May 2012 in which, responding to Mr Hargreaves’ request for more detail to support a claim for increased design team fees as a result of internal layout changes, Mr Brindle set out a summary of the alterations required by the PCT and tenants, and concluded: "The value of works affected in this exercise are in excess of£3 million so approximately half of the project content had to be revisited". She also relies upon the fact that Mr Hargreaves, when this was put to him in cross examination [D4/266], did not without reference to the drawings feel able to dispute its accuracy, although I do not for my part take this as anything more than natural prudence on his part. (3) A comparison between the original and the revised layout drawings, and the minutes of some of the meetings, which appear to show the production of revised room data sheets sometime in 2011. 2.34. Whilst I accept that these documents do indeed provide support in general terms for Clark’s position they do not, in my view, provide any real assistance in enabling me to understand the sheer scale of the changes, let alone the extent to which some or all represented PCT or sub-tenant instigated changes as opposed to ongoing detailed design and development, and let alone (in either case) the extent to which these changes continued to occur to a substantial extent even after the initial redesign in early 2011, or the scale of the actual costs associated with each. In so finding I am not to be taken as implicitly finding that Clark bears any onus of proof as such, only that insofar as Clark seeks to persuade me by reference to detailed evidence that I am able to make positive findings in its favour that these changes were extensive, both in substance and duration, and that their cost and impact was equally extensive, it has not succeeded in doing so. 2.35. However I am satisfied that Clark cannot be blamed for the lack of detailed design as at the point these contracts were entered into, even if there had been – which there is not - a detailed pleaded case supported by evidence setting out Dock Street’s case as to precisely in what respects it was incomplete or inadequate, let alone why Clark ought as project manager and/or quantity surveyor to have known it to be so. Since the design team were working on a speculative basis Clark, in its capacity as project manager, had no lever to compel the architect, for example, to do further detailed design work until such time as it was formally appointed and received some payment. Furthermore, Clark had no ability to compel the PCT or its proposed tenants to provide detailed design input prior to conclusion of the agreement for lease. Finally, I have no doubt that the last thing that anyone, including Mr Abbott, would have wanted was to have a lengthy hiatus immediately prior to contracts being signed in order to complete the design first, followed by some form of Mexican standoff whilst everyone wrangled about who should absorb the extra costs of the design development or changes and how if at all the contracts should be amended accordingly. Valuation of changes 2.36. I am unable to accept Clark's case that Mr Abbott was given oral advice on a regular basis throughout the course of the works as to the nature and extent of the changes and the scale of the actual or likely costs associated with them. Indeed there is no hard evidence that at any time during the course of the works Clark attempted to put any detailed or reasoned valuation on these costs, even though it was apparent from communications from Parkinson that it considered that it was incurring significant costs as a result. There is an e-mail sent by Mr Whittle to Mr Brindle on22 September 2011 [2/701] in which he referred to the fact that his final account assessment, albeit very provisional at that point, was indicating a predicted overspend of£457,000 , and expressed his concern as to Mr Abbott’s ability to fund any overspend. The further email exchange on 28 and29 September 2011 [2/702] indicates quite clearly in my view that Mr Brindle wanted to roll any variations up within monthly valuations, without identifying them as such, but Mr Whittle’s view was that this was simply storing up trouble for the future. Mr Whittle in his further e-mail to Mr Brindle dated6 October 2011 [2/613] referred to the "potential overspend" and chased Mr Brindle for figures to input into his "variation schedule". Mr Brindle in his e-mail responses of 11 and17 October 2011 , referring to Parkinson's figure of£457,000 , did not address the variation schedule, instead suggesting ways in which variations might be cancelled out by other costs savings, or by passing costs over for recovery from the PCT. There is no indication that any of this information was provided to Mr Abbott at the time. There is a further email from Mr Whittle to Mr Brindle dated24 January 2012 [2/703], in which he expressed his concern that variations are “running away”, to which there appears to have been no response. By February 2012 there was an indication that Mr Whittle was aware that Mr Brindle was anticipating a final account of£7.3M , and worrying how the increase from the contract sum was going to be funded, but again there is no indication that this was raised by Mr Crewdson or Mr Brindle with Mr Abbott. 2.37. I have not been referred to the detail of the interim payment applications submitted by Parkinson, which do not appear to have been disclosed either by Clark or by Dock Street (assuming it ever received copies). Nonetheless it is clear from these e-mails that Mr Brindle realised that Parkinson was claiming substantial extra payment on the basis of increases in the provisional sum allowances and variations. It appears that Mr Brindle's response was simply to refuse even to embark upon the exercise of considering, let alone valuing, those claims. Instead, what he appeared to do was to value interim applications on the basis of a percentage assessment of the value of the bill item sums. An example is at [2/694-697]. He made no attempt to produce monthly valuations on a more detailed basis, valuing omitted and added work under each BQ item and separately itemising additional work, so as to produce a more detailed valuation. Given that it was Mr Brindle’s position in cross-examination [D3/005] that there was no need for him to produce a cost plan, since the BQ was the equivalent of, and in fact far superior to, any cost plan, it is all the more surprising that he did not seek to update the BQ on that basis so that cost increases could be tracked and reported, even if only in general terms. 2.38. I am satisfied that Mr Brindle did not make any attempt to value the variations for at least two reasons. The first was that if he had produced monthly valuations on that basis they would, towards the later stages of the project, have shown the contract sum being exceeded, with the result that Dock Street would have had to fund the shortfall, which it was in no position to do: see the email exchange in April 2012 at [2/624]. The second was that it saved him the time and trouble of having to embark on the process of scrutinising the individual valuation claims and considering whether or not they were valid and, if so, whether or not they could be passed on to the PCT. I am satisfied that neither he nor Mr Crewdson explained to Mr Abbott that the reason he was not valuing variations was to assist Dock Street’s cash flow. However I am also satisfied that if they had done so Mr Abbott would willingly have gone along with it, for obvious financial reasons. Plainly, however, since Mr Brindle had made no attempt even to begin to try to quantify the additional costs, it is most improbable that either he or Mr Crewdson would have been in any position to give any useful advice to Mr Abbott as to those costs and it follows, I am satisfied, that neither he nor Mr Crewdson did so. 2.39. Another factor in play at this time, which also contributed to the lack of clarity about variations and their recovery, was that Mr Abbott had reached some understanding with Mr Hargreaves that he would not seek to make any claim against the PCT for extra costs due to changes made by the PCT or the tenants, so long as they were not significant. Mr Abbott agreed that he had done this in cross examination, and it is referred to in an exchange of emails between Mr Crewdson and Mr Hargreaves in February 2011 [10/2323]. As Mr Abbott said however, and as I accept as being consistent with my overall impression of him, when he reached this understanding he believed that he was talking about relatively minor changes with relatively minor cost implications. He had no idea at that time or subsequently as to the true magnitude of the cost implications of what was happening. If he had done so he would have been far less sanguine, I have no doubt. 2.40. In the email correspondence of February 2011 referred to above Mr Crewdson was complaining to Mr Hargreaves that certain changes then under consideration were significant and may well have significant cost consequences. Mr Hargreaves did not agree. After some delay Mr Crewdson responded, maintaining his position, but there is no indication that he stood his ground and argued that unless the changes were treated as formal variations with potential cost implications under clause 7 of the agreement for lease they would not be accepted. Mr Crewdson and Mr Brindle suggest that this is because they were told by Mr Abbott that they should give the PCT what it wanted, and he would find the money. There is no documentary evidence to support this, and I do not consider that Mr Abbott is the sort of businessman who would give anyone licence to spend what he would have regarded as his own money on a completely uncontrolled basis. I am prepared to accept that some conversation to that effect did take place at some stage, but only in the context of what Mr Abbott was led to believe were relatively modest changes with relatively modest amounts involved. I do not consider that this was, or reasonably capable of being understood as, a licence to Clark to allow the PCT to have what it wanted regardless of cost. Indeed that would be inconsistent with Clark’s subsequent attempts to recover certain variation costs from the PCT. 2.41. I am however satisfied that Mr Crewdson and Mr Brindle proceeded on the basis that they were free from what would otherwise be the burdensome necessity of having to keep a very tight control on the cost implications of ongoing design development and ongoing design choices made by the PCT and proposed tenants, in terms of ensuring that: (i) these changes were recorded at the time; (ii) costings for these changes were obtained from Parkinson and, where possible, agreed with Parkinson at the time; (iii) Mr Abbott was kept informed of these changes and their cost implications, so that he could decide whether or not to sanction them, or to explore other alternatives, and in either case whether to absorb those costs himself or seek to pass them on to the PCT; (iv) in so far as a decision was made to seek to claim these costs over from the PCT, to communicate such intention and the costs involved at the time, no doubt thereby provoking a further disagreement with Mr Hargreaves. 2.42. I am also unimpressed by Mr Brindle’s explanation that it was simply not possible to attempt to cost the changes at any stage up to practical completion. If, as I am satisfied, the major internal design changes as instigated by the PCT and proposed subtenants were largely completed by March 2011, it is difficult to understand how it could have been impossible to put any figure on the cost of these changes for a full 12 months thereafter, or thought to be justifiable not to do so, especially when: (a) it is clear that Parkinson was putting figures on variations over this period, and positively inviting Mr Brindle to do the same; (b) Mr Crewdson and Mr Brindle must have known that Dock Street would be at risk of having to fund any shortfall between its liability to Parkinson and its recovery from the PCT. I note that Mr Martin was, not surprisingly, unable to defend this explanation in his evidence. 2.43. In reaching these conclusions I am not, I hope, downplaying the difficulties which I am sure Mr Crewdson and Mr Brindle faced in this context. One can see from the minutes just how difficult it must have been at times to try to keep this project properly managed as regards changes and their costs implications, in circumstances where there were so many different actors involved and interests in play. However, the firm conclusion I have reached is that from a relatively early stage Mr Crewdson and Mr Brindle largely abandoned any attempt to do so, in favour of an optimistic expectation that all would come good in the end, assuming that insofar as there was a significant cost overrun it could be resolved by reaching some accommodation with Parkinson and the PCT whereby the financial impact was agreed with Parkinson and then settled by the PCT. Indeed it appeared from cross-examination of Mr Crewdson [D1/230-1] that he was operating under the belief that Dock Street was in some way obliged to give the PCT what it wanted, because if it did not the PCT would not take up the lease. That belief was clearly erroneous, because the PCT was already committed to take the lease under the terms of the agreement for lease, and because the agreement for lease did not permit the PCT to demand unreasonable variations, or to demand variations without paying for them. Even if it was correct, it did not absolve Clark from ensuring that changes were accepted by the PCT as being its financial responsibility, or otherwise monitoring them and their cost. Mr Crewdson and Mr Brindle appear to have concentrated their time and energies on the wholly laudable objective of getting the project completed within a reasonable time and to the satisfaction of all involved. Regrettably, that also appears to have involved taking the path of least resistance as regards design changes and costs, and failing to appreciate the difficult position in which that would leave Clark's clients, Dock Street, if financial matters could not be resolved to everyone’s mutual satisfaction at the conclusion of the project. Progress of the works 2.44. The contract commencement date under the building contract was stated to be17 January 2011 , with a contract period of 48 weeks. There is some issue as to when Parkinson started back on site, but it is common ground that practical completion was certified as having been achieved on23 March 2012 . It is clear from the documents that all parties proceeded on the basis that there was a delay of 8 weeks in achieving practical completion. It appears from the final account claim advanced by Parkinson that this was on the basis of a start on site of31 January 2011 [22/2012]. 2.45. I am not invited, nor am I in a position given the lack of evidence adduced on the point, to undertake a detailed review of the progress of the works. I have been referred to various minutes of project team meeting, of site meetings and of design team meetings. Reference has also been made to various items of correspondence over this period. However, in the same way as with the changes and their cost implications, neither party has undertaken the task, whether in witness or expert evidence or otherwise, of analysing the progress of the works, and tracking the dates when, for example, updated drawings or room data sheets were issued and their impact. Indeed Dock Street does not even plead such a case. In such circumstances it is simply not possible, nor even proper, for the court to undertake that task itself. There is no suggestion in the contemporaneous documents, nor any obvious basis for considering, that all or indeed any substantial part of such delay as occurred was due to any default on the part of Parkinson. Although Clark appears at various times to have suggested that Dock Street would be entitled to deduct liquidated damages from Parkinson, that appears to have been on the basis that no formal extension of time had been granted by the contract administrator, Manning Elliott, rather than because a considered view had been formed by Clark or Manning Elliott that Parkinson would not have been entitled to an extension of time on the merits. Furthermore, there is no clear evidential basis for any conclusion that Clark was responsible, whether in whole or in substantial part, for any such delay. All that could be said was that since Clark was project manager it was its responsibility to ensure that the project was completed on time, but since it cannot be suggested that: (a) Clark gave a contractual warranty to Dock Street that the project would be completed by the contractual date for completion under the main contract; (b) Clark was able to control every potential cause of delay, that does not of itself enable Dock Street to succeed without pleading and proving a positive case as to why all or some identified part of the delay was due to Clark’s breach of duty. 2012 Parkinson’s final account 2.46. By the date of practical completion attention was of course turning to the question of the final account. Thus on14 March 2012 Mr Crewdson wrote to Aviva [2/623], stating that the “anticipated final account” was£7.3M . Reference was made to an ongoing claim against the PCT for the “delayed start and variations attributable to the PCT” of£371,000 , and to levying liquidated damages of£116,000 . He stated that “we expect the final account to settle at£7 million ”
"We are willing to work with you on all matters including cash flow problems, although a formal agreement for the final account and payment agreement is required". 2.54. Although both Mr Crewdson and Mr Brindle were very eager to blame Mr Abbott for not going through with the settlement at the figure of£7,662,500 , it seems to me that they were as much to blame as Mr Abbott. Mr Crewdson was perfectly willing to put his name to the counter-proposals and there is no suggestion from him, nor basis for suggesting, that he advised Mr Abbott at the time that the proposed deductions had no merit, so that in fact there was no genuine basis for disputing the settlement figure. Moreover Mr Brindle could not properly have advised that the settlement was a fair final account settlement in circumstances where he had, I am satisfied, not conducted the analysis with sufficient detail to satisfy himself what the true final account was likely to be. 2.55. I am satisfied that there were only two options realistically open to Dock Street at that time. The first was to do what Mr Abbott and Mr Crewdson attempted to do, which was to raise various spurious counter-arguments and seek to negotiate a reduced final account figure and no commitment to a sensible payment timetable. The second was to stick with what was an agreed final account figure, and then to seek to renegotiate a mutually acceptable payment timetable with Parkinson. The second could always have been attempted after the first, if that failed, as evidenced by Parkinson’s response of27 July 2012 . It is noteworthy than when Mr Abbott was left alone to negotiate with Parkinson he was willing and able, in July 2012 and again in January 2013, to reach a mutually acceptable final account figure and (in January 2013) to reach a mutually acceptable payment timetable. It seems to me, therefore, that if Mr Brindle and Mr Crewdson had advised at the time and in terms that the agreed final account figure appeared reasonable, that there was no justified basis for seeking to make any deductions from it, and that unless Mr Abbott reached some acceptable negotiated payment terms with Parkinson Dock Street would inevitably be faced with a much higher formal final account submission followed by an adjudication, then that in my view on the balance of probabilities is what would have happened then as well. 2.56. In cross-examination Mr Abbott said that if he had needed to do so he would have been able to have paid off Parkinson by procuring funds which he anticipated becoming available on receipt of a premium in relation to the proposed lease of the pharmacy space within the centre. His evidence, which is consistent with the contemporaneous evidence [5/566], was that he was still negotiating terms in relation to the pharmacy, because he regarded the current offer as insufficient, and had taken a conscious decision to put off paying Parkinson and the design team by doing a deal on the pharmacy on the basis that he could obtain more by waiting. Whilst I am not convinced that he would have been able to gain access to sufficient funds to pay off the full amount of the liability by31 August 2012 I am prepared to accept, based upon the evidence of his financial dealings both before and after this date, that he would have been able to access sufficient funds to make a payment proposal which Parkinson would, albeit reluctantly, have been prepared to accept. That is consistent with Dock Street paying Parkinson£150,000 in relation to the pre-contract suspension claim in June 2012 and a further£200,000 in December 2012 (as stated in the Adjudication Notice), and with reaching a mutually acceptable deal with Parkinson in January 2013. 2.57. On10 September 2012 Mr Brindle issued a further valuation in the amount of the original contract sum. It is not immediately apparent why he did this, notwithstanding his witness statement [§76, WS1]. He does, however, also say in §76 that at that time he reminded Dock Street that in his opinion the final account with Parkinson was around£7.5 million , and that any attempted contra charges were unlikely to be successful. I do not accept this, there being no contemporaneous evidence to support it, and it being inconsistent with the clear impression I have formed that Mr Brindle was not willing to provide any advice as to the contra-charges, but it is in my view the sort of advice which should have been given from May 2012 onwards, but was not in fact given. 2.58. On21 September 2012 Parkinson submitted its formal final account submission, in 6 files, claiming the sum of£8.4 million . As Dock Street contends, and Clark is unable to dispute, that submission triggered the timetable provided for by clause 4.5.2 of the building contract conditions, so that Clark as the quantity surveyor was obliged to produce the final account within three months, thus by21 December 2012 . Clark is also unable to dispute that it failed to take any steps whatsoever to produce a final account within that period. In their witness statements, Mr Crewdson and Mr Brindle appear to contend that they had undertaken a full final account analysis in around May 2012 but that they deliberately decided not to provide Dock Street with "the full details of the final account", because of their concerns that Dock Street was not paying Clark what it was due under the fee agreement. For the reasons I have already given, I am unable to accept this as a credible account. I am satisfied that Clark simply did nothing in response to this claim, both because they were ignorant as to the contractual obligation and because they were not willing to do this work without payment. The adjudication by Parkinson and the settlement of its final account claim 2.59. In the absence of any response to its final account submission, and in the absence of any settlement or payment proposals, Parkinson prepared to make a claim. On11 January 2013 it gave notice of adjudication, and on18 January 2013 it served its referral notice, accompanied by a further 3 files containing the material in support. The referral notice valued the final account in the sum of£8,109,127.66 . It was plain from the referral notice that Parkinson was not making any claim for the pre-contract suspension costs. That is because, as Mr Whittle explained, he had been advised, as is well known to lawyers practising in the field of construction adjudication, that it was not possible to refer in one adjudication disputes arising under more than one contract, and the claim for the pre-contract suspension costs would have to have been made under the letter of intent, rather than under the building contract. The referral notice did however include a claim for post-contract delay costs. 2.60. The appointed adjudicator gave Dock Street until23 January 2013 to provide its response. Mr Abbott instructed Forbes Solicitors to provide assistance. A contemporaneous e-mail from Forbes dated21 January 2013 [8/1639] to Mr Abbott, Mr Crewdson and Mr Brindle records that: (1) There had been a meeting the previous week with all three men, at which various responses to the claim had been discussed. (2) Forbes had not been instructed to prepare a response in relation to the adjudication, but was prepared to do so on payment of£7 -8,000 on account of costs and detailed instructions. (3) Forbes had been asked and was willing to attend a without prejudice meeting to be held that same day involving Mr Abbott and Parkinson (but not Mr Crewdson or Mr Brindle). 2.61. It appears that neither Mr Crewdson nor Mr Brindle were prepared to provide any detailed assistance to Dock Street as regards its defence to the adjudication, for the same reasons as before. It should be noted however that it was not something which was expressly required of them under the terms of the deed of appointment in any event, and it also appears that by this stage Mr Abbott had begun to lose confidence in them. There is an e-mail from Mr Crewdson to Mr Abbott dated18 January 2013 [11/58] in which it appears to be suggested that Mr Brindle’s final account assessment was in the sum of£7.6M including the pre-contract suspension costs, and that Mr Abbott’s options involved reaching an agreement with Parkinson on a final account valuation of between£7.65 and£7.7 million . 2.62. It is apparent that a settlement was achieved at the meeting on21 January 2013 , at which Mr Abbott effectively reached a commercial agreement with the representatives of Parkinson present. In short, a settlement of the final account was agreed in the sum of£7.7 million , which was not broken down in any way. Although Mr Abbott said that the meeting lasted for some considerable time, he claimed to be unable to recall much, if anything, of the detail, and the impression he gave was that the settlement in relation to the value of the final account took little time to achieve, whereas the real negotiations dealt with the payment arrangements. Mr Whittle’s evidence was to similar effect, and that appears consistent with the fact that Mr Abbott would have had no real material let alone expertise to put to Parkinson to seek to challenge individual items of the final account. A deed of compromise was entered into on6 February 2013 [6/835]. In short, Dock Street agreed to pay the outstanding balance of around£843,000 by two instalments of around£225,000 by the end of March 2013 and the balance by monthly payments of£1,000 , with security being provided by Dock Street in relation to the centre and another property. Dock Street also agreed to make a contribution of£20,000 towards Parkinson’s costs of the adjudication, and to pay one half of the adjudicator’s fees. As matters currently stand, substantial monies remain outstanding under that compromise, but there is no suggestion that Parkinson have any direct financial interest in the outcome of this litigation. 2.63. The settlement, as reflected in the deed of compromise, was a compromise of the final account claim under the building contract, and did not specifically refer to any remaining liability in relation to the pre-contract suspension costs claim. For the jurisdictional reason I have already explained, it was not included in the adjudication. Mr Whittle said that at the time he was of the belief that this claim remained outstanding, and that the£150,000 previously paid was only a payment on account, but he had more recently been told that it had been settled by the payment of£150,000 . The explanation that it had previously been settled was consistent with Mr Abbott's evidence and, although the picture is not entirely clear, and although it is rather surprising that Mr Whittle was not aware of this earlier, nonetheless on balance I accept that the claim had already been settled by payment and acceptance of£150,000 . 2.64. On14 February 2013 Mr Crewdson sent an e-mail to Mr Abbott [2/537], responding to a complaint by Mr Abbott that he had not been informed why construction costs had overrun. Inconsistently with Mr Crewdson's and Mr Brindle's insistence that Mr Brindle had already produced a detailed final account in around May 2012, Mr Crewdson said this: "
“…it is regarded as well-established that in relation to contracts for professional services where the obligation in question has been substantially performed the professional is entitled to his fee and there is no scope for applying the doctrine of abatement: see the discussion in Jackson & Powell on Professional Liability at paragraphs 3-008 to 010 and at paragraphs 9-331 to 332, referring in particular to the decision of the Court of Appeal in Hutchinson v Harris (1978) 10 Build LR 19 and the review of the law by Jackson J (as he then was) in Multiplex Construction v Cleveland Bridge[2006] EWHC 1341 (TCC) .” 5.7. Mr Mort made detailed submissions in relation to this aspect of the case in his opening submissions and again at §237-261 of his closing submissions. In summary, his position is as follows: (1) Jackson J in Multiplex recognised a distinction between abatement in its true sense and a right of deduction. Thus whilst he did hold [§652(vi)] that “abatement is not available as a defence to a claim for payment in respect of professional services” he also held, in the context of a defence to a claim for payment for professional services in the production of drawings that [657]: “Schedule 1C is a claim for defective design work. This is a claim in respect of professional services. Accordingly, the defence of abatement is not available. Multiplex’s only remedy for unsatisfactory drawings which required revisions or modifications is a claim for damages for professional negligence. However, if there are some drawings which were so unsatisfactory that they were discarded and no use was made of them, in my view Multiplex could refuse to make any payment whatsoever in respect of those drawings. However, any defence on this basis or any claim for repayment on this basis would not be a plea of abatement. It would simply be a contention that no payment should be made at all for professional services which were worthless.” (2) It follows, he submits, that a client is not obliged to pay a professional for discrete services which were not performed at all or which were performed so poorly that they were worthless. Although that may not, in Jackson J’s analysis, be abatement properly so called, it is sufficient for the purposes of his argument in this case. (3) He submits that Jackson J’s analysis is consistent with the prior decision of the Court of Appeal in Hutchinson v Harris[1978] 10 BLR 19 , in which at p.32 Stephenson LJ appeared to accept the argument that if an architect had not done a particular piece of work the cost of that work should be knocked off the total amount of the fees. (4) He submits that the distinction between the right of abatement and this wider right of non-payment for discrete items of non-performed or poorly-performed services (which I shall refer to for shorthand as deduction) is better understood once one understands the historical origin of abatement as being a right of set-off only available in cases of contracts for the sale of goods or for work and labour. He refers to the decision of the Court of Appeal in Hoening v Isaacs[1952] 2 All ER 176 , where the Court of Appeal held that the claimant, an interior decorator and designer, was entitled to payment for the balance of the price notwithstanding defects in the completed works, on the basis that there had been substantial performance of the contract, but that there should be a deduction for the cost of remedying the defective works, applying the right of abatement as established in Mondel v Steel (1841) 8 M&W, 858. In Mondel v Steel the right of abatement was described as the right of a defendant to “defend himself by shewing how much less the subject matter of the action was worth by reason of the breach of contract”
“(a) Ultimately, claims by contractors for delay or disruption related loss and expense must be proved as a matter of fact. Thus, the Contractor has to demonstrate on a balance of probabilities that, first, events occurred which entitle it to loss and expense, secondly, that those events caused delay and/or disruption and thirdly that such delay or disruption caused it to incur loss and/or expense (or loss and damage as the case may be). I do not accept that, as a matter of principle, it has to be shown by a claimant contractor that it is impossible to plead and prove cause and effect in the normal way or that such impossibility is not the fault of the party seeking to advance the global claim. One needs to see of course what the contractual clause relied upon says to see if there are contractual restrictions on global cost or loss claims. Absent and subject to such restrictions, the claimant contractor simply has to prove its case on a balance of probabilities. (b) ... (c) It is open to contractors to prove these three elements with whatever evidence will satisfy the tribunal and the requisite standard of proof. There is no set way for contractors to prove these three elements. For instance, such a claim may be supported or even established by admission evidence or by detailed factual evidence which precisely links reimbursable events with individual days or weeks of delay or with individual instances of disruption and which then demonstrates with precision to the nearest penny what that delay or disruption actually cost. (d) There is nothing in principle "wrong" with a "total" or "global" cost claim. However, there are added evidential difficulties (in many but not necessarily all cases) which a claimant contractor has to overcome. It will generally have to establish (on a balance of probabilities) that the loss which it has incurred (namely the difference between what it has cost the contractor and what it has been paid) would not have been incurred in any event. Thus, it will need to demonstrate that its accepted tender was sufficiently well priced that it would have made some net return. It will need to demonstrate in effect that there are no other matters which actually occurred (other than those relied upon in its pleaded case and which it has proved are likely to have caused the loss). It is wrong, as Counsel suggested, that the burden of proof in some way transfers to the defending party. It is of course open to that defending party to raise issues or adduce evidence that suggest or even show that the accepted tender was so low that the loss would have always occurred irrespective of the events relied upon by the claimant contractor or that other events (which are not relied upon by the claimant as causing or contributing to the loss or which are the "fault" or "risk" of the claimant contractor) occurred may have caused or did cause all or part of the loss. (e) The fact that one or a series of events or factors (unpleaded or which are the risk or fault of the claimant contractor) caused or contributed (or cannot be proved not to have caused or contributed) to the total or global loss does not necessarily mean that the claimant contractor can recover nothing. It depends on what the impact of those events or factors is. An example would be where, say, a contractor’s global loss is£1 million and it can prove that but for one overlooked and unpriced£50,000 item in its accepted tender it would probably have made a net return; the global loss claim does not fail simply because the tender was underpriced by£50,000 ; the consequence would simply be that the global loss is reduced by£50,000 because the claimant contractor has not been able to prove that£50,000 of the global loss would not have been incurred in any event. Similarly, taking the same example but there being events during the course of the contract which are the fault or risk of the claimant contractor which caused or cannot be demonstrated not to cause some loss, the overall claim will not be rejected save to the extent that those events caused some loss. An example might be (as in this case) time spent by WLC’s management in dealing with some of the lift problems (in particular the over-cladding); assuming that this time can be quantified either precisely or at least by way of assessment, that amount would be deducted from the global loss. This is not inconsistent with the judge’s reasoning in the Merton case that “a rolled up award can only be made in the case where the loss or expense attributable to each head of claim cannot in reality be separated”, because, where the tribunal can take out of the "rolled up award" or "total" or "global" loss elements for which the contractor cannot recover loss in the proceedings, it will generally be left with the loss attributable to the events which the contractor is entitled to recover loss. (f) Obviously, there is no need for the Court to go down the global or total cost route if the actual cost attributable to individual loss causing events can be readily or practicably determined. I do not consider that Vinelott J was saying in the Merton case (at page 102 last paragraph) that a contractor should be debarred from pursuing what he called a "rolled up award" if it could otherwise seek to prove its loss in another way. It may be that the tribunal will be more sceptical about the global cost claim if the direct linkage approach is readily available but is not deployed. That does not mean that the global cost claim should be rejected out of hand. (g) DMW’s Counsel’s argument that a global award should not be allowed where the contractor has himself created the impossibility of disentanglement (relying on Merton per Vinelott J at 102, penultimate paragraph and John Hollandper Byrne J at page 85) is not on analysis supported by those authorities and is wrong. Vinelott J was referring to unreasonable delay by the contractor in making its loss and/or expense claim; that delay would have led to their being non-compliance with the condition precedent but all that he was saying otherwise was that, if such delay created difficulty, the claim may not be allowed. He certainly was not saying that a global cost claim would be barred necessarily or at all if there was such delay. Byrne J relied on Vinelott J’s observations and he was not saying that a global cost claim would be barred but simply that such a claim "has been held to be permissible in the case where it is impractical to disentangle that part of the loss which is attributable to each head of claim, and this situation has not been brought about by delay or other conduct of the claimant”
“2. The changes to the scope and/or quality of the works referred to, and the consequent cost of each variation to the Defendant, are as follows: (1) works to the courtyard area, at a cost of£15,495.00 ; (2) enhanced finishes to the interior of the lift car supplied by Otis, at a cost of£1,555.00 ; (3) changes to the internal door veneer, at a cost of£49,724.00 ; (4) non-standard colour to IPS, at a cost of£5,980.00 ; (5) floor tiling by Granite Tops UK, at an additional cost of£27,406.00 ; (6) enhanced floor coverings, at an additional cost of£91,603.00 ; (7) instruction to form “clean lines” for the gypliner and columns, at an additional cost of£22,794.00 ; Total cost to the Defendant:£214,557.00 .” (1) works to the courtyard area, at a cost of£15,495.00 ; (2) enhanced finishes to the interior of the lift car supplied by Otis, at a cost of£1,555.00 ; (3) changes to the internal door veneer, at a cost of£49,724.00 ; (4) non-standard colour to IPS, at a cost of£5,980.00 ; (5) floor tiling by Granite Tops UK, at an additional cost of£27,406.00 ; (6) enhanced floor coverings, at an additional cost of£91,603.00 ; (7) instruction to form “clean lines” for the gypliner and columns, at an additional cost of£22,794.00 ; Total cost to the Defendant:£214,557.00 .” 7.2. The order made at the pre-trial review gave Clark permission to serve an amended Reply and Defence to Counterclaim, which it did, and in which it was contended, in summary, that the changes were due to the ongoing design development process undertaken in conjunction with the input of the PCT and the proposed tenants, and it was denied that the works were unnecessary. 7.3. The experts had not formally considered these items in their first joint meeting, held before the pre-trial review, although Mr Martin is recorded as stating that the claim was “extremely speculative” and the items “subjective”