“the Employer wishes to have the following work carried out: The expansion of existing visitor attraction (new build works only). The Dark Walk Attraction contract consists of constructing a new building to extend the existing visitor attraction. This includes the installation of attraction associated external works and drainage. at Bodmin Jail. Berrycoombe Rd, Bodmin, PL31 2NR (“the Works”) and has had drawings and either a specification or work schedules prepared which show and describe the work to be done;”
“2. Variation of Contract 2.1 With the agreement of the Contactor which is hereby given the Employershall issue tenders for the works comprised in the Development save for the demolition works in respect thereto and shall invite the Contractor to tender for the same. 2.2 Following receipt of tenders issued pursuant to the agreement in clause 2.1 above the Employer shall award and enter into a contract for the whole of the works comprised in the Development and the Contract (New Contract). 2.3 In the event that the New Contract is awarded to and entered into with the Contractor then the Contract shall be deemed terminated and the Contractor shall proceed with the works under the terms of the New Contract. In which event: all payments made to the Contractor by the Employer under the Contract shall be deemed paid under the New Contract; All works carried out under the Contract shall be deemed carried out under the New Contract; All obligations owed by one party to the other under the Contract as at the time of termination shall be deemed owed by such party to the other under the New Contract. 2.4 In the event that the New Contract is awarded to and entered into with a contractor other than the Contractor (New Contractor) then at the option of the Employer, the Employer may by notice in writing served on the Contractor no later than 7 days after entering into the contract with the New Contractor either terminate the Contractor's employment under the Contract or novate the Contract to the New Contractor. 2.5 In the event that the Contract is terminated then: The Employer shall within 21 days pay to the Contractor all sums due under the Contract for the work undertaken by the Contractor together with the Contractor's reasonable costs of demobilisation; The Contractor shall not be entitled to loss of profit or overhead contribution on works not completed under the contract. 2.6 In the event that the Employer novates the Contract then: The novation shall be deemed as if entered into between the Contractor and New Contractor ab initio; The Employer shall procure that the New Contractor accepts the Contract as novated to the New Contractor and is bound to the Contractor in a relationship of main contractor and Trade Contractor and accepts that the terms of the Contract are deemed varied to reflect that relationship with the New Contractor assuming roles within the Contract normally undertaken by the Main Contractor and relieving the Contractor of the roles and obligations under the Contract usually performed by a main contractor; The Contract shall be deemed a trade contract for the demolition works only and not a main contract; the works to be performed under the Contract shall be limited to the demolition works; the obligations of the Contractor for all matters associated with a main contractor shall forthwith cease and be deemed included in the New Contract and the Contractor's role shall be limited to that of a trade contractor with no obligations for matters, without limitation, such as CDM, design, coordination, programming; Not withstanding that the Contract shall be deemed novated ab ignitio [sic], the Employer shall within 21 days of entering into the New Contract pay the Contractor for all work undertaken by the Contractor up to the date of the Employer entering into the New Contract; the Employer guarantees to pay to the Contractor any sum due to the Contractor from the New Contractor which is not paid by reason of the insolvency of the New Contractor.”
“(a) Loss of a chance is not available as a remedy because, on the balance of probabilities, EDC would not have been able to perform the Contract in any event. This is a question of fact and Mallino accepts the Adjudicator’s decision is temporarily binding;”
“… I am satisfied that had it been successful in procuring the contract, EDC would have been able to assemble the appropriate resources and skills to perform the contract”
“(b) There is no loss of a chance as a matter of fact (because EDC would not have been appointed). This is a question of fact and Mallino accepts that the Adjudicator’s decision is temporarily binding. However, the Adjudicator held that EDC would not have been excluded at the pre-qualification stage, see paragraph 5.20 of the Decision in the Second Adjudication where he states: “I reject the submission that EDC would have been excluded at the pre-qualification stage.”
“15. In the summer of 2017, I was asked by my Managing Director at T&T to support our Bristol office in the delivery of the Bodmin Jail Hotel Project. At the time T&T Costs Management were appointed as the Quantity Surveyors for Mallino and receiving Project Management support from Phil Toghill of T&T. I became one of the project leads alongside my QS colleague Mark Rogers, with responsibility for achieving Mallino’s intended timeframes and budgets for delivery of the whole project.” “17. I held the role of project lead for the Bodmin Jail Project at T&T from October 2017 to October 2018, at which point I moved directly to the role of Managing Director at Mallino where I continued my work on the Bodmin Jail Project, now acting as the client rather than one of the client’s appointed professional consultants. 18. In October 2021, I was promoted to my current role of CEO of Mallino.”
“Q. The point I’m focussing on at the moment, Mr Cox, is the wording of clause 2.1, which you’ve agreed was drafted by EDC A. It is, yes. Q. And the proposition I’m putting to you is that it would make no commercial sense for EDC to propose this clause and thereby require its participation in this retender process if it thought it had no prospect of carrying out those works, would it? A. I can only assume it was drafted by a solicitor, not by a contractor.”
“Mallino breached Clause 2 of the Variation Contract when it failed to re-tender the Section 3 Works.” that Timur Gorman still does not understand how the Variation Agreement was intended to be operated. At paragraph 44 of his Witness Statement he states: “44. I understand that it is EDC's position in these proceedings that Mallino failed to carry out re-tendering exercise for the works. Mallino did in fact go through a tender process, which involved several potential companies and lasted for several months and ultimately concluded with the appointment of PIN CM.”
“… we never intended for EDC to carry out the construction works. We were aware that they had submitted a price for the purpose of the contract but this was not an attractive proposition for us”
“Was a conventional new build project for a construction contractor to price and ultimately to construct.”
“EDC'S PRIOR EXPERIENCE 3.14 I understand that Mallino has previously suggested that it had concerns about EDC's alleged lack of experience in undertaking building works and that was a crucial factor in it appointing an alternative contractor to undertake the Section 3 Works. 3.15 As confirmed at the start of this witness statement, I have been a director of EDC since 1998. I am therefore able to explain EDC's prior experience in delivering a project like the one at Bodmin Jail. 3.16 Whilst EDC is a specialist demolition contractor, the company also delivers complex building projects. Had EDC been given the opportunity to re-tender the Section 3 Works, I would have worked with the team to ensure that further details of its building experience were included to support the re-tender.”
“This list of issues has been agreed by the parties for use at trial. It is intended to reflect the main issues in the case so as to provide an agenda for the trial of this matter, but is not intended to repeat the pleadings or to constrain the parties' entitlement to raise pleaded issues at trial. Mallino’s primary case is that the claim and counterclaim may be determined by resolution of a legal question as to the correct measure of EDC’s loss and that, as such, there is no need for the Court to consider the underlying facts. That case is put forward on the basis that, save as expressly put in issue, the Adjudicator's findings are temporarily binding on the parties. If Mallino is correct about this, it says that issues 4 and 6-10 below will ultimately not be relevant. For the avoidance of doubt, EDC does not agree with that analysis. Its case is as per the next paragraph. EDC’s case is that, in order to determine the claim and counterclaim, it will be necessary for the Court to consider the factual background. EDC’s position is therefore that all issues set out below are relevant and will need to be determined. For the purposes of these proceedings, the following facts are assumed to be correct: (i) the Contract and the Variation are a single overarching contract; (ii) Mallino was in breach of clause 2 of the Variation for failing to tender section 3 of the Works; and (iii) the letter of22 November 2019 particularised at paragraph 13 of the Particulars of Claim was ineffective as a termination notice.”
“In applying the usual minimum obligation principle there are two qualifications that must be borne in mind. The first is that, while a particular performance may be the least burdensome to the defendant when judged solely according to the contract, this may not be the basis upon which damages are assessed because the courts judge the defendants least burdensome performance by taking all other potential losses into account, The classic expression of this was in Lavarack v Woods of Colchester Ltd, where Diplock LJ said, ‘.one must not assume that he [the defendant] will cut off his nose to spite his face and so [act] as to reduce his legal obligations to the plaintiff by incurring greater loss in other respects.’ The decision in Bold v Brough, Nicholson and Hall Ltd 65 is probably best explained on this basis. There the claimant, who had been wrongfully dismissed by the defendant, claimed for the loss of pension rights. Phillimore J held that the claimant should be compensated for this loss even though the defendant had the right to terminate the pension scheme on notice because it was unlikely that it would have taken a step so disastrous to its relations with all its employees solely to defeat a claim by this plaintiff.’ The second qualification is that where, on the construction of the contract or by reason of an implied term, the defendant’s discretion should be exercised reasonably, damages will be assessed on the basis of the defendant’s minimum reasonable performance. In Abrahams v Herbert Reiach Ltd, the defendants, a firm of publishers, agreed with the claimants, authors of a series of articles on athletics, to publish the articles in a book, paying the authors 4d for every copy of the book sold. The number of copies to be printed and other details regarding the publication were left to the publishers’ discretion. They refused to publish the book. In an action for breach of contract, the Court of Appeal seems to have held that damages should be assessed on the basis not that the defendants would have published the minimum number of copies that could be described as a publication, but rather that they would have printed the minimum number that was reasonable in all the circumstances.”
“… What are the damages to which the respondents are prima facie entitled? The general rule is that stated by Parke B. in Robinson v. Harman (1) : “Where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.”
“69. There was clearly a consensus between the members of the court that, in relation to alternative methods of performance, the claimant will be unable to rely upon the defendant performing the contract in the more onerous of the two or more ways permitted. But that was not the type of contract under consideration in Abrahams and it is not the type of contract which we have to deal with in this case. Where there is only a single obligation to be performed it is clear that the majority view was that an assessment of damages should not, as a matter of law, be limited strictly to what was the minimum level of performance permitted under the contract but should extend to a calculation of how the contract would have been performed at the relevant time had it not been repudiated. This will take into account the likely profitability of the contract and any other relevant facts that would have influenced the method of performance.” “96. The cardinal principle of any assessment of damages for breach of contract is that the innocent party (the claimant) is entitled to be put in the same position as he would have been in if the defendant had not broken the contract. This requires a careful analysis of the contract. Subsidiary general rules have been developed for measuring damages in different types of case, although there may be a need for caution to see that they are not applied mechanistically in particular situations where to do so would defeat the cardinal principle. As the case law shows, there is a wide range of possible permutations which may affect the right way to assess damages. They include the following, although not every case falls neatly into one of them: 1. The contract requires the defendant to do X or Y. 2. The contract requires the defendant, if he has not done X, to do Y. 3. The contract requires D to do X and the claimant has a reasonable expectation that he will do Y. 4. The contract requires the defendant to do X and allows him a discretion how he performs the obligation.” “131. Although in Lavarack v Woods Lord Denning was in a minority in his analysis of the contractual position between the parties, he was in my respectful opinion right in his citation of Abrahams v Reiach as authority for the proposition that where a contract imposes a single obligation, rather than alternative obligations, compensation is to be based on the probabilities of the case - on the remuneration which the claimant might reasonably be expected to receive - and not on the bare minimum necessary to have amounted to performance of the contract.”
“68. The judge preferred British Gas’s submissions on this issue. He cited the decision of this court in Durham Tees Valley Airport Ltd v Bmibaby Ltd[2010] EWCA Civ 485 , [2011] 1 All ER (Comm) 731, a case in which the defendant airline had contracted to base and fly two aircraft from the claimant’s airport over a 10 year period but had subsequently repudiated that contract. The defendant argued that the damages for repudiation should be nominal because the contract did not specify the number of flights required or passenger numbers to be carried and that, in the absence of any minimum requirement, the claimant had suffered no loss. That argument was rejected. The Court of Appeal held that when assessing damages, the court had to make an estimate of how the contract would have been performed if it had continued. 69. Patten LJ said: “79. ... The court, in my view, has to conduct a factual inquiry as to how the contract would have been performed had it not been repudiated. Its performance is the only counter-factual assumption in the exercise. On the basis of that premise, the court has to look at the relevant economic and other surrounding circumstances to decide on the level of performance which the defendant would have adopted. The judge conducting the assessment must assume that the defendant would not have acted outside the terms of the contract and would have performed it in his own interests having regard to the relevant factors prevailing at the time. But the court is not required to make assumptions that the defaulting party would have acted uncommercially merely in order to spite the claimant. To that extent, the parties are to be assumed to have acted in good faith although with their own commercial interests very much in mind.” 70. Toulson LJ agreed and identified a number of possible permutations: “96. The cardinal principle of any assessment of damages for breach of contract is that the innocent party (the claimant) is entitled to be put in the same position as he would have been in if the defendant had not broken the contract. This requires a careful analysis of the contract. Subsidiary general rules have been developed for measuring damages in different types of case, although there may be a need for caution to see that they are not applied mechanistically in particular situations where to do so would defeat the cardinal principle. As the case law shows, there is a wide range of possible permutations which may affect the right way to assess damages. They include the following, although not every case falls neatly into one of them: 1. The contract requires the defendant to do X or Y. 2. The contract requires the defendant, if he has not done X, to do Y. 3. The contract requires D to do X and the claimant has a reasonable expectation that he will do Y. 4. The contract requires the defendant to do X and allows him a discretion how he performs the obligation.” 71. The judge considered that the present case, like the Durham Tees Valley Airport case, was with Toulson LJ’s category 4 and that if, contrary to his views on the first two preliminary issues, the Sellers were indeed under an obligation to track the decline of the Reservoirs by the service of Variation Notices, the case was one in which they had a discretion as to how they would perform. It was therefore necessary, as a matter of fact, to investigate this issue.” “79. ... The court, in my view, has to conduct a factual inquiry as to how the contract would have been performed had it not been repudiated. Its performance is the only counter-factual assumption in the exercise. On the basis of that premise, the court has to look at the relevant economic and other surrounding circumstances to decide on the level of performance which the defendant would have adopted. The judge conducting the assessment must assume that the defendant would not have acted outside the terms of the contract and would have performed it in his own interests having regard to the relevant factors prevailing at the time. But the court is not required to make assumptions that the defaulting party would have acted uncommercially merely in order to spite the claimant. To that extent, the parties are to be assumed to have acted in good faith although with their own commercial interests very much in mind.” “96. The cardinal principle of any assessment of damages for breach of contract is that the innocent party (the claimant) is entitled to be put in the same position as he would have been in if the defendant had not broken the contract. This requires a careful analysis of the contract. Subsidiary general rules have been developed for measuring damages in different types of case, although there may be a need for caution to see that they are not applied mechanistically in particular situations where to do so would defeat the cardinal principle. As the case law shows, there is a wide range of possible permutations which may affect the right way to assess damages. They include the following, although not every case falls neatly into one of them: 1. The contract requires the defendant to do X or Y. 2. The contract requires the defendant, if he has not done X, to do Y. 3. The contract requires D to do X and the claimant has a reasonable expectation that he will do Y. 4. The contract requires the defendant to do X and allows him a discretion how he performs the obligation.”
“The Court is familiar with the principles governing loss of a chance: if the Court finds that the minimum contractual obligations principle does not apply then it will need to consider what might have happened had the retendering exercise anticipated by the variation agreement taken place. If it finds that Mallino might have awarded the contract to EDC then it may award damages in that regard discounted by a percentage to reflect the Court’s analysis of the probability of EDC being awarded the work.”
“Q. Yes, but we can see, can’t we, throughout all of these documents, that budget is a major consideration and steps are trying to be taken to keep the project within budget? A. Absolutely. I can give you even more amazing fact. Q. Can you just answer the question A. Yes. Q. Yes, is your answer? A. Yes.”
“Having discussed this at length with the Group Leader for the Historic Environment (Planning)Team, Colin Sellars, it is requested that a detailed specification of how the supports are proposed to be reinstated, is submitted to me for assessment and comment, so that further consideration can be given to an appropriate course of action. Whilst instigating formal enforcement action and/or prosecution proceedings is usually the least preferred option where negotiations and mitigation measures can go some way to alleviate the harm caused, the impact of the unauthorised works and the manner in which it has been carried out is extremely serious.”
“The events extraneous to the contract, upon the occurrence of which the legal obligations of the defendant to the plaintiff thereunder are dependent, may include events which are within the control of the defendant: for instance, his continuing to carry on business even though he has not assumed by his contract a direct legal obligation to the plaintiff to do so. Where this is so, one must not assume that he will cut off his nose to spite his face and so control these events as to reduce his legal obligations to the plaintiff by incurring greater loss in other respects. That would not be the mode of performing the contract which is "the least burthensome to the defendant.”