William Clark Partnership Ltd v Dock St Pct Ltd

Queen's Bench Division (Technology & Construction Court)

16 October 2015
Case Analysis
Where Reported
[2015] EWHC 2923 (TCC); 163 Con. L.R. 117; Official
Transcript;
Case Digest
Subject: Construction law Other related
subjects: Contracts; Damages
Keywords: Breach of contract; Causation; Causation;
Construction contracts; Deductions; Loss; Professional
negligence; Project managers; Quantity surveyors
Summary: The court determined issues arising from a
contractual dispute between a construction company and a
company providing quantity surveying and project
management services.
Abstract: The claimant company sought the balance of
professional fees due under a deed of appointment with the
defendant construction company.

The claimant had provided quantity surveying and project

management services for the defendant's development
project. The deed entitled the claimant to invoice 65 per cent
of the total fees at completion of the tender stage, with the
balance due in instalments. The defendant was dissatisfied
with the services provided, stating that there had been
considerable overspend on the project. The claimant
contended that it had provided the services required and was
entitled to payment. The defendant counter-claimed for
repayment of a sum already paid, or a deduction, by
abatement or otherwise, from any sum payable, and for
damages for breach of contract and/or professional
negligence. It also claimed that unnecessary variations had
been made to the works by the claimant. The issues were (i)
in respect of breach, causation and loss in relation to the
pre-construction, construction and post-construction phase
services, and the unnecessary variations claim; (ii) whether
the contractual trigger point for payment under the deed of
appointment had been satisfied; and (iii) the defendant's
entitlement to a deduction in relation to any non-performed
or defectively performed services.
Held: Judgment accordingly.
(1) The pre-construction phase was from project inception
through to entry into a contract. The services included
preparation of specification documents and an estimate of
construction costs for the chosen design scheme, and advice
on any design scheme change cost implications. The claimant
was alleged to have failed to ascertain the defendant's
budget, to provide a final cost plan or to advise regarding a
competitive tendering process. However, the defendant had
not made out a case regarding any relevant loss or damage
as a result of any breach in relation to that phase (see paras
3.1 to 3.27 of judgment). The heart of the defendant's case
was in the context of the construction phase. The claimant's
performance of its obligations was seriously deficient. It
failed to give appropriate advice regarding the design process
costs implications and to properly analyse or report on the
final account. However, the allegations were not fully
particularised by the defendant and it was not appropriate to
make any finding of widespread breach. The defendant's
case, albeit a claim for damages for professional negligence,
had the essential characteristics of a global claim, in that it
identified numerous breaches by the claimant which were
said to be potential or actual causes of cost overrun, without
any detailed particularisation of the causal connection
between the individual breaches and the whole or part of the
overrun, Walter Lilly & Co Ltd v Mackay [2012] EWHC 1773
(TCC), [2012] B.L.R. 503 considered. The defendant's
fundamental difficulty was that it had failed to prove, on the
balance of probabilities, that no substantial part of the
overrun would have been incurred in any event. It was not
self-evident that a substantial overrun could only have been
caused by failings attributed to the quantity surveying and
project management operations. The defendant had not,
therefore, made out its case on causation in respect of the
total cost overrun, Walter Lilly applied (paras 6.1 to 6.33).
The defendant's unnecessary variationsclaim succeeded, but
only to a limited extent (paras 7.1-7.39). It had also suffered
real loss as a result of the claimant's breach in relation to
post-construction phase services, but again only to a limited
extent (paras 9.1 to 9.10). (2) Completion of the tender
stage was to be equated with completion of the pre-
construction services, which the claimant had substantially
performed. It was therefore entitled to payment of the
balance of its fees, subject to a deduction in relation to the
variations and post-construction phase services. The
defendant had failed on the most substantial allegation of
non-performance, the failure to undertake a competitive
tender, and the claimant's established failures were not so
significant so as to justify a finding that it had not
substantially performed the pre-construction phase services.
In those circumstances, and subject to the defences of
deduction by abatement or otherwise and/or set off, the
claimant had established its entitlement to its remaining fees
and there was no basis for repayment of sums already paid
(paras 4.1 to 4.5). (3) In respect of pre-construction phase
services, it was only necessary to consider deduction in
relation to the failure to prepare a cost plan. It was open to
the defendant to contend that the services were not properly
performed, but it could not defend itself by contending that
all, or some specific part, of the services were performed, but
not properly in every material respect, so as to seek a
reduction in the price payable for the whole or specific
part, Multiplex Constructions (UK) Ltd v Cleveland Bridge UK
Ltd [2006] EWHC 1341 (TCC), 107 Con. L.R. 1 applied. The
defendant's claim to entitlement to deduct the costs of the
failure to prepare a costs plan had to fail. It was entitled to
make a deduction in relation to the construction phase
services, for the claimant's breach of its obligations to
provide monthly cost reports. That was a serious failure of a
basic obligation any professional quantity surveyor would be
expected to provide. It was not appropriate to make any
further deduction in relation to post-construction phase
services (paras 5.1 to 5.11, 9.1 to 8.5, 10.1 to 10.2).

Judge: Judge Stephen Davies

Counsel: For the claimant: Lucy Colter. For the defendant:
Justin Mort QC.
Solicitor: For the claimant: Kennedys Law LLP (Manchester).
For the defendant: Harrison Drury (Preston).