In the High Court of Justice
Technology and Construction Court
Before: His Honour Judge Hicks QC

Between

Serck Controls Limited

Claimant

- and -

Drake & Scull Engineering Limited

Defendant

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Date of Judgment: 12 May 2000

Karen Gough for the Claimant (Solicitors: Shoosmiths, Reading)
Andrew Burr for the Defendant (Solicitors: Hacking Ashton, Newcastle under Lyme)

 

His Honour John Hicks QC

 

Introduction

1. Between June 1995 and about January 1997 (following practical completion on 20 December 1996), with a break between early August and early October 1996, the Claimant ("Serck") carried out design and installation work for the Defendant ("DS") on a control system at a site at Springfields, Preston, Lancashire, having started design in November 1994. That work was part of the construction of a replacement research and development facility for British Nuclear Fuels Limited ("BNFL"). Had the chain of contracts originally envisaged all been entered into the main contractor to BNFL would have been Wimpey Construction Limited ("Wimpey"), later replaced by Tarmac Construction Limited ("Tarmac"), the mechanical and electrical engineering ("M & E") sub-contractor would have been DS, and its sub-sub-contractor for building services control systems would have been Serck.

2. In the event there may well have been such a main contract - its existence or otherwise was not explored before me - but it appears that there never was an M & E sub-contract, although that again was not formally established. Whether there was a contract between DS and Serck was an issue in these proceedings, the former contending for and the latter against its existence. That issue was the subject of a trial before Mr Recorder Marrin QC and was resolved in favour of Serck. Both parties have since amended their pleadings in the light of that decision, and it is now common ground that Serck is entitled to be paid by DS a reasonable sum for the work done by the former at the request of the latter. It remains to quantify that sum.

3. Since the hearing before Mr Marrin was part of the trial of the case I take into account as facts no longer open to question the relevant findings in his judgment. Those particularly material to the issues before me may be summarised as follows:

(1) A price of £475,000 was agreed on 12 October 1994 (paragraph 32).

(2) By the same date there was agreement as to the scope of the works; they were to include "power wiring" (meaning high voltage cabling to motors and other plant), but not "small power wiring" (meaning 240v cabling to sockets or fused spurs) (paragraphs 35, 36).

(3) There was no agreement on programme, which was important because of the intention to include a liquidated damages clause (paragraph 43).

(4) There was no agreement on terms and conditions; a "formula" had been agreed, but there was obvious room for dispute as to its application (paragraphs 46, 59).

(5) The parties did not intend to be bound until the detailed terms of the sub-contract had been negotiated, but recognised the value of agreeing a letter of intent meanwhile so as to protect Serck's position in respect of payment and to allow the job to proceed (paragraph 63).

(6) There was therefore no contract on 12 October as contended in the Defence (paragraph 64). Nor was there one on or by 18 May 1995, as contended in the alternative (paragraph 68).

(7) By the time Serck began design work it had been offered a letter of intent, which was issued by DS in agreed terms on 1 December 1994 (paragraphs 26, 62).

4. I have so far accepted and adopted the terminology of "contract or no contract" in the sense used throughout by the parties and generally current, with its assumed dichotomy between the coming into existence of the formal contract towards which the parties were negotiating and the absence of any contractual relationship of any kind between them. In the interests of brevity it is convenient to continue using that terminology for the time being, but it must be clearly understood that that is without prejudice to the question, which I shall in due course address, whether the relationship was indeed devoid of all contractual content.

 

The issues

5. In order to explain the formulation of the issues to be tried at the hearing before me which commenced on 24 January 2000 it is necessary to begin with a short description of the pleadings. The Re-re-amended Statement of Claim is a very brief document, setting out in paragraphs 1 and 2 the nature of the parties' businesses, containing in paragraph 3 the averment that Serck carried out the relevant work, alleging in paragraphs 4 and 5 the absence of a contract and the right to payment of a reasonable sum, asserting in paragraph 6 that a reasonable sum is £1,732,737.22, made up in accordance with the Scott Schedule, and giving credit in paragraph 7 for £419,305.65 already paid.

6. The Re-amended Defence pleads that paragraphs 1 to 5 of the Re-re-amended Statement of Claim "are generally admitted". It agrees as to the total already paid and alleges that that was a reasonable sum for the work done. "Without prejudice" to the general admission it makes the following material averments:

1.2 [DS] contends that it is wholly inappropriate for [Serck] to be remunerated on anything other than normal and/or usual industry rates for the types and/or categories of work actually undertaken;

1.3 In so far as [Serck] seeks hereafter to contend that it has suffered delay, disruption and/or difficulty in the carrying out of its work, it is expressly denied that the same forms any recognisable part of [its] case as presently pleaded;

1.4 [DS] will refer to the ... judgment of the learned Deputy Recorder .... and, in particular, to numbered paragraphs 32, 33 and 64 thereof, in which he makes findings as to an oral agreement between the parties .... as to a price of £475,000 for the then agreed scope of work;

1.5 [DS] will contend that the said agreement cannot be ignored in the assessment of a reasonable sum for the work actually carried out by [Serck], but, rather, must amount to useful evidence in the assessment thereof.

7. The detail of the parties' case is contained in a Scott Schedule, divided into three sections. The layout and purpose of Sections 2 and 3 are described in the Claimant's introductory narrative which constitutes Section 1 as follows:

Section 2 is divided into two parts. Part 1 contains the Primary Instructions [which] represent the primary elements of the works undertaken by [Serck]. Part 2 comprises sheets ... particularising those values which have been allocated to Section 3 instructions.

 The Primary Instructions in Section 2 Part 1 identify which elements of the Claimant's total value [are] ... allocated into Section 3 and which element of total value is a balance. Any balance represents the value of the Primary Instruction alone and as such appears against the Primary Instruction numbers in Section 3.

8. This distinction between "allocated" elements and "balances", making up the "total values" of the primary instructions, is clearly of importance in the organisation of the Scott Schedule, although the terminology is not consistently employed; "assessed" is often used, apparently to mean the same as "allocated", and similarly "residual" for "balance". In the course of settling their respective contributions to the schedule the parties, with their lawyers and expert witnesses, have obviously become accustomed to this classification, and seem to find it meaningful. I have not found it so easy to do so. My impression from discussions at interlocutory hearings was that a distinction was to be drawn between the "ordinary" value of compliance with an instruction and any additional charge attributable to special circumstances; that does not appear to be usually the criterion, although the effect to be attributed to "zero" items, to which I shall come, is closely related. There could also be the original contract works and "extras" or "variations"; that does sometimes, but not always, appear to be a feature.

9. So far as I can judge, what seems in fact to have happened is that every communication from or action by DS which could be regarded as an instruction or as affecting the work is listed in Section 3 and then (if not itself a primary instruction) linked with one or more of the primary instructions in Section 2. If that is right the question will need to be addressed, in regard to some at least of the primary instructions, whether the "balance" is indeed merely a "residual" sum, incapable of separate evaluation, so that quantification must perforce ignore the constituents and move directly to the total, or whether it can and should be assessed, in the words of the narrative quoted above, as "the value of the Primary Instruction alone" and added to the assessed value of the "allocated elements".

10. There are 310 items in all. They may be grouped as follows. Item 1 is the invitation to tender and is included in the primary instructions. Items 2 to 35 concern the concept and requirements in accordance with which Serck's design had to be developed. Items 36, 91, 92, 98, 100, 119, 173, 303 and 304 are the remaining primary instructions. The other items relate to "allocated sums".

11. Of the primary instructions item 36 is for the initial design work, item 91 for the main installation, item 303 for leaving the site in August 1996 and item 304 for (i) preparing a schedule of the work outstanding on returning to site and (ii) work done thereafter. The remaining items are for miscellaneous more specific charges.

12. Against that pleading background the issues formulated for trial were:

(1) Did instructions 1 to 35 .... constitute the concept design from which [Serck] developed its detailed design of its work on the project?

(2) Did each of the 310 items ... amount to effective instructions and/or requests from [DS] to [Serck] affecting [Serck's] work on the project?

(3) Was the effect of each of the said instructions and/or requests in terms of timing and circumstances of the work that pleaded in Section 3 .... by [Serck], or [DS], or was it some other, and if so what, effect?

13. This was at times referred to as a trial of liability. That was strictly a misnomer; on the pleadings liability is not in issue and all that remains is quantum. The use of that word was, however, explicable as an attempt to draw a distinction between quantification in a strict sense, which is not at this stage for decision, and preliminary matters which are, such as the factual questions raised in issues (1) and (2) and questions of principle going to the measure of value to be applied. In the event, however, the evidence called and subjected to cross-examination on both sides did cross the boundary into quantification in one respect, namely the number of hours reasonably required for design and commissioning, and it was agreed that that should be added to the issues to be determined by me in this judgment.

14. I propose to address these issues in the following way. I shall first deal with issue (1) which, for reasons which will appear, can be disposed of very briefly. Under issue (2), next, I must make a finding as to each item, so far as still in dispute. Issue (3) requires a rather different approach, since within it arise most of the more general questions. I list them here, but shall address them immediately after dealing with issue (2) and before turning to the items requiring individual attention under issue (3). They are as follows:

(1) Should the sum due to Serck be assessed by reference to the value of the work to DS or to what would be reasonable remuneration to Serck for executing it?

(2) What are the relevance to and effect on the assessment of the Recorder's findings on the trial before him, in particular of findings (1) and (2) (paragraph 3 above), and of DS's contentions in paragraph 1.5 of the Re-amended Defence (paragraph 6 above)?

(3) What are the relevance to and effect on the assessment of Serck's allegations as to the site conditions and other circumstances in which the work was executed, including the conduct of DS, and of DS's contentions in paragraphs 1.2 and 1.3 of the Re-amended Defence (paragraph 6 above)?

(4) Is DS entitled to any deduction from the sum otherwise due to Serck for loss to DS incurred by reason of Serck's conduct.

(5) How, if at all, should the "zero" items in the Scott Schedule enter into or affect the assessment?

(6) In relation to those of the Primary Instructions to which it is relevant, the question posed in paragraph 9 above.

(7) Is Serck entitled to any payment for leaving the site?

(8) Is Serck entitled to payment under either or both of the heads claimed in connection with returning to site?

Finally, I shall address the additional question, added by agreement, as to the hours required for certain tasks (paragraph 13 above).

 

The concept design

15. Shortly before the opening of the trial it was agreed between the parties that the question in issue (1) should be answered in the affirmative, and I accordingly do so. I therefore find that instructions 1 to 35 constituted the concept design from which Serck developed its detailed design of its work on the project.

16. It follows, in my view, that instruction 36, the letter of intent of 1 December 1994, which next followed instructions 1 to 35, incorporated that concept design in directing Serck to:

.... proceed with all necessary pre-commencement design and enabling works and the placing of orders for major plant, sub-contractors, equipment and any other matters deemed necessary to enable you to meet your programme obligations.

17. Since there was no contract it also follows that in so far as that concept design was inconsistent with the scope of works agreed in October 1994 it superseded it. For the same reason, however, it was itself not written in stone but subject to alteration by subsequent instructions; in particular it is not necessarily the case that instruction 91, the letter of 27 April 1995 authorising installation work, incorporated precisely the same concept design. I accept Mr Challenger's evidence that the design for this facility changed significantly.

18. In the case of many of the items in dispute under issue (2) the question turns on whether Serck was being required to alter what it had already properly done or simply to correct a departure from what it should have done. (It should be noted that although in the evidence and submissions this often extended to disputes about whether there was or was not an addition, such disputes are irrelevant to a quantum meruit claim. Serck is entitled to be paid once, and only once, for all the work it was required to do, and it matters nothing whether that requirement derives from an original specification or concept design or was added later. It is only instructions which affect work already done which raise the present point.) In such cases DS commonly identifies what Serck should have done by reference to BNFL's specification. On day 3 of the trial there was some discussion about the effect of DS's answer to issue (1), and Mr Burr made it clear that allegations by DS of non-compliance with BNFL's specification should now be read as referring to the agreed concept design, and that he would be happy to amend to that effect. There has, however, been no amendment identifying, in each instance, with which element of the concept design Serck is alleged not to have complied. An assumed blanket amendment to the effect that every reference to BNFL's specification should be replaced by one to the concept design does not establish the necessary factual identity between the relevant item in the specification and any specific part of Serck's responsibilities as originally comprised in the concept design, with any subsequent modifications. That link requires evidence, if not admitted, and it must be a question in the case of each such item whether Serck admits the applicability of the specification (for example by couching its own closing submissions by reference to it, as it often does) or, if not, whether DS can and does point to such evidence.

 

Instructions

19. Issue (2) asks whether each of the 310 items in the Scott Schedule (in fact items 36 to 310, since 1 to 35 have already been dealt with) amounted to an effective instruction or request from DS to Serck affecting Serck's work on the project.

20. It is now accepted by DS, and accordingly not in dispute, that in relation to a number of items the answer is in the affirmative. They are:

36*, 38, 41, 47, 49, 57, 59, 61, 65, 67, 68, 77, 78, 81, 88 to 90, 91*, 92, 98, 100, 118, 125, 131, 132, 135, 143, 144, 146, 147, 157*, 163, 164, 166, 167, 169 to 172, 173*, 183, 186*, 193, 200A*, 208, 209, 213, 215, 216, 221, 226(1), (2), 227, 228, 232, 234, 240, 242*, 247, 249*, 256, 259, 260, 271 to 274, 280, 284, 285, 286*, 287 to 291, 292A, 297 to 300, 302, 305, 306, 307(2), 309.

21. In preparing this list I have used the schedules to Mr Burr's opening and closing submissions, and generally followed his "yes" or "no" answers. Where there is a qualified "yes" I have generally formed a view as to whether the qualification significantly detracts from the admission. I have included the items marked with an asterisk because, although DS's closing response is ostensibly in the negative or a significantly qualified affirmative, the reality seems to me to be either that the objection is to the accuracy of Serck's pleaded summary of the instruction rather than to the status of the original, or that while formally taking issue DS is content to proceed to issue (3), or that the objection goes to the extent of the instruction's effect rather than its existence, and is therefore to be dealt with under issue (3), rather than treated as a negative reply to issue (2). Moreover several of them were unconditionally admitted in the opening schedule, on the basis of which the trial proceeded.

22. On each of the other items I must reach a decision. In view of the number involved I shall not, with some exceptions, set out my reasons. In many instances the submissions on both sides are unspecific and repetitive and I have had to form a largely impressionistic view, but in relation to each item I have taken into account the submissions made and applied the principles set out above, in particular those in paragraph 18.

23. On that basis I simply answer "yes" in the case of the following items:

37, 39, 45, 46, 48, 50, 51, 62(1), (2), (4), (5), 63, 66, 70, 72 to 75, 80(1), 86, 87, 96, 97, 103, 104, 108, 111, 112, 116, 117, 121, 123, 124, 129, 130, 133, 134, 137, 139, 140, 142, 148 to 150, 152, 153, 155, 156, 158, 159, 165, 168, 174 to 176, 178, 179, 181, 182, 185, 190, 194 to 196, 198, 201, 202(1), (2), 206, 212, 214, 217, 219, 229 to 231, 233, 235 to 238, 243, 244, 246, 248, 250(1), 251, 252(2), 254, 257, 258, 261 to 265, 267, 268, 270, 275 to 278, 282, 283, 294 to 296, 301, 307(1), 308, 310.

24. On the same basis I answer "no" in the case of the following items:

40, 42, 43, 52, 54 to 56, 58, 60, 62(3), (6), (7), 64, 69, 71, 76, 79, 80(2), 82 to 85, 93, 95, 99, 101, 102, 105, 106, 109, 113 to 115, 120, 126 to 128, 136, 138, 141, 145, 151, 154, 160 to 162, 177, 180, 184, 187 to 189, 191, 192, 197, 199, 200, 202(3), (4), 203 to 205, 210, 218, 220, 222 to 225, 241, 245, 250(2)-(5), 252(2), (3), 253, 255, 266, 269, 279, 281, 292, 293.

25. In some cases my answer cannot be reduced to a simple "yes" or "no". They are as follows:

44 Yes, until cancelled by 46.

94 Yes, as to fume extract dehumidifiers and steam unit heaters only.

107 Yes, as to mask air system, item (4), only.

26. In relation to many of the items of "allocated" sums there will be the need, at the stage of quantification, to ensure that there is no duplication of sums awarded under the primary instructions. More specifically, however, there is a group of items, each for a fairly substantial sum, involving work for which Serck is clearly entitled to be paid under some head, but where it is not clear to me why that work is not claimed (if it is not) in the relevant primary instruction. I therefore answer issue (2) in those cases: "Yes, so far as not charged elsewhere". They are items 53, 101A, 110, 119 and 207.

27. That leaves items 226(3), 303 and 304. There are "issue (2)" questions concerning items 303 and 304, especially the former, but it is convenient to treat all the matters arising from Serck's departure from site and return as distinct topics, in the way indicated at the end of paragraph 14 above, so I shall do so.

28. Item 226(3) needs a reasoned response. It arises out of a written instruction by DS dated 6 March 1996, reading: "Carry out identification of individual cable cores as required by BNFL". The sum claimed under this item is £6,684.60. DS alleges that a further sum turns on the same issues of fact, since there is a claim under item 304 for 1008 hours spent in "snagging and ferruling" between 24 December 1996 and 21 January 1997. Ferrules are small identification tabs which can be slipped over the ends of cores before connection or, more slowly and expensively, added later, either by disconnecting and reconnecting the core or by using a type which can be clipped on without requiring access to a free end.

29. The first question is whether individual cores, as distinct from separate cables, should have been identified at both ends by ferrules when originally installed. This is a case where Serck appeals to the BNFL specification and therefore does not rely on any departure from it in the concept design. I have been given two references. Miss Gough cites a BNFL document stamped 10 December 1993 and entitled "Specification for Instrument and Electrical Panels/Cubicles for Indoor Duty". Section 20 is headed "Wiring" and paragraph 20.2 reads:

Wiring shall be identified at each end with proprietary ring ferrules to correspond with the circuit diagrams.

Miss Gough says it was Serck's view that because there was no mention of cores or of the field ends of cables this related only to the internal cabling in cabinets. I am not sure whether she is advancing that as the true construction of the paragraph, but in my view it is not. It is true that "wiring", out of context, might mean either cables or cores, but the reference to circuit diagrams strongly suggests that the latter are intended. Confining the application to internal cabling would not make much sense unless external runs were dealt with elsewhere, which was not suggested, and in any event paragraph 20.6 makes it clear that section 20 is not confined to internal wiring by referring to "connections to instruments".

30. Mr Burr cites section 7 of a document entitled "Design and Build Package" and sub-titled "E & I Specification Technical Requirements". Paragraph 7.5 deals with the technical requirements of electrical and instrument design and installation and contains the following relevant sub-paragraphs:

7.5.5 Installation and Handling of Cables ....

 

7.5.5.1 General .....

         e) Each cable shall be given a unique reference number including identification of each core. ....

 

7.5.7 Identification and Cable Markers ....

 

7.5.7.4 Cable Markers

All cables shall be identified with its [sic] Cable Number using either Critchley type 'Z' markers or alternatively Raychem TMS cable marking system with the following provisions: ....

 

7.5.7.5 Core Identification

The Contractor shall use either ferrule type markers or TMS sleeve markers as detailed in clause 7.5.7.4

That, if applicable, is conclusive. Serck's witness, Mr Leigh, accepted that it was applicable. Moreover it accords with the practical necessities of commissioning, operating and maintaining a complex structure of electrical wiring systems. For those purposes it must be possible to identify both ends of each circuit without laboriously tracing the physical continuity of each cable or testing the electrical continuity of each combination of core ends ("belling and buzzing", as electricians call it).

31. I conclude that cores should have been securely identified at both ends when originally connected. Serck is entitled to be paid for doing it, but not to make an extra charge if the work had to be done more expensively later, or if it had to be redone, unless that was the fault of someone else. Miss Gough says that it is charged for in item 91(3), at the same rate as if it had been done with the cable terminations, but in that event no further charge is justified in item 226(3) or 304. It follows that the answer to issue (2), in relation to item 226(3), must be "no", unless this is a case where the correct "total value" has been split, without double counting, between an "allocated" element in 226(3) and a "balance" in 91(3).

 

The basis of assessment

32. That brings me to the first of the general questions listed in paragraph 14 above: should the sum due to Serck be assessed by reference to the value of the work to DS or to what would be reasonable remuneration to Serck for executing it?

33. Mr Burr contends for the former, relying on statements in the authorities that a quantum meruit claim is restitutionary in nature rather than based on an implied contract, and on the conclusion drawn from that distinction in Hudson's Building and Engineering Contracts that:

.... the resulting obligation of the defendant is not to pay a reasonable price or remuneration based on cost incurred by the plaintiff, but to reimburse him for the value of the advantage, if any, received by the defendant .... (11th edition, paragraph 1.254, and similarly at paragraph 1.270).

34. A quantum meruit claim may, however, arise in a wide variety of circumstances, across a spectrum which ranges at one end from an express contract to do work at an unquantified price, which expressly or by implication must then be a reasonable one, to work (at the other extreme) done by an uninvited intruder which nevertheless confers on the recipient a benefit which for some reason, such as estoppel or acquiescence, it is unjust for him to retain without making restitution to the provider. It is clear from the passage in Hudson immediately preceding the one cited by Mr Burr that the words quoted above do not relate to the former category of case. Moreover, in one of the very passages from the authorities relied on by Mr Burr, Robert Goff J describes the basic measure of recovery in restitution as being "the reasonable value of the plaintiff's performance - in a case of services, a quantum meruit or reasonable remuneration ..." (B P Exploration (Libya) Ltd v Hunt [1979] 1 WLR 783, at p. 805D - my emphasis).

35. At the first end of the spectrum described in the first sentence of the last paragraph the measure should clearly be the reasonable remuneration of the claimant; at the other it should be the value to the defendant. In between there is a borderline, the position of which may be debatable. It is, however, unnecessary and inappropriate to conduct that debate in the abstract here if, as I believe to be the case, it is clear on which side of the line the present facts lie.

36. The letter of intent of 1 December 1994, after the instruction to proceed quoted in paragraph 16 above, continued:

In the event that we are unable to agree satisfactory terms and conditions in respect of the overall package, we would undertake to reimburse you with all reasonable costs incurred, provided that any failure/default can reasonably be construed as being on our part.

It was, rightly, not contended by DS that in this case the proviso operated to exempt it from the obligation thus undertaken.

37. In my judgment that plainly created a contractual relationship, albeit not the formal "contract" of which the existence was in dispute between the parties and was the subject of the preliminary issue. There was, moreover, an express term as to remuneration: "all reasonable costs incurred". It is true that "costs" is a very odd word, implying the exclusion of any profit element and perhaps of overheads, but it is one very commonly used in such contexts and there was no suggestion that it had any such exclusionary effect here.

38. The letter of 27 April 1995 containing what the Scott Schedule treats as the "primary instruction" under which most of the remaining work was executed read simply: "... you are instructed to proceed with all activities to achieve the contract programme". There was, of course, no "contract" in the sense intended and, as Mr Marrin found, no agreed programme, but the instruction stood and was acted upon. If, which I do not believe to be the case, there could be any doubt that in the context that imported the same obligation to "reimburse ... all reasonable costs incurred" as was expressed in the letter of 1 December 1994, that doubt was resolved by the letter of 18 May 1995 (item 100 in the Scott Schedule), which was an "official instruction" to extend the letter of intent "to cover the necessary supply, delivery, off load and installation, as may be required to complete the full controls package relative to the [BNFL Springfield site].

39. In those circumstances I have no doubt that the sum due to Serck should be assessed by reference to what would be reasonable remuneration for executing the work.

 

The Recorder's findings

40. Question (2) in paragraph 14 above asks what are the relevance to and effect on the assessment of the Recorder's findings on the trial before him, in particular of findings (1) and (2) (paragraph 3 above), and of DS's contentions in paragraph 1.5 of the Re-amended Defence (paragraph 6 above).

41. Finding (2) was that by 12 October 1994 there was agreement as to the scope of the works. Mr Marrin made no comprehensive findings, however, as to the content of the works so agreed, so it would be impossible to treat that finding as defining the works to be carried out by Serck under the letter of intent of 1 December 1994, the instruction of 27 April 1995, and the remaining instructions affecting the work for which Serck is entitled to be paid, even if it were contended that that should be the starting point. But it is not; the starting point is the agreed answer to issue (1), that instructions 1 to 35 constituted the concept design from which Serck developed its detailed design of its work on the project. Moreover, the October 1994 scope of works being unascertained, it is impossible to compare it with the agreed concept design, nor has either party attempted that task.

42. The weight to be attached to the agreement on price (finding (1)) has therefore to be assessed, not only against Mr Marrin's express findings that there was no agreement on programme or terms and conditions, but also against the fact that the works then being priced are unascertained and have not been compared either with those which Serck was instructed to design or with those carried out in the event.

43. In that light, although the first part of paragraph 1.5 of the Re-amended Defence, that the agreement on price "cannot be ignored", raises no difficulty, the second, that it "must amount to useful evidence" in the assessment of a reasonable sum for Serck's work, inevitably provokes the question "how useful?". I would accept the proposition that it is relevant evidence, but its weight has to be assessed in the way described in the last paragraph. It cannot be the starting point, subject to adjustment up or down for "variations"; first because that would be to treat it as contractual, which it is not, and secondly because there is no accessible specification, programme, terms and conditions to which it applied and from which departures can be priced. Its most likely value, I think, may be as part of a check whether the total arrived at by other means is so surprising, in all the circumstances, as to cast doubt on the route by which it was reached.

44. Mr Burr relied heavily on extracts from the judgments in Scarisbrick v Parkinson (1869) 20 LT(NS) 175, but that was a case in which a contract, concluded in every other respect, was unenforceable under the Statute of Frauds for lack of writing. Not only, therefore, does it illustrate the general reluctance of the courts to allow the statute to be used to evade clearly undertaken responsibilities; it is also distinguishable from the present case in that the price had been agreed as part of a completely concluded contractual package, intended by the parties to be binding.

45. I find more assistance in the following summary from Keating on Building Contracts, relied upon by both parties:

The courts have laid down no rules limiting the way in which a reasonable sum is to be assessed. Where a quantum meruit is recoverable for work done outside a contract, it is wrong to regard the work as thought it had to any extent been performed under the contract. The contractor should be paid at a fair commercial rate for the work done. Where a quantum meruit is recoverable for work done pursuant to a void contract, it is wrong in principle to apply the provisions of the void contract to the assessment of the quantum meruit. ... Useful evidence in any particular case may include abortive negotiations as to price, prices in a related contract, a calculation based on the net cost of labour and materials used plus a sum for overheads and profit, measurement of work done and materials supplied, and the opinion of quantity surveyors, experienced builders, or other experts as to a reasonable sum. (6th edition, p. 86).

46. I have the strong impression that DS, having lost the preliminary issue, has still not accepted the consequences of that defeat but is attempting by other means to peg its total liability at the "price" of £475,000. It can hardly be a coincidence that its "total reasonable cost" in the summary of its response to the Scott Schedule, although ostensibly arrived at as the sum of fifteen components, amounts to £474,761.96, about one twentieth of one per cent away. There are indications in its expert witnesses' reports of an approach starting from what is said to have been Serck's breakdown of the £475,000 total. In addition to the general point that that is not the nature of the issue before me Mr Marrin made no findings as to that breakdown and it is in any event notoriously unwise, even within a contract price, to rely on such a breakdown of values of particular parts of the whole. If there is to be any hope, as there should be between well-served litigants, of narrowing or resolving the quantum issues, it is essential that the quantum expert on each side, or perhaps better a joint quantum expert, has the freedom to bring an independent judgment to bear on the valuation of the work done by Serck for the assistance of the court, unhampered by the position adopted hitherto by either party or its lawyers.

 

Site conditions

47. Question (3) in paragraph 14 above concerns the relevance and effect of Serck's allegations as to the site conditions and other circumstances in which the work was executed, and of DS's contentions in paragraphs 1.2 and 1.3 of the Re-amended Defence.

48. This is closely connected with questions (1) and (2), although it carries matters a little further. Had the basis of assessment been the value to DS then the circumstances in which the work was done would have been irrelevant. Had the starting point been an agreed price then the only relevant circumstances would have been departures by DS from the basis on which that price was agreed. The issue, however, is not foreclosed in either of those ways.

49. The general answer must in my view plainly be that, on the assessment of the reasonable remuneration of a claimant for work done, the site conditions and other circumstances in which the work was carried out, including the conduct of the defendant, are relevant. It is difficult to see what considerations there are to the contrary.

50. That general answer can be made more specific by reference to paragraphs 1.2 and 1.3 of the Re-amended Defence. Paragraph 1.2 contends that it is wholly inappropriate for Serck to be remunerated on anything other than "normal and/or usual industry rates for the types and/or categories of work actually undertaken". If that means normal rates for work undertaken in the conditions which actually obtained it is atriums. If it means normal rates for work undertaken in optimum, or even "normal", conditions (assuming that normality in that respect can be defined) then if such conditions did not actually obtain there is clearly no reason why the rates should apply.

51. Paragraph 1.3 of the Re-amended Defence denies that any case of delay, disruption or difficulty in the carrying out of its work has been pleaded by Serck. The phrase "delay and disruption" has become a term of art in construction litigation by reason of its widespread use in standard forms of building contract, and is therefore best avoided in a case where there is no contract. The question is whether Serck has pleaded any case for taking into account site conditions or other circumstances, including the conduct of DS. I accept that in so far as Serck relies on such matters as being relevant to the assessment of its reasonable remuneration it must plead and prove the relevant facts. It is Serck's contention that it has pleaded those matters, in particular in the Scott Schedule items relating to "allocated sums". Part of the process of answering issues (2) and (3) is therefore to make findings as to the existence and effect of the instructions relied upon for that purpose.

 

Serck's conduct (question (4))

52. There are many evidential allegations in DS's witness statements and oral evidence going to the conduct of Serck's management, staff and sub-contractors. There are, in particular, allegations of inefficient working and of the absence of effective supervision. The question is how, if at all, such allegations enter into or affect the assessment of Serck's remuneration.

53. It is common ground that there is an undecided point of law in this area. It was expressed in this way in Crown House Engineering Ltd v Amec Projects Ltd (1989) 48 BLR 32:

I am not convinced that [any of the authorities cited] affords a clear answer to the crucial question of law: On the assessment of a claim for services rendered based on a quantum meruit, may it in some circumstances (and, if so, what circumstances) be open to the defendant to assert that the value of such services falls to be reduced because of their tardy performance, or because the unsatisfactory manner of their performance has exposed him to extra expense or claims by third parties? In my judgment, this question of law is a difficult one, the answer is uncertain and may depend on the facts of particular cases. (per Slade LJ at p. 54)

.... once .... Crown was obliged to establish its claim .... on a quantum meruit basis alone, the situation changed. ... Whether, and to what extent, Amec could rely on the matters previously pleaded as contractual cross-claims to diminish the reasonable remuneration recoverable by Crown became a matter of genuine controversy. Crown has argued, and the judge below accepted, that these matters are wholly irrelevant to the assessment of what reasonable remuneration Crown should recover. It may very well be that they are right and will ultimately be held to be so. But the answer does not seem to me to be clear and obvious. (per Bingham LJ at p. 57)

54. Does that issue, expressly left open by the Court of Appeal there, have to be decided here? There is a helpful passage for that purpose in the judgment of Mr Recorder Reese QC in Sanjay Lachhani and anor v Destination Canada (UK) Ltd (1996) 13 Const LJ 279:

If, instead of ascertaining a "market value", it is thought appropriate to calculate a "fair value" from the costs actually incurred by the person or organisation which carried out the works, then the three words highlighted above ["reasonably", "necessarily", "properly"] would provide the key to the necessary effective control over the level of reimbursable costs if the legitimate interest of the owner are also to be respected. .... If the building contractor works inefficiently and/or if the building contractor leaves defective work then, quite obviously, the actual costs incurred by the building contractor must be appropriately adjusted and/or abated to ensure that the owner will not be required to pay more than the goods and services provided are truly (objectively) worth. What is not clear is whether the value of the goods and services provided should also be adjusted if, by reason of tardy performance, the employer can demonstrate that he has incurred some extra expense or suffered some loss which would not have been incurred or suffered if the building contractor had completed the works within an objectively determined reasonable time .... . (pages 283, 284)

55. What emerges from the authorities, in my view, is that distinctions need to be drawn. If the value is being assessed on a "costs plus" basis, for example from time sheets and hourly rates for labour, then deductions should be made for time spent in repairing or repeating defective work, and for inefficient working or (as is one of the allegations here) excessive tea-breaks and the like. If the value is being assessed by reference to quantities the claimant stands to gain nothing from such activities or inactivities and, if attributable to the claimant or his sub-contractors, they are irrelevant to the basic valuation; extra time and expense enter into the picture at this stage only if relied upon by the claimant as arising without fault on his part, as discussed in paragraphs 47 to 51 above. If such a claimant makes a claim based on extra time or expense which was in truth his own fault he should fail, but that is simply an issue of fact; Serck says that it has excluded such elements from its valuations.

56. A second distinction is that between defects made good during the course of the work, which are covered by the discussion in the last paragraph, and those remaining at completion. There should clearly be a deduction for the latter, if pleaded and proved, whatever the mode of valuation, simply because the work as handed over is thereby worth less, but no such plea is advanced here.

57. The third distinction is between what I have called the "basic valuation", which is the subject of the last two paragraphs, and matters which, even if expressed in terms of a "reduction" or "diminution" of the valuation, are in essence "cross-claims", in the words of Bingham LJ in Crown House. They are in essence cross-claims because what the defendant seeks is in truth compensation for loss or expense suffered or liabilities incurred by reason of the claimant's conduct. The examples given in the above extracts are "tardy performance" and "unsatisfactory performance", but there may be others. It is, as I understand it, only to this last category that the extracts from Crown House and the last sentence of that from Lachhani above apply.

58. If that is the nature of such claims they must depend upon breach of some duty by the claimant, so the first question is as to the nature and extent of the duties owed, in the absence of express terms, when carrying out such work, and in particular duties as to progress and co-operation with other trades, for no breach of any other duty seems to be at all relevant here. There is clearly no duty to adhere to any particular contractual programme, for there is no contract, and indeed in the present case it was precisely inability to agree upon a programme which was one of the reasons for failure to enter into a contract.

59. In fact no duty of any relevant kind, nor any breach of such a duty, is pleaded or relied upon by DS (except in relation to the separate point dealt with in paragraph 84 below), nor do I understand from Mr Burr's closing submissions on the law that any cross-claim of the kind now under discussion is in the end pursued; his contention is simply that DS should not be "penalised" by inefficient working or inadequate supervision on Serck's part, or be required to pay for hours spent in rectifying defective work. These are all matters within the scope of the principles discussed in paragraphs 55 and 56 above and do not involve the issue left open in the Crown House case. I do not therefore have to decide that issue.

 

Zero items (question (5))

60. A number of the items in the Scott Schedule have no value assigned to them by Serck. Mr Burr submitted that they should therefore be disregarded. I do not find it so easy to summarise Miss Gough's position. In her written closing submission she explained these items as being instructions which had an effect, but are given a nil value as their cost is "allocated under a Primary Instruction" (presumably as part of the "residual sum"). "The instruction has a purpose in explaining the effect and its chronological sequence". She also referred to her separate submissions on "circumstances". In supplementary oral argument, however, she accepted in relation to at least one such item that it was not taken into account in her expert valuation evidence. Moreover that explanation (as indeed Mr Burr's submission to the contrary) seems directed to zero items which are allocated sums, whereas some of the Primary Instructions themselves are zero items.

61. I see no reason in principle why, for the reasons given in paragraphs 47 to 51 above, Serck should not be entitled to rely upon instructions of this kind from DS as part of the circumstances in which the work was carried out and in the light of which it should be valued; indeed, as stated in paragraph 5, Serck is obliged to plead and prove any facts upon which it relies for that purpose. Each such item must therefore be considered in order to establish whether, as pleaded, it can have had the alleged effect; if so, it is a matter of fact for evidence and findings, now or later, whether it did have the effect alleged and how that affects the reasonable remuneration which Serck should receive under some other item.

 

Valuation of residual sums

62. Question (6) in paragraph 14 above refers back to paragraph 9, which queries whether the "balance" claimed under a Primary Instruction is merely a "residual sum", incapable of separate evaluation, so that quantification can only be of the total claimed under that Primary Instruction including all associated "allocated sums", without separate assessment of each, or whether it is possible to asses the value of the Primary Instruction alone and add that to the value of each allocated element allowed.

63. By its nature this question, although in principle arising in relation to all the Primary Instructions, is of practical significance only where there are both "allocated sums" and a "residual sum" or a "balance" attributed to the same Primary Instruction. In fact, however (and I take this from DS's summary at page 2a of the Scott Schedule), items 1 and 100 are zero items and items 92, 98, 119 and 303 contain no allocated value. That leaves only items 36, 91, 173 and 304 to be considered.

64. Mr Stansfield, the general manager of Serck, gave evidence, which I accept, as to the genesis of item 36, the Primary Instruction for design work. It was to the effect that Serck's expert Quantity Surveyor witness, with Serck's engineers, went through the relevant "allocated value" instructions and assessed the time which would properly be required to comply with each. The rate provided by the expert Quantity Surveyor was then applied to those hours to give the "allocated sums", totalling £56,939.02. The £85,817.75 "total value" for item 36 is the value set on the total time spent by Mr Jenkins and others in design. The "balance" of £28,878.73 is simply the difference between those two sums and has not been separately evaluated.

65. That, as I understand it, is the basis of the evidence on both sides as well as of the pleading, except that the expert engineer witnesses rightly approach the question of time by reference not to the time sheets but to the hours properly required. There is clearly, therefore, no point in my spending any time or attention on the "allocated sums"; the only questions are what total time would properly have been required by competent designers and what are the appropriate rates. The other items linked with 36, whether zero items or priced, are relevant only to the extent that the instructions which they allege can be relied upon in the light of my answers to issue (2) in paragraphs 19 to 31 above and had an effect on the time properly required. In this instance I am asked to assess the number of hours required (although not the rates) myself, and that is therefore the basis on which I shall do so.

66. Item 91 is a large miscellaneous item, broken down into twelve sub-items. Of these (9) and (12) are zero items, (2), (6), (7) and (10) contain no allocated value and (1), (5), (8) and (11) contain no balance. Only (3) and (4) need therefore be considered.

67. Item 91(3) is entitled "Install". It consists of allocated sums amounting to £72,091.02 and a balance of £242,463.49, giving a total value of £314,554.51. The only evidence which I have found as to the genesis of these figures is a brief, unchallenged, statement by Mr Stansfield that they were measured and taken off from drawings by Mr Lowe. That suggests, although the issue was not explored, that the various allocated sums and the balance should each be capable of separate evaluation.

68. I can take items 91(4) and 173 together. The former is for equipment and the latter is the one under which Serck has charged for manufacturing panels. Item 91(4) consists of £11,053.37 allocated sums and a balance of £131,856.15, giving a total of £142,909.52. A small part of item 173, £128.13, is an "allocated sum" for design under Primary Instruction 91, but the balance of the "residual value" of £46,992.15 is for the panels. There is a further "allocated value" of £9,515.55 under other items, making a total given as £56,507.71. In cross-examination Mr Stansfield agree that 91(4) was derived from invoices. As to 173 it was put to him that it also was, broadly, based on invoices from suppliers, and he replied: "I assume that is the case, yes". It would therefore seem that in those two instances there should be no difficulty in assessing the value of the Primary Instructions alone and that of the "allocated values" separately.

69. Item 304 contains three sub-items, of which (2) is a zero item and (1) contains no allocated value, leaving only (3), which is described, rather oddly, as "site mobilisation", and which consists of £6,190.37 allocated sums and £321,126.02 balance, making a total of £327,316.39. It is concerned, in fact, with all the work, of whatever kind, carried out by Serck after its return to site in October 1996. The only cross-examination of Mr Stansfield was concerned with the total rather than with the breakdown between its constituents, so I am not in a position to make any finding at this stage on the question under discussion in this section, although I shall be considering item 304 further below.

 

Leaving the site

70. It is Serck's case that it was instructed by DS on 5 August 1996 to stop work and leave the site. It is DS's case that Serck stopped work of its own volition.

71. On 24 July 1996 there was a meeting between Mr Stansfield and DS's general manager, Mr Hewitt, each accompanied by a quantity surveyor. The subject was Serck's complaint of non-payment for work done. No agreement was reached, and on 26 July Mr Sanders, Serck's operations director, wrote what amounted to a final warning to DS. The letter referred to a meeting with counsel, complained of unwillingness on the part of DS either to conclude a contract on acceptable terms or to pay sums properly due under the letter of intent, and stated that Serck was "not prepared to commit extensive resources to complete the commissioning works on the site unless we receive by close of business on Wednesday next (31 July 1996) a further substantial payment", an appropriate amount being £250,000 plus VAT. The letter concluded with notice of intention to commence proceedings for the recovery of moneys due in the absence of further payment.

72. On 31 July DS replied. The letter is not in the bundle, but from the terms of Mr Sanders' response on 2 August was obviously a rejection of Serck's demands. Mr Sanders' letter of 2 August, a Friday, gave formal notice that Serck would cease work on Friday 9 August 1996. It continued:

In the interim, we will concentrate our efforts on completing items of work which are in hand and no further instructions for work will be accepted. Further, any work requested and not yet started will not be started.

73. Mr Kerrigan, who at that time was Serck's site manager, made the following entry in his log at 1545 on 2 August, which I accept as an accurate record:

Mr Simon [Coltman] called to advise me to downman the [site]. I downmanned the four electricians and four engineers. ... I have kept two engineers to make the [site] safe ready for finishing on the 7th of August.

Mr Coltman was Serck's commercial manager.

74. On Monday, 5 August, Mr Kerrigan wrote to Mr Sanders with an account of the events of that morning which I accept as accurate. He records that at 0805 he was asked by DS's site manager where all Serck's men were and replied that he had been instructed to downman the site except for enough men to make it safe. At 0815 he was asked by DS's and Wimpey's senior project mangers why he had no men on site and replied that it was a decision taken by Serck's directors. At 0830 the same two managers told him that he was to leave the site with his remaining personnel immediately and was not to remove anything. After discussion Serck's men were allowed to take personal items, including tool boxes and test equipment. Serck was, I believe, later allowed to return to remove other property belonging to it and there is no claim for wrongful detention of goods.

75. On that evidence I find that Serck left the site of its own accord. Although the letter of 2 August referred to completing items of work which were in hand it is quite clear that the instructions to Mr Kerrigan, on which he acted, were that nothing was to be done after 1545 on that date except what was required to make the site safe. In those circumstances DS, not surprisingly, wished to have Serck, which was not doing anything of value, off the site altogether, but that cannot turn a voluntary abandonment of the job into an expulsion.

76. In those circumstances, although there was no breach of contract on Serck's part, and no counterclaim on that basis, because it was under no contractual duty to remain, there can equally be no claim on its part for the cost of implementing its own decision to leave.

 

Returning to site

77. Serck returned to site on 14 October, despite having received no further payment. Its claims under Primary Instruction 304 and for allocated sums linked with it fall into two categories. The greater part consists of work of the same kinds as before its departure - design, installation, commissioning and the like. There can be no doubt that Serck is entitled to be paid a reasonable sum for this work, assessed on the same basis as the rest. The only matter for particular attention is the need to check that there is no duplication; in so far as any earlier item is charged for on the basis of completion of an entire task the fact that it was done partly before and partly after the break cannot entitle Serck to charge twice for any part of it.

78 There is also, however, a charge of £13,750 for site surveys carried out before the return, leading to and involving the preparation of a comprehensive schedule of outstanding work. I accept the evidence of Mr Fothergill that this was carried out by Mr Partington and himself in close consultation with DS, with a view to arriving at an agreed list of what was to be done and how long it was likely to take. That being so I conclude that a proper charge for it is recoverable. I am not, of course, concerned with its quantification.

 

The effect of the instructions

79. That brings me to the detail of issue (3), which asks whether the effect of each instruction was that pleaded in section 3 of the Scott Schedule by Serck, or by DS, or was some other, and if so what, effect. I am at this stage concerned, of course, only with those items which have survived scrutiny under issue (2) in paragraphs 19 to 31 above. Although I cannot dispose of this issue as summarily as issue (2) I shall not, in view of the number of separate items still remaining for consideration and the small amounts involved in many instances, give reasons in every case, or more than the briefest of reasons or explanations where I do. "Serck" means that I find that the effect was that alleged by Serck in the Scott Schedule and "DS" that it was the effect or absence of effect alleged there by DS. Nothing in these answers prejudges any issue of quantification proper, but as invited I do, where appropriate, indicate to what extent (expressed as a percentage) Serck has established the effect alleged where it has only partially done so.

80. It is now accepted by DS, and accordingly not in dispute, that the following items had the effect alleged by Serck:

49, 57, 59, 67, 68, 77, 88, 89, 90(1), 91(in part), 92, 96, 98(2), (3), 125, 131, 135, 143, 144, 147, 163, 164 (in part), 166, 170, 171(1), (2), 172, 183(1), 186(2), (4), (5), 193 (in part), 198 (in part), 208, 209, 216(1), 221, 226(1), (2), 227, 232(1), 234, 239, 240, 249(1)-(3), 256, 260 (in part), 271(1), (3)-(5), 272 (in part), 273(1), (2), 274(1), 276, 277(1), 284(2), 285 (in part), 286 (in part), 287 (in part), 290, 291(2), (3), 292A, 297(4), (5), 298(1)-(3), (4), (6), 2992), (3), 300(2), (3), (5), 302 (in part), 305, 307(2), 309, 310.

In relation to 92, however, Serck accepts that the claim for equipment is a duplication, inserted in error in the Scott Schedule summary.

81. On the basis explained in paragraph 79 above my answers to the remaining items are as follows:

36 Serck. Although DS formally denies the effect it is not in reality in dispute that Serck carried out substantial design work. As to the relationship between this item and the "allocated sums" linked with it see paragraphs 64 and 65 above.

37 Serck.

38 Serck.

39 Serck.

41 Serck.

44 Serck, as limited by the answer to issue (2) in paragraph 25 above.

45 Serck.

46 A zero item to be taken into account as cancelling item 44, but not otherwise; Miss Gough expressly stated in closing that this item had not been allowed for in Mr England's valuation, and was therefore not claimed.

47 Serck.

48 Serck.

50 Serck - not as to costs of attendance at meetings, which should be included within the basic allowance for design, but as to extra costs entailed by doing so before the design was sufficiently advanced.

51 Serck.

53 Serck, subject to paragraph 26 above.

61 Serck.

62(1), (2), (4), (5) Serck.

63 Serck.

65 Serck.

66 Serck.

70 Serck.

72 Serck.

73 Serck.

74 Serck.

75 Serck.

78 Serck.

80(1) Serck.

81 Serck.

86 Serck.

87 Serck.

90(2) Serck.

91(1) DS (2), (3) Serck. Although differentiated in Serck's columns of the Scott Schedule and in the summary of DS's response these two sub-items are essentially a single item, based on the instruction to "proceed with all necessary activities" given on 27 April 1995. DS accepts (3), "with the exception of commissioning", for which there is no charge under this item. As to the relationship between this item and the "allocated sums" linked with it see paragraphs 66 to 68 above.

94 Serck, as limited by the answer to issue (2) in paragraph 25 above. This is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

97 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

98(1) Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

100 Serck. This and 91(2), (3) should be read together. See paragraph 38 above.

101A Serck, subject to paragraph 26 above.

103 Serck.

104 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

107 Serck, as limited by the answer to issue (2) in paragraph 25 above. This is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

108 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

110 Serck, subject to paragraph 26 above.

111 Serck, as to (3); DS, as to (1), (2), (4). This is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

112 Serck; this is an instruction to proceed with installation, notwithstanding that "the areas are very congested with tray and ductwork". That is therefore one of the circumstances to be taken into account in accordance with paragraphs 47 to 51 above. The item is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

116 Serck; since there was no contractual programme, instructions to "re-assess" and discuss progress caused additional work.

117 DS; Serck called no evidence as to the genesis or effect of the alteration to the relevant drawing.

118 Serck.

119 Serck, subject to paragraph 26 above.

121 Serck.

123 Serck.

124 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

129 Serck; a "programming" instruction subject to the same considerations as 116.

130 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

132 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

133 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

134 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

137 Serck; this is claimed as an "allocated sum" under item 36, and is therefore subject to paragraphs 64 and 65 above.

139 Serck.

140 Serck.

142 Serck.

146 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

148 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

149 Serck.

150 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

152 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

153 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

155 Serck.

156 Serck; although classified as design this is properly claimed as additional work allocated to item 91.

157 Serck, except as to the word "increase" in sub-items (4) and (5); whether the changes caused an increase or decrease in the costs of installation, commissioning and validation is a quantification issue. 158 Serck; although classified as design this is properly claimed as additional work allocated to item 91.

159 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above, and omitting safety barriers, which Serck admits are a duplication of item 61.

164 Serck; this item is in substance accepted by DS, since its qualifications as to commencement and completion dates are of no significance.

165 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

167 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

168 Serck; this and 167 should be read together.

169 Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

171(3) Serck, as a zero item.

173 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above. The "panels" element is not in substance disputed by DS, subject to quantification.

174 Serck, as to sub-item (2). Sub-item (1) is dealt with in paragraphs 82 to 85 below.

175 DS; this is on its face a "programming" instruction subject to the same considerations as 116, but on that basis it must either carry its own charge or fall - to include it as a zero item leads nowhere.

176 Serck; although classified as design this is properly claimed as additional work allocated to item 91.

178 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

179 Serck, subject to its admission as to partial duplication with 91(3).

181 DS; The letter relied upon by Serck does not require attendance at a meeting, and the issue as to DS's request for a list of outstanding unfurnished information turns on whether there had been an earlier request by Serck, as to which it has produced no evidence.

182 Serck; although classified as design this is properly claimed as additional work allocated to item 91.

183(2)-(4) Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above. This leaves an admitted credit for installation against item 91.

185 Serck; I am sorely tempted to order both parties to pay substantial sums to the Society for the Protection of the English Language as a penalty for the refusal of almost everyone concerned, from beginning to end, to learn how to spell "fluorine" and its derivatives, but have reluctantly come to the conclusion that I have no jurisdiction to do so. (The most striking exceptions are by employees of other parties - Mr Scott Higgins of Glasins and Mr Dewhust of BNFL.)

186(1) Serck; this goes with sub-item (2), which DS accepts.

186(3) Serck, but as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

186(6), (7) Serck; in principle these go with sub-items (4) and (5), which DS accepts - whether any increased cost was involved is a quantification issue.

190 Serck.

193 Serck; DS accepts the design element and in principle the claims for commissioning and validation follow - whether any increased cost was involved is a quantification issue.

194 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

195 Serck.

196 Serck.

198 Serck; DS accepts the installation element (94% of the total) to the extent that it is not measured elsewhere, but there merely restates the general exclusion of double-counting which applies throughout. The other elements go with it - whether any increased cost was involved is a quantification issue.

200A Serck, but although I have treated this item as admitted by DS under issue 92), and it is not therefore mentioned in paragraph 26 above, it should be dealt with in the same way as the items which are listed there.

201 Serck.

202(1), (2) DS; the claim is confined to commissioning, which does not arise out of these sub-items.

206. Serck.

207 Serck, subject to paragraph 26 above.

212 Serck.

213 Serck; DS accepts this item, but alleges that it is a duplication - that is a quantification issue.

214 Serck.

215 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

216(2) - (4) Serck.

217 Serck; this is an instruction to observe specified break times in "permit to access" areas. That is therefore one of the circumstances to be taken into account in accordance with paragraphs 47 to 51 above, albeit this is itself a zero item.

219 Serck; this is also an instruction as to restrictions on access, and therefore one of the circumstances to be taken into account in accordance with paragraphs 47 to 51 above.

228 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

229 Serck.

230 Serck.

231 The nature of this item is not clear. In so far as it is a claim, or part of the claim, for production of the manuals themselves, Serck is obviously entitled to be paid for that and the only question is whether there is any duplication; DS says there is, but its reference to A7/5 is wrong and in any event that is a quantification issue. In so far as it is a claim for additional payment for draft manuals demanded prematurely, which is what Serck's letter of 27 June 1996 suggests, Serck does not refer me to any evidence and the claim therefore fails.

232(2) DS; the issue is whether this was "in accordance with contract requirements, as the instruction itself states, and Serck's evidence does not establish that it was not.

233 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

235 Dealt with in paragraphs 86 to 88 below.

236 Serck.

237 Serck.

238 Serck.

242 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

243 Serck.

244 Serck.

246 Serck; I accept Mr Philip Leigh's evidence that Serck had carried out the instructions given by him when employed by DS. In the circumstances design, as well as "panels", is properly claimed as additional work allocated to item 91.

247 Serck; as for 246.

248 Serck.

249(4) Serck; DS accepts sub-items (1) to (3), and (4) follows - whether any increased cost was involved is a quantification issue.

250(1) Serck; the allegation of duplication with item 249 raised by DS is a quantification issue.

251 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

252(1) Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

254 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

257 Serck.

258 Serck; I accept Mr Partington's evidence that this arose from damage done by DS.

259 Serck.

260 Serck, except as to the sum claimed under "panels". DS accepts the charge for design, and those for commissioning and validation follow - whether any increased cost was involved is a quantification issue. It is, however, expressly alleged by DS that no work was done to the panels and Serck, on whom the onus lies, has not adduced evidence that any was.

261. Serck.

262 Serck.

263 DS.

264 Serck.

265 Serck.

267 Serck, but only in proportion to the number of re-tests required by the default of DS or others in failing to provide satisfactory access or in other ways, which I find to be 78%.

268 Dealt with in paragraphs 82 to 85 below.

270 Serck, but as to the design element as an "allocated sum" under item 36, not 91, and therefore subject to paragraphs 64 and 65 above.

271(2) DS; it is expressly alleged by DS that no work was required or done to the panels and Serck, on whom the onus lies, has not adduced evidence that any was.

272 Serck; this item is all accepted by DS except the charge for commissioning and validation, but in principle those elements follow the rest - whether any increased cost was involved is a quantification issue.

273(3)-(6) Serck; the instruction to relocate the central vacuum system is admitted and the design costs accepted. There must have been further work involved in installation. Whether there is any duplication in that respect and whether any increased cost was involved in commissioning and validation are quantification issues.

274(2) Serck; this item is accepted by DS as to installation, and in principle commissioning follows - whether any increased cost was involved is a quantification issue.

275 Serck; as 116.

277(2) Serck; as 274(2).

278 Serck.

280 Serck.

282 Serck.

283 Serck; there is no doubt that this was an instruction for a change to the system as installed, so the issue is whether the system as designed by Serck and installed departed in that respect from the design concept. DS points only to the BNFL specification, which Serck does not admit, and DS called no evidence that in this respect the design concept adopted the specification (see paragraph 18 above).

284(1), (3)-(5) Serck.

285 Serck; DS accepts design and the objections raised to the other elements go to quantification.

286 Serck; DS accepts design and installation and the objections raised to the other elements go to quantification.

287 DS, except as to equipment, which is accepted. DS expressly asserts that Serck had cabled to the wrong room and Serck, on whom the onus lies, does not rely on any evidence to the contrary.

288 DS; it expressly asserts that Serck had cabled to the wrong position and Serck, on whom the onus lies, does not rely on any evidence to the contrary.

289 DS; as 288.

291(1), (4), (5) Serck; DS accepts supply and installation and the objections raised to the other elements go to quantification.

294 Serck; I accept the evidence of Messrs Kerrigan, Fothergill and Scoular that this instruction was given, that it was one which made the containment control strategy more complex, and that the work was done.

295 DS; it is obvious that emergency stop buttons should be readily accessible.

296 Dealt with in paragraphs 82 to 85 below.

297(1)-(3) Serck; DS accepts sub-items (4) and (5), and the objections to these remaining sub-items go only to quantification.

298(5), (7) Serck; DS accepts sub-items (1)-(3), (4) and (6), and the objections to these remaining sub-items go only to quantification.

299(1), (4), (5) Serck; DS accepts sub-items (2) and (3), and the objections to these remaining sub-items go only to quantification.

300(1), (4) Serck; DS accepts sub-items (2), (3) and (5), and the objections to these remaining sub-items go only to quantification.

301 Serck; DS's objection that Serck's design and installation were non-compliant was based on a general requirement in the BNFL specification that design should be "based on fail safe principles such that failure of a system or systems shall not endanger the remaining plant or systems". There was no evidence that that was incorporated in the design concept (see paragraph 18 above) or that if it was the particular "fail safe return" instructed here was necessary for compliance with it because, for example, its absence "endangered the remaining plant or systems". There is, however, an admission by Serck of a partial duplication to be taken into account.

302 Serck; DS accepts design and installation and the objections raised to commissioning go to quantification.

303 DS; see paragraphs 70 to 76 above.

304 Serck; subject to paragraphs 28 to 31 and 77 above.

306 Serck; DS alleges duplication with items 260 and 270, but that is a matter for quantification.

307(1) Serck; DS alleges duplication with item 304, but that is a matter for quantification.

308 Serck.

82. Item 174(1) is an instruction to work through the (suspended) ceiling in specified areas after specified dates and item 296 is associated with it, being an instruction to direct requests for the removal of ceiling tiles through DS. Item 268 is an instruction to re-fit fire barriers and trunking lids fitted by DS and removed by Serck to enable further cabling to be pulled. They all therefore concern extra costs which would not be incurred on an efficiently run site, with a complete contractual network, where co-ordination of programmes by a main contractor ensures that all cable runs and other electrical equipment installed between the structural and suspended ceilings are in place before suspended ceilings are constructed and fire barriers and trunking lids are not fitted until all cables have been run. The terms of the sub-contracts and sub-sub-contracts in such a situation will ensure that everyone concerned is obliged to comply with a properly established timetable and responsible for the cost of any departure from it.

83 Serck was not a party to any such contractual network; indeed, it was failure to agree a programme which was one of the reasons why its negotiations with DS never reached fruition. DS nevertheless submits that Serck was, in effect, under a duty to comply with the main contractor's programme and cannot therefore charge for extra time taken by reason of having to work through ceilings or to remove and replace fire barriers and trunking lids; in addition to the specific application relevant here that was implicit in the general plea in paragraph 1.2 of the Re-amended Defence that Serck should be remunerated solely at normal or usual industry rates. Serck's case is that it had no duties as to rate of progress or compliance with programmes at all and should therefore be paid in full for the time actually taken so far as it was extended by reason of such matters.

84. I am clear that there cannot be the duty for which DS contends. Its existence would wholly negate, in an important respect, the decision that there was no contract because, among other things, no programme could be agreed. I am not persuaded, however, that at the other extreme a firm working on a quantum meruit basis on a complex construction site can wholly ignore the desirability of co-operation with others at work there. There must at least be a duty not unreasonably to interfere with the carrying out of other works, and I believe that, more positively, there is an obligation to be aware of the progress of other trades and, so far as consistent with the firm's own legitimate commercial interest, to co-operate in efficient working practices. There may also be more specific duties, for example in relation to compliance with health and safety legislation and the directions of persons having powers under it, but it is not necessary for present purposes to come to conclusions about that.

85. Approaching the three items in question in the light of those conclusions I find that DS has not established any breach on Serck's part of the qualified duty of co-operation which I have described such as to disentitle Serck from having its work valued on the basis that the time properly required should be assessed on the basis of having to work through ceilings or under the other conditions identified in the three items under consideration to the extent specified in those items or in the instructions to which they relate.

 86. Item 235 concerns an instruction dated 28 March 1996 that the existing access would be closed from mid-April, that access thereafter would be only by the main gate, that permits would be required and that car access passes would require a separate application form. Serck was asked to indicate the number of car access applications required. It is Serck's case that car access permits were not issued to its staff, who therefore had to walk considerable distances and thus lose substantial amounts of working time. It is not in dispute that failing a car permit access was longer and more time-consuming.

87. Mr Partington gave evidence that he did obtain a pass after some initial difficulty. He was not cross-examined on the point, and I accept his evidence. Mr Kerrigan gave evidence that all sub-contractors except Serck and those working for it received passes, and that when he complained he was told that there were only so many passes available and that they had gone first to Wimpey and then to DS, leaving none for Serck. He took his complaints as far as BNFL, who told him that Wimpey had not applied for any passes for Serck. In cross-examination he was referred to that passage, but it was not challenged and I accept it. Mr Waite, in cross-examination, was referred to the paragraph in the letter of 28 March inviting applications and to a similar invitation in another letter in April. The purpose of those questions was presumably to suggest that Serck had simply not bothered to apply, but that was not squarely put to Mr Waite, who said that he could not remember seeing those letters, although he might well have done.

88. In view of the fact that Mr Partington did eventually obtain a pass, albeit with difficulty, I do not believe that the position was one of total exclusion. However, the very fairness of his admission lends weight to his unchallenged evidence that it was difficult. Nor should Mr Kerrigan's evidence be ignored. DS had no positive evidence to support any suggestion of default on Serck's part, but on the other hand Serck, in whose possession it would have been, did not produce any documentation concerning the obtaining, completion or submission of application forms. In the circumstances I believe that the fairest result is to award Serck 75% of any increased costs caused by more time-consuming access from the date of the change.

 

Hours

89. This final section addresses the additional issue which I was invited to determine, as to the number of hours reasonably required for certain tasks. The first item to be dealt with here is 36, the main design item. For the reasons given in paragraphs 64 and 65 above I am concerned with the "total value" of this Primary Instruction, not separately with the "allocated value" and the "residual value". Although it is convenient to use the word "value" I am, of course dealing with hours only, not with rates or, therefore, money. The claim, as set out in the Scott Schedule and supporting documents, is for 2,419 hours spent by engineers and 426 by drawing office staff (technicians and draftsmen).

90. Serck's expert witness was Mr England. His evidence was that he first made a "ball-park" estimate by applying a factor of 16 hours per instrument supplied (9.6 hours engineers and 6.4 hours drawing office) which he commonly uses when reviewing man-hour estimates, but adjusted by halving the drawing office hours to allow for the absence here of instrument loop drawings. For 249 instruments supplied by Serck that produced 2,390 engineers' hours and 797 drawing office hours. Because of the wide discrepancy between his drawing office figures and that in the Scott Schedule he carried out a more detailed assessment, which took into account a number of additional factors, as set out in his report, and arrived at a revised estimate of 2,837 engineers' hours and 433 drawing office hours. If, as Mr England accepted, his first figure for drawing office hours was suspect as substantially exceeding the claim, so must be his second figure for engineers. Taking the lower number in each category gives 2,390 for engineers and 433 for the drawing office, a total of 2,823 hours.

91. DS's expert witness, Mr Lawless, approached the matter by analysing Serck's tender price and reaching the conclusion that it had allowed a total of 89 minutes in both grades combined per input/output point for design. He then expressed his own conclusion as being that his allowance of "about 90 minutes" was "more than adequate". The number of input/output points was finally agreed between the parties' experts as being 1,192, which at 90 minutes per point would give 1,788 hours.

92. I do not find Mr Lawless' evidence of any real assistance. In the first place he starts from Serck's tender, and even if his analysis of it is valid that is the wrong approach for the reasons given in paragraph 48 above. Secondly it is not in dispute that he has not, apparently on instructions, taken into account the circumstances in which the work was carried out, so far as they may have departed from the norm. For the reasons given in paragraphs 47 to 51 above those circumstances are relevant. Thirdly, and most importantly, his report shows no trace of any independent method of assessment of his own; he simply says, without explanation or reason, that what he believes to be Serck's tender costing was "more than adequate".

93. Mr England's evidence is of greater weight, although not without its own shortcomings. Although he has apparently taken into account what he understood to be the circumstances he does not identify which ones he considers relevant or how they have affected his figures. He is unduly concerned to justify Serck's Scott Schedule figures rather than to approach the matter on its merits. Nevertheless he does make his workings clear, and I find them of assistance.

94. Taking into account these considerations, and also my findings under issues (2) and (3) as to the existence and effects of the instructions relied upon by Serck as constituting the relevant circumstances, including my reassignment to item 36 of some "allocated sums" classified in the Scott Schedule under item 91, I assess the hours to be used for the purpose of arriving at the "total value" of Primary Instruction 36 at 1,690 hours for engineers and 310 for the drawing office, a total of 2,000 hours.

95. That is a comparatively well-defined and self-contained issue, in particular given my conclusions in paragraph 65 above, and I have had no qualms about accepting the parties' request that I decide it. I have had much more hesitation about the wisdom of doing so in relation to the other areas in which I have been asked to find the number of hours reasonably required. The implications here of my conclusions on the general questions considered in paragraphs 32 to 78 above and, item by item, on issues (2) and (3) are much more complex, and have inevitably not been taken into account by the expert witnesses, so that much of their evidence is directed to assumed circumstances other than those which I have found to obtain. There would have been a great deal to be said for the postponement of much, if not all, of the expert evidence on time requirements so that it could have been prepared and given, whether by the existing experts or a new joint expert, in the light of findings by me confined to what were, after all, the issues agreed and directed to be tried at this stage.

96. Despite these misgivings I have, in the end, decided to make the findings requested by both parties. To have refused would have meant that a substantial part of the time and expense of a costly trial would have been wasted, even if it should strictly not have been incurred. It must be clearly understood, however, that in the circumstances my approach can in many respects be only a very rough and ready one.

97. The areas concerned can be described generally as software design, commissioning, validation and documentation but I must, at the appropriate point, be more specific and technical about some of the nomenclature and demarcations. The evidence is almost entirely that of Mr England for Serck and Mr Martin for DS. Mr Martin's evidence, like that of Mr Lawless, suffers from the severe handicaps that he has not taken into account any of the circumstances, relied upon by Serck, in which the work was carried out, and that he from time to time takes a breakdown of Serck's tender as his starting point. Mr England is again of more assistance, although the shortcomings identified in paragraph 93 above remain.

98. There were a number of largely fruitless experts' meetings, bedevilled by their refusal to depart, even hypothetically, from conflicting assumptions on fundamental issues which it was for the court to decide, but to which they were wedded on the basis of "instructions" which they should never have been given and which they should have ignored. Their first joint statement does, however, record agreement on three points, as follows:

3.5 The experts agree that where analogue signals are used they are more time consuming to design and are more expensive in equipment, installation and take longer to commission than a digital signal.

 

7.3 Pre-commissioning. The experts agree that pre-commissioning typically comprises of:

End to end electrical continuity checks and cable to earth checks

A visual checking of the installation, including termination checks

Checking of installation of instrumentation

A dynamic check of the signals to and from the instrumentation and the relays and other hardware

Outstation input output checks

Communication links between the master station and the outstations and motor control cubicles (MCC)

Checks of motor direction of rotation, valve operation, position indicators on valves and dampers

General safety check, including check of fuse ratings and overload settings (may be rechecked for safety during commissioning).

 

7.4 The experts agree that commissioning tasks typically comprises of:

Prove correct inputs and outputs are connected to the correct points in the software and immediately check stroking of valves and dampers

Check through each element of software to ensure that start up routines, interlocks, overrides operate, and that the correct sequence of events takes place

Check that system is stable and controls are not cycling, both under normal operation and when a change of set point is made

Prove head end mimics show correct readings from all control and monitoring points.

99. Item 3.5 requires a short explanation of the terms employed, because "analogue" and "digital" do not in this field bear their usual scientific meanings. Generally speaking "analogue", used adjectivally, means "continuously variable" and "digital" means "varying by finite steps". It is, however, one of the paradoxes of modern technology that although analogue signals and outputs can therefore theoretically reproduce finer gradations than digital ones it is usually the latter which are in practice able to reproduce an original with greater fidelity - a modern (digital) CD gives much better sound quality than a classical (analogue) wax record. Moreover computers, an essential part of so much current technology, can by their nature only operate digitally. The control system installed by Serck here was intensively computerised, and may well therefore (the matter was not explored) have been entirely digital in that sense. The usage of the words in the documentation and evidence before me, however, was different. "Digital" was used to mean "capable of producing or conveying only a two-state (eg 'safe/unsafe' or 'on/off') signal or command", and "analogue" to mean "capable of producing or conveying an apparently continuous range of values, whether truly so or not".

100. There were a number of differences of approach between the two parties and their respective experts on which I need to express my conclusions before addressing the task of assessing the number of hours required for specific tasks. I have already mentioned the first two - whether assessment should begin from Serck's tender and whether the circumstances in which the work was done should be taken into account - and need say no more about them at this stage, since I have already discussed them at some length and recorded my judgment in paragraphs 40 to 46 and 47 to 51 above, respectively.

101. The next was whether this was a standard BMS (building management system) control system. In my judgment it plainly was not. There were a number of features, listed by Mr England, which (in some instances singly, and certainly in combination) would not be found in a standard system, in particular features associated with characteristic hazards of BNFL's operations.

102. A major difference of approach, in part one of categorisation but in part of substance, was whether to treat commissioning as a task separate from loop acceptance tests ("LATS") and facility acceptance tests ("FATS"). Mr England dealt with them separately, but Mr Martin included LATS and FATS in commissioning, although he did then have a separate time allowance for what he called "demonstrating" LATS and FATS.

103. I describe this as in part a difference of categorisation because there are several features of what had to be done which are not in dispute. BNFL required to witness the performance of an elaborate system of acceptance tests, first of each circuit or "loop" (LATS) and then of each group of circuits constituting a "facility" (FATS) and to have them recorded in an equally elaborate set of documents, designed by Serck and approved in advance by BNFL. Serck was clearly entitled to be paid for all the work involved, however classified.

104. It is arguable that the difference between this process and ordinary commissioning was at most one of degree, rather than kind, since commissioning commonly includes the presence of a representative of the employer and requires his approval for its successful completion. What is in my view clear is that however classified or charged for there must, in a plant of any complexity, be provision somewhere in the price for a process of proving the system carried out by the party or parties responsible for design, supply and installation before it is demonstrated to the employer. I cannot conceive that anyone in his right mind would be prepared to launch into such a demonstration without having first conducted his own checks and tests. It is that stage which in Serck's claim and Mr England's time assessment is, as I understand it, categorised as pre-commissioning and commissioning. No doubt, in simpler cases, that category would include also the demonstration to the employer, but it is a convenient course here to treat them separately because of the special features of the LATS and FATS, and in particular the preparation and completion of their special documentation.

105. I am confirmed in my view that commissioning is in this instance better treated separately by comparing the quite short and simple list in item 7.4 of the experts' joint statement (paragraph 98 above), which defines what is included in commissioning for the purpose of these proceedings, with the content of the LATS documentation, which defines what was required for the carrying out of those tests. The differences are numerous, and the former cannot be described as simply the equivalent of the latter in summary narrative form.

106. The questions of substance are whether there is any duplication between commissioning, LATS and FATS if they are assessed separately, and whether the claim for commissioning includes any time for which Serck is not entitled to charge because it was expended in making good its own defective work. Mr England says that his figures do not include any such elements, but I must reach my own conclusions in that respect to the best of my ability on the evidence before me. I approach the latter question on the basis that in the process of checking and testing a system of any complexity there will inevitably be an element of identifying and correcting some modest proportion of minor malfunctions, and that that should be provided for in the time allowed. What should not be required, and what cannot properly be charged for, is the correction of defective work of a kind, or on a scale, inconsistent with the execution of the substantive work of design, supply and installation with due care, skill and workmanship. In the present case, for example, there was evidence of extensive ferruling by the commissioning engineers to make good omissions or inadequately fixed identification tags (see paragraphs 28 to 31 above). The time occupied in that way cannot be a proper part of a commissioning allowance.

107. There was next an issue whether the design of the LAT documentation should be priced on the basis of a standard time for each document, as Mr England believed, or whether there were such close similarities between groups of tests that a single standard form could be designed for each group, with only small and inexpensive variations required for different tests within that group. This was a dispute of more superficial than substantial significance, if only because Mr Martin was never able to convey to my understanding how he had applied his method. It is clear to me that there were similarities between groups of tests, and that no sensible designer would have ignored that fact by designing each form from scratch, without regard to work already done on similar ones, but the differences were by no means as trivial as Mr Martin suggested. Either approach to the assessment of time required is in my view legitimate, provided that if there is a separate allowance for each form it is an average after taking into account savings from partial repetition, and that if the batch method is used there is an adequate allowance for the variations between forms.

108. Finally there were differences of opinion as to the number of persons required for conducting LATS, and as to whether time could be saved by "bulk commissioning". When Mr Martin's view that two persons were enough for LATs was put to Mr England in cross-examination, he replied:

I completely disagree with that statement. There are two reasons; one is a technical reason, but I think the other overriding reason is one of safety. You will need one person at the head end and in the field, where you are going round the plant, there are large amounts of instrumentation which will require access via ladders, such as the fire dampers and so on. Safety states that you should not have one person going up and down ladders on their own, without support. Furthermore, from a technical point of view, you have things like the fire panel, which requires somebody there during the LAT, somebody in the field and somebody at the head end. No, I do not agree that you can only have two people. You must have three people, if only for safety.

109. I accept that evidence. I also accept Mr England's opinion that in the circumstances which obtained at this plant, in particular the inaccessibility at times of particular areas and the distances between the sensors to be tested, it was not a practical possibility to save time by bulk commissioning.

110. Taking into account my conclusions in paragraphs 97 to 109 above, my findings on issues (2) and (3) and the submissions on behalf of the parties I find that the number of hours reasonably required for the tasks in question was as follows:

Software design 2,000
Pre-commissioning 1,070 engineers
350 technicians
Commissioning 1,500 engineers
750 technicians
750 supervisors
Design of LAT documents 865
Design of FAT documents 465
LAT performance 2,200 engineers
1,200 technicians
FAT performance 800
Operation and maintenance manuals 400

 

Conclusion

111. I shall require agreed statements or written submissions on the handing down of this judgment as to the form of the judgment to be entered, costs, any consequential orders, and directions as to the trial of the remaining issues.