W.L. Construction Ltd v Chawke

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 03 October 2016
• Neutral Citation: [2016] IEHC 539
• Docket Number: [2008 No. 809 S]
• Court: High Court
• Date: 03 October 2016

BETWEEN

W. L. CONSTRUCTION LIMITED

PLAINTIFF

AND

CHARLES CHAWKE

AND

EDWARD JOSEPH BOHAN

DEFEENDANTS

[2016] IEHC 539

Noonan J.

[2008 No. 809 S]

THE HIGH COURT

Contract – Amount due – Dishonest and unreliable evidence – Abuse of process – Prolonged litigation – Striking out the claim

Facts: The defendants in the present application sought for an order for non-suit and dismissal of the plaintiff's claim. The plaintiff claimed for sums allegedly due on foot of a building contract entered into by the plaintiff and defendants. The defendants claimed that the plaintiff had been guilty of litigation misconduct and that the plaintiff's evidence had failed to establish any amount due to the plaintiff by the defendants.

Mr. Justice Noonan accepted the application of the defendants and dismissed the plaintiff's claim. The Court held that there was an abuse of process of the court to the extent that required striking out the claim of the plaintiff and further to prevent the oppression of the defendants. The Court found that the evidence adduced by the principal of the plaintiff's company and the witnesses were unreliable, dishonest and confusing. The Court found that the process of constant altering, amending the claim by the plaintiff was a fraudulent exercise to prolong the litigation. The Court held that the plaintiffs had not made out a prima facie case against the defendants that there was any amount due.

JUDGMENT of Mr. Justice Noonan delivered on the 3rd day of October, 2016

1 This application is made by the defendants for a non-suit and dismissal of the plaintiff's claim at the conclusion of the plaintiff's case. Counsel for the defendants has indicated that if this application is unsuccessful, the defendants intend to go into evidence.

Background

2 The plaintiff's claim in these proceedings is for sums allegedly due on foot of a building contract entered into between the parties in late 2005. The defendants are and were at all material times the owners of a licensed premises known as the Lord Lucan at Finnstown Shopping Centre, Lucan. In 2005, they had sought and obtained planning permission for renovations to the public house including the construction of an extension. They retained an architect, Mr. Gary Solan to act on their behalf in relation to the planning application and subsequent execution of the works. Mr. Solan practised under the title of Architectural Construction Technology.

3 The principle of the plaintiff company is Mr. William Loughnane who was known to Mr. Solan, they having been involved in previous building projects together. Mr. Solan invited Mr. Loughnane to tender for the Lord Lucan job and furnished him with a number of drawings, originally prepared for a planning application, for that purpose. After some toing and froing between the parties, Mr. Loughnane ultimately submitted a document entitled ‘Provisional Estimate’ dated 10th November, 2005, in which he quoted a sum of €583,000 plus VAT for the contract works. These works were referred to throughout the course of the trial as Phase 1 of the project. The plaintiff's Provisional Estimate was accepted by the defendants and the work commenced on 1st February, 2006.

4 It is a matter of dispute between the parties as to the precise nature of the contract documents that passed between them. Mr. Loughnane's evidence is that no formal written contract was executed and the contractual documentation consists solely of his Provisional Estimate, the correspondence leading up to it and in particular the drawings furnished by Mr. Solan to him. It was put to Mr. Loughnane in cross-examination that Mr. Solan's evidence will be that in fact, quite detailed and elaborate contract documentation was furnished to Mr. Loughnane leading up to the conclusion of the contract, such documentation being allegedly a modified version of the standard RIAI building contract. This was denied by Mr. Loughnane. The drawings included typed on them, narrative notes relating to various aspects of the work to be carried out. Of considerable significance, the type written narrative contained on the drawings makes provision for a number of defined amounts that are described as ‘PC Sums’.

5 In the normal way, in building contracts, and certainly those governed by the RIAI standard form, PC sums are understood to mean prime costs sums which have a particular meaning and significance. However, in the present case, it was agreed by both parties that the expression ‘PC Sums’ was in fact intended to refer to provisional amounts which would ultimately require vouching by the contractor.

6 Again it is common case that the various heads of claim advanced by the plaintiff were either provisional sums requiring vouching or alternatively what are described as lump sums, being a fixed price for the work undertaken, not requiring vouching. Consequently where an item falls to be treated as a lump sum, the contractor is entitled to payment of that amount when the work is done, irrespective of the cost of that work to the contractor. One of the major controversies in this case has been whether certain of the items claimed constitute lump sums or alternatively provisional sums. Where in the course of this judgment I refer to the vouching of provisional sums, I do so on the basis that it has emerged from the evidence to date that both parties agree that this is the correct classification of such item of claim.

7 As noted above, the works commenced on 1st February, 2006, and almost immediately, difficulties were encountered. It is not necessary for the purposes of this application to rehearse these in detail but suffice it to say that throughout the spring and summer of 2006, relations between Mr. Solan and Mr. Loughnane became strained. This tension arose on Mr. Loughnane's evidence as a result of difficulties, as he perceived it, with getting Mr. Solan to certify for sums allegedly due to the plaintiff. Although it was originally envisaged that the contract works would take some fifteen weeks bringing matters up to the end of May 2006, inevitably as a result of the various difficulties encountered there were delays. However, by August 2006, the Phase 1 works were nearing completion so that the premises were ready for fit out. This aspect of the work has been described as Phase 2. Mr. Loughnane's evidence was that he had no interest in undertaking the Phase 2 works if Mr. Solan was going to be involved in the matter having regard to the problems he had already encountered with Mr. Solan, as he saw it.

8 Two meetings took place between the parties in August and September 2006 to discuss the Phase 2 works. I am satisfied from the evidence that these meetings were attended by, inter alia, Mr. Loughnane and his co-director, Mr. Genocchie on behalf of the plaintiff and the defendants personally with some members of their staff. Eventually it was agreed that the plaintiff would undertake the Phase 2 fit out works for the sum of €120,150 plus VAT, the constituent parts of that amount being described as ‘PC Sums’ by the plaintiff in its written quotation of 15th August, 2006.

9 These works were undertaken with a view to the premises being ready for its formal reopening by Halloween 2006, which it was. Thereafter certain further works were carried out by the plaintiff but ultimately the work was completed by the end of 2006.

10 The foregoing represents the briefest synopsis of the factual background to this matter which was contested on a multitude of issues and has, to date, been at hearing for 28 days, although in fact the first two days allocated for the trial were taken up by negotiations between the respective quantity surveyors on both sides. Thus, 30 days of court time have been so far expended on the trial of this case. In addition there have been various interlocutory motions for particulars, discovery, and a contested motion to dismiss for want or prosecution which resulted in a reserved judgment being delivered by Barr J.

11 The application that is now made by the defendants for a non-suit is essentially based on two grounds, first that the plaintiff has been guilty of litigation misconduct to such an extent, and of such a magnitude, that the claim ought now be dismissed in limine, and second that the plaintiff's evidence has failed to establish either that there is any sum due to the plaintiff by the defendants or if so, what that sum might be. I propose to deal with each of these in turn.

Litigation Misconduct

12 This contention by the defendants arises under a number of headings but most starkly in the context of a number of invoices relied upon by the plaintiff as substantiation of its claim to various provisional sums which are alleged by the defendants to be false and fraudulent. As will appear in more detail from the chronology below, on 12th October, 2007, the plaintiff's solicitor sent two books of invoices to the defendants' solicitors which were claimed to underpin the plaintiff's claims. By Mr. Loughnane's own admission, these booklets contained many invoices which were not relevant to the Lord Lucan contract at all.

13 On 18th March, 2015, the plaintiff's solicitors sent to the defendants' solicitors another booklet of invoices which largely, if not entirely, overlapped with the invoices which had been sent some seven and a half years earlier. These invoices were said to underpin claims by the plaintiff in relation to 50 different variations to the original contract which were not covered by the original contract works quoted for by the plaintiff. This court made an order for discovery against the plaintiff on 27th April, 2015, in which the plaintiff was ordered to make discovery of the following categories of documents:

(a) All documents vouching the amounts paid by the defendants to the plaintiff in respect of work carried out to the ‘Lord Lucan’ licensed...