A Jersey resident and former Chair of a Premier League football team is in the midst of a legal battle with a contractor that was building him a new home.
Relations between Sir Bob Murray, who has lived in Jersey for more than 15 years, and Camerons broke down after the cost of building a property in St. Brelade spiralled.
Sir Bob claimed that Camerons failed to prepare and present a proper and fully considered proposal and instead adopted a piecemeal approach with the cost of every item being considered as it arose.
The former Sunderland FC Chair also alleged that the contractor’s conduct was unreasonable and undermined his trust and confidence in them. He also claimed that no agreed contract had been signed and there was no agreed basis for costing any changes and additional work needed.
He alleged that an initial £5.5m cost estimate in October 2014 had escalated to up to £7.7m by September 2015.
The two parties had signed a ‘Letter of Intent’ in November 2014, setting the overall sum at £5.5m, which comprised of a £3.7m cost cap for the main building work and £1.8m for enabling works, which Camerons had already started on. In February 2016, allegedly facing a number of losses, defective works and other costs, Sir Bob terminated this agreement.
But Camerons argued that the Letter of Intent had just been a ‘holding’ contact, it had never agreed to a fixed-sum arrangement and costs had escalated as the client’s requirements had changed. Rather, the contractor took on the project on the understanding that it would follow a standard industry contract, called a ‘JCT’ contract. The firm felt it should therefore be entitled to payment on the terms of that contract rather than the Letter of Intent.
Pictured: The Bailiff, Tim Le Cocq, presided over this case.
In a Royal Court judgment, the Bailiff, Timothy Le Cocq, who was sitting with Jurats Blampied and Thomas, wrote: “The Plaintiff [Sir Bob], in the light of the changed plans and specification must have understood that the Defendant [Camerons] would not be willing to cap the cost of the project and that these changes would result in substantial additional costs.
“In our view, perhaps because he was preoccupied with what he viewed as ‘value for money’, the Plaintiff was unwilling to accept these additional costs and tried to force through a substantial discount. The Defendant’s refusal to accept that position was the death knell of the relationship between them.”
The Court concluded that: “Objectively speaking, by all that they did the parties agreed that they were operating under the JCT Standard Contract at a price that was based on revised drawings and was significantly in excess of the cap in the Letter of Intent. The cap in the Letter of Intent had become irrelevant because the Letter of Intent had ceased in our view to govern the relationship between the parties.
“The delays and escalation in costs were, in our judgment, almost entirely attributable to the Plaintiff and his family. The Defendant gave a number of warnings as to the delay relating to the project. After the Letter of Intent was executed, the Defendant was presented with plans that were materially different from the plans which formed the basis of the cap in the Letter of Intent.”
The Court ruled that Camerons was entitled to be paid for its work on an “agreed valued basis”, and receive an extra charge for “overheads and profits.”
Its judgment reads: “For the avoidance of doubt, however, we do not find on the evidence before us that there is any basis to revisit the intermediate contract and the sums paid for the enabling works nor, as we have indicated above, do we find the allegations made by the Plaintiff against the Defendant established.”
When it came to how much Camerons should actually be paid, the Royal Court said that it did not have enough information to make that decision.
“We observe, however, that if agreement cannot be reached between the parties in the light of contents of this judgment as to the appropriate quantum then it may well be more cost effective for the parties to agree a reconciliation of the financial aspects outside the Court process by some form of alternate dispute resolution such as arbitration or mediation or otherwise in accordance with JCT contract provisions.
“However, if the parties cannot agree that method, then we will sit to give directions for the further quantification of the financial aspects of this case.”
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