Davidson v Hanson Quarry Products (Europe) Ltd

This is one of two cases involving claims by sub-contractors against Hanson Construction Products (Europe) Ltd. (Hanson) arising out of work which they carried out on the contract for the renewal of the carriageway between Junctions 2 and 4 on the M27 motorway. Mr. Davidson claims the sum of £209,077.74 against Hanson. This sum is agreed subject to liability.

The main contractors were Hanson, whose principal offices were at Chipping Sodbury and Stenoak Associated Services plc (Stenoak), whose principal offices were at Henley.

In order to carry out the work on the M27 contract, Hanson and Stenoak entered formally into a joint venture agreement (the joint venture agreement) with the Secretary of State for Transport, the Environment and the Regions (as he was then known), later the Highways Agency, pursuant to a deed dated 30 November 2001. The joint venture agreement regulated the rights and obligations between Hanson and Stenoak as well as those between them and the Secretary of State.

On 20 June, 2002 Stenoak became insolvent, and Hanson and Stenoak executed a deed which (amongst other things) entitled Hanson to receive payment under the contract direct from the employer. Until then, payments had been made to Stenoak which had then accounted to Hanson for its share due under the contract.

On 30 June, 2002 the contract works were substantially complete. On 4 July 2002 Hanson terminated the joint venture agreement as it was entitled to do. On 5 July, 2002 an administrative receiver was appointed for Stenoak.

Mr. Davidson is a sole trader who specialises in the supply and installation of slip form construction extruded drainage channel works and pavement concrete works.

Hanson contends that on 15 October 2001 Mr. Davidson entered into a contract with Stenoak, or alternatively its wholly owned subsidiary Associated Asphalt Ltd. (AAL) for the work which he carried out under the sub-contracts, and therefore it is not liable for the work.

Mr. Davidson contends that on 15 October 2001 he entered into an oral contract with Hanson, through its servants or agents, to carry out drainage works, and works on the central reservation on the M27. He claims that he carried out this work and is entitled to be paid by Hanson. Originally, Mr. Davidson also claimed in the alternative that he was entitled to be paid on a quantum meruit and in the further alternative that Hanson held monies on trust for Mr. Davidson. These claims have not been pursued.

I should note at the outset that none of those concerned with the contractual arrangements thought in the Autumn of 2001 that Stenoak was in any danger of becoming insolvent. Mr. Davidson said in evidence that while he negotiated with Hanson personnel, and contracted with Hanson, he would have been prepared to negotiate with Stenoak personnel and contract with Stenoak/AAL.

On Hanson's side, no-one appreciated in the late summer/autumn of 2001 that Stenoak might run into difficulties. They were in the position where sub-contracts had to be let urgently against a very tight deadline, and their priority was to let the contracts to enable the work to start. This may help to explain the lack of detailed recollection of Hanson personnel on points which would not have seemed important at the time, but which have become important subsequently. It also helps to explain procedures which were not watertight. I should have expected in normal circumstances better records of meetings with Mr. Davidson to have been kept, and a note of confirmation of the contract to have been sent to him immediately after the meeting of 15 October 2001 at which Mr. Davidson agreed to do sub-contract work.

I heard from a number of witnesses for Hanson. Mr. Ian Elms was Hanson's operations manager on the project. Mr. Doyle was the director and sole shareholder of Crown Arbitrations Ltd. (CAL). He was engaged by Hanson through his company as deputy project manager on this project. Mr. Rudman was engaged by Hanson on a similar basis to act as Hanson's quantity surveyor on the project. Mr. Tuck was engaged also on a similar basis by Hanson to act as a planner on the project. Mr. Davidson had worked with Mr. Doyle and Mr. Tuck on previous highway projects.

There is no dispute that all discussions prior to, and at, the meeting on 15 October 2001 were conducted by Hanson personnel. Nevertheless, Hanson contends that they were acting for Stenoak/AAL and at the crucial meeting on 15 October 2001 Mr. Davidson knew that he was contracting with Stenoak/AAL and not Hanson.

The first task for Hanson/Stenoak was to put together a bid for the M27 contract. In order to do this, they had to approach sub-contractors. Other bidders were engaged in the same process. Mr. Davidson was well-known and highly regarded in the industry as a specialist sub-contractor. In his witness statement, Mr. Doyle described Mr. Davidson (whom he had worked with for ten years) as 'a very competent contractor ... He talks a great deal and he is very bad at completing paperwork, but in my experience he is commercially very astute'.

In the Autumn of 2001 Mr. Davidson was employing Mr. Isaac as his office manager. Mr. Isaac currently works for Mr. Davidson on a freelance basis. It was clear on the evidence that Mr. Davidson was, and is, good at obtaining work and doing it to a very high standard, but that he was not interested in, and is impatient with, paperwork and administration which he left to Mr. Isaac.

On 12 July 2001 Mr. Davidson received an inquiry from Stenoak to tender for sub-contract slip form work on the M27 project.

On 5 August 2001 he sent a quotation to Stenoak for a slip form surface water channel based on the price of £11.50 per metre. There was no indication in his letter of invitation to tender that Stenoak was part of a joint venture, although it is clear from an e-mail from Mr. Castle (a quantity surveyor with his own firm, who was engaged by Hanson to work on the project) to Mr. Flowerdew (a partner in TLT, Solicitors, who were involved in advising throughout on the project) that this was the position. It appears from that e-mail that negotiations between Hanson and Stenoak on their participation in the joint venture were then at a relatively early stage.

Also on 5 August, 2001 Mr. Davidson submitted quotations to Costain and Balfour Beatty on a similar basis to the Stenoak quotation. These were no doubt incorporated in their respective tenders. Costain was quoted £11.50 per metre, and Balfour Beatty was quoted £12.50 per metre. There were other differences in the quotations as well.

During August 2001 Mr. Davidson was telephoned by someone at Hanson from Chipping Sodbury to inquire what would be Mr. Davidson's rate if Hanson wished to use him as a sub-contractor for slip form drainage work. He knew, and had worked with, Hanson, and quoted £11 per metre. It may have been Mr. Tuck who made the inquiry.

During August/early September 2001, Mr. Davidson was telephoned by Mr. Tuck, with whom he had had previous dealings, to discuss the possibility of Mr. Davidson undertaking work. In one of these conversations, Mr. Tuck said with reference to the M27 contract, "We are in with Stenoak". Mr. Davidson understood this to mean that Hanson and Stenoak were in a co-operative relationship. He did not understand it to mean that Mr. Davidson would contract with Stenoak. Mr. Davidson said - and I accept his evidence - that he thought no more of Mr. Tuck's comment.

Although no agreement had been reached with Mr. Davidson, the quality submission in the joint venture tender document asserted that Mr. Davidson would undertake the work on the extruded drainage channel. His status was described as 'committed supply chain partner'. Mr. Elms had to concede in cross-examination that at the time it was written, the comment was untrue.

Following Mr. Tuck's telephone conversations, there were two meetings. It is not disputed that the second was on 15 October 2001, and that it was of great significance.

The first took place on either 19 or 28 September 2001 and its significance is disputed. I was not at the outset entirely clear as to the full significance which Hanson placed on the date of the first meeting and the events surrounding it. But, Mr. Palmer, Q.C., for Hanson, made the position admirably clear. In his final submissions, he wrote,

"Hanson contends that the first meeting took place on 19 September 2001 in the afternoon and that (1) Mr. Davidson did receive the letter dated 13 September, 2001 and knew from the outset (because it was specifically referred to in the letter) that Stenoak and/or the joint venture were involved. The meeting was a follow-on from his earlier tender to Stenoak; (2) Mr. Davidson's evidence was flawed on this matter which casts considerable doubt on the reliability of his evidence on other matters".

Mr. Davidson contends that the meeting took place on 28 September 2001. He says that he did not receive the letter of 13 September 2001. The meeting was not a follow-on to his Stenoak tender to which he had had no response. In any event, his discussions with Mr. Tuck (in the course of which he had quoted Hanson a lower rate than Stenoak) had intervened. His discussions were with Hanson personnel, which reinforced his impression that he would enter into a contract with Hanson.

The documentary evidence is as follows: on 13 September 2001 a letter carefully described by Mr. Elms as being in his name, but, I assume, not necessarily drafted by him, was said to have been sent to Mr. Davidson. Mr. Davidson said that he never received the letter. This letter, dated 13 September 2001 (a Thursday) with a Stenoak logo, and purporting to be sent for, and on behalf of, Stenoak-Hanson Highways, invited Mr. Davidson to attend 'our offices at Chipping Sodbury at 4.00 p.m. on Wednesday, 19 September 2001 to discuss your bid'. The letter, if it had been received, might well have confused the reader if he had thought about it. The logo and address at the top were Stenoak. The letter was said to be on behalf of Stenoak-Hanson Highways. If it had been signed, the signature would have been Mr. Elms (a Hanson employee). The letter requested Mr. Davidson to attend a meeting at Hanson's head office.

Mr. Elms says that in addition he spoke to Mr. Davidson before 13 September, 2001. Mr. Davidson does not agree.

Mr. Elms appears to have written letters to other sub-contractors on 13 September 2001. One to Mr. Dynes asked for a meeting at Chipping Sodbury at 2.00 p.m. on 19 September 2001. It is agreed that this meeting did not take place. Two other letters asked different sub-contractors to meetings at Henley on 20 September 2001.

There is no dispute that there was an important meeting on the morning of 19 September 2001. This was the Hanson/Stenoak meeting to follow up the meeting on the previous day at which the joint venture had been awarded the contract. The purpose of the meeting on 19 September 2001 was to introduce members of the joint venture to each other, and to establish key dates for tasks to be undertaken under the contract. That meeting was due to finish at 2.00 p.m. Mr. Elms, Mr. Doyle, and Mr. Rudman attended. Also present was Mr. Goodman, a self-employed construction manager who acted as a self-employed roadworks site agent as one of AAL/Stenoak's personnel. One hand-written note of the meeting records, "PJ Davidson - get to the price". This is not explained, and looks a little odd if Mr. Davidson had a meeting fixed at Chipping Sodbury later in the afternoon.

The documentary evidence of the proposed meeting with Mr. Davidson is as follows: Mr. Elms' planner has an entry for 19 September 2001. "16-17 (presumably 4.00 p.m. to 5.00 p.m.) Davidson. Re. Extruded channel." It also has an entry for 28 September 2001, "O8-10. Peter Davidson. M27 plus Alan Tuck". Hanson relies on Mr. Tuck's expenses spreadsheet which claims petrol from his home to Chipping Sodbury on 19 September 2001, but makes no claim and no reference to a journey to Chipping Sodbury on 28 September 2001.

There is no note of Mr. Davidson’s meeting from either party, although there is a hand-written sketch in Mr. Doyle's daybook. It is agreed that it was done by Mr. Davidson. It is not dated, and an examination of the sequence in the notebook does not provide conclusive evidence between the competing dates.

Mr. Davidson's telephone records show a twenty minute telephone call to Mr. Elms at 6.15 p.m. on 19 September 2001. Hanson's switchboard also appears to show brief telephone calls to Mr .Davidson at lunch-time on 19 September 2001. This latter would tend to support the reference in the note of the morning meeting, but none of the witnesses have been able to give evidence about it.

In evidence, Mr. Davidson said that he did not attend a meeting at Chipping Sodbury on 19 September 2001. At the time when the meeting was said to have taken place, he was helping a friend - Mr. Christopher - to dig a pond at his farm near Exeter. Mr. Christopher gave supporting evidence by videolink. His diary was also produced. It showed that on 17 September 2001 work had started on the pond, and that Mr. Davidson had helped with the work. The diary shows also that work continued on 18 September 2001, and the note for 19 September 2001 records that work started at 7.00 a.m. and continued to 7.30 p.m. Having read the note, I am not persuaded by the entry, taken on its own, that Mr. Davidson could not have gone to a meeting in Chipping Sodbury in the late afternoon.

Mr. Davidson's oral evidence, largely supported by Mr. Christopher, is that he was working on the pond until 5.00 p.m. and then said that he had to go to a meeting. Because of the distance between Exeter and Chipping Sodbury, if Mr. Davidson is right, and left at 5.00 p.m. he could not possibly have reached Chipping Sodbury in time for a meeting in the late afternoon.

The evidence of Hanson witnesses is that the meeting did take place at Chipping Sodbury on 19 September 2001. There were discrepancies in the Hanson evidence as to the timing of the meeting. Mr. Elms said he called in on the meeting and introduced himself, but took no part in the meeting. He had no clear recollection of the time. Mr. Doyle's witness statement gave no time for the meeting. In oral evidence he said that it took place after 5.00 p.m. Mr. Rudman said he was not present at the meeting, but thought he was introduced to Mr. Davidson after the morning meeting, which would place the time at approximately 2.00 p.m. Mr. Tuck said originally that the meeting took place shortly after the break-up of the morning meeting, which would also have placed it at around 2.00 p.m. In oral evidence, having heard other witnesses, he said that it took place some time later. This was an attempt to tailor his evidence to that given by others. Mr. Goodman did not have much recollection of the meeting, and could not say when it took place. There is some doubt, taking the evidence as a whole, whether he was present at the meeting at all.

The catalogue of uncertain recollection is not intended as a criticism of the witnesses. It is agreed that this meeting, on whichever date it took place, was a preliminary meeting. It was described by Mr. Doyle as 'a technical meeting'. It is also agreed that at no time was Mr. Davidson told in the course of the meeting that his contract was to be with Stenoak. No note was taken of the meeting. At the contractual meeting on 15 October 2001, by contrast, a note was taken.

It is agreed that at the start of the earlier meeting, Mr. Doyle said, "We are in with Stenoak". I accept Mr. Davidson's evidence that this did not, and was not intended to mean, that his sub-contract would be with Stenoak/AAL rather than Hanson. I also accept Mr. Davidson's evidence that his discussions were with Hanson personnel, and were similar to other pre-contract discussions which he had on other Hanson projects.

Taking this issue as a whole, on balance I prefer the evidence of Mr. Davidson to that of the Hanson witnesses. In doing so, I take into account the question of Mr. Tuck's expenses. I find that the sequence of events was as follows: Mr. Davidson had conversations with Mr. Tuck, and gave the quotation to Hanson at a rate for the slip form surface water channel which was lower than that quoted to Stenoak and without reference to his earlier quotation for Stenoak for reasons which Mr. Davidson explained in evidence and which I accept. Mr. Davidson did not receive a telephone call from Mr. Elms before 13 September 2001, or the letter dated 13 September 2001 requesting a meeting on 19 September 2001. Whether the letter was in fact sent, I do not know. I accept Mr. Davidson's evidence that he regarded this as an important contract for him, and that he would have gone to such a meeting if he had been invited to do so.

In the early evening of 19 September 2001 Mr. Davidson and Mr. Elms had a telephone call. The purpose of the telephone call was, as it turned out, for Mr. Elms to confirm, as Hanson's operations manager, that 'we' had won the M27 contract on the previous day, and to secure Mr. Davidson's service for the drainage channel work, at least in principle. This telephone call was not concerned with contractual matters, but to ensure in principle that Mr. Davidson was available and willing to carry out the work. This telephone call did not follow any meeting at Chipping Sodbury.

Mr. Davidson did attend a preliminary meeting with Mr. Doyle and Mr. Tuck on 28 September 2001. Mr. Elms did introduce himself on that occasion. The note in Mr. Elms' planner for 28 September 2001 was put there to remind him that he should meet Mr. Davidson.

As I have already found, there is no real disagreement as to what took place at the meeting. If I had found that the meeting took place on 19 September 2001, even taking this with the letter dated 13 September 2001, I would not have regarded the meeting as having the significance contended for by Hanson. The letter dated 13 September 2001 could properly, according to its purpose, simply be read as fixing a preliminary meeting at Hanson's offices. The meeting took place with Hanson personnel present. No-one present had any particular reason to remember the date. Mr. Davidson would have been entitled to, and would have assumed that, as in the past, at similar pre-contract meetings, his contract would be with Hanson.

After Mr. Davidson's meeting at Chipping Sodbury, he produced a method statement for the work which he was to undertake on the M27. The location was described as 'M27. Junction 2 - 4. Carriageway renewal for Hanson'.

On 8 October 2001, Mr. Elms sent Mr. Isaac a faxed message on a Hanson Construction Project header sheet. It said, "With regard to the above contract, please provide the following information where applicable by 15 October 2001 for your operation on the above contract." The contract is described as 'M27, Junction 2 - 4. Carriageway renewal'. I find that Mr. Davidson went into the meeting of 15 October, 2001 believing that he would be entering into a contract with Hanson if all went well.

The meeting on 15 October 2001 was thought by Hanson to be sufficiently important not only for a note to be taken in Mr. Doyle's daybook, but also for a copy of the note to be handed to Mr. Davidson as a note of the meeting. The meeting was attended by Mr. Doyle and Mr. Rudman. There was some suggestion at one point that Mr. Goodman was also present, but I find on the evidence that he did not attend. The note deals with the build-up of the agreed cost of the works, both in relation to drainage work and also work which Mr. Davidson was to undertake on the central reservation. The note makes no reference to Stenoak or AAL. If the intention of the Hanson personnel present had been expressed at the meeting to the effect that the contract was to be between Mr. Davidson and AAL/Stenoak, rather than Hanson, I have little doubt that this would have been recorded in the note which was given to Mr. Davidson at the end of the meeting.

Mr. Davidson's evidence of the meeting was clear. He was meeting Hanson personnel, negotiating terms with them and concluding a contract with them. He said that if he had been told that the contract was to be with Stenoak/AAL, and not Hanson, he would have objected because he would have wanted to negotiate a contract directly with Stenoak/AAL personnel in that event. He said in evidence that he would have refused to negotiate a Stenoak contract with Hanson personnel. I accept his evidence on this.

Mr. Doyle's evidence in his witness statement was that at the meeting, he explained to Mr. Davidson that the tender had been won by a joint venture of Hanson and Stenoak - Hanson was essentially doing the black top, with everything else being Stenoak's responsibility. He said at para. 27 of his witness statement, "As far as I was concerned (and I believe Mark Rudman also), we also agreed a price for the drainage contract work, and a sub-contract would be issued by Stenoak/AAL for the quantities and the rates indicated in the note".

In oral evidence Mr. Doyle was much less certain. He said tentatively, "I thought it was understood by both parties that he was contracting with Stenoak". I am satisfied that Mr. Davidson was not told that the contract was to be with Stenoak/AAL, and had no reason to believe that this was the case. Mr. Davidson was entitled to treat the offer from Mr. Doyle and Mr. Rudman as coming from their employer, Hanson, and to accept that offer, which he did. It is agreed by the parties that in such circumstances, such an acceptance created a contract between Mr. Davidson and Hanson.

From this time onwards I find that Mr. Davidson was clear in his own mind that he had a contract with Hanson.

As far as the evidence of Mr. Rudman is concerned, Mr. Palmer, Q.C. for Hanson, was commendably realistic in his final submissions in recognising that the Court would be very cautious in accepting his evidence. At the same time, he put forward very properly appropriate submissions relating to Mr. Rudman's evidence which I have taken into account. Mr. Rudman supported Mr. Doyle's evidence that Mr. Doyle had said that the contract would be with Stenoak/AAL. I reject his evidence on this, along with that of Mr. Doyle.

It is surprising that for the sake of good order, Mr. Doyle did not ensure that on the following day a letter was sent to Mr. Davidson confirming the terms of the sub-contract which had been agreed.

The next letter, dated 16 October 2001, was sent by Mr. Isaac. It is addressed to Hanson Construction Project at Chipping Sodbury for the attention of Mr. Elms. Hanson would, of course, be an inappropriate addressee if the contract had been agreed on the previous day to be with Stenoak/AAL. The letter sets out the personnel to be employed by Mr. Davidson on the project. Neither Mr. Elms, nor Mr. Doyle, made any attempt to point out that the letter should have been addressed to Stenoak/AAL.

As late as 30 October 2001 Mr. Isaac sent a letter addressed to Hanson, giving the National Insurance numbers of the employees of Mr. Davidson on site. Presumably by this stage, even if not on the day after 15 October 2001, Mr. Isaac must have talked to Mr. Davidson. Again, Mr. Isaac was not told that the letter should have been addressed to AAL/Stenoak as the party with which Mr. Davidson was contracting.

It is suggested by Hanson that around the time of the meeting of 15 October 2001 Mr. Rudman telephoned Mr. Davidson to try to persuade him to agree lower rates. Mr. Davidson declined to reduce his rates. It is then suggested by Mr. Rudman that he telephoned back to say that the rates for the drainage channel works were agreed, and that he was telephoning on behalf of Stenoak/AAL. I reject his evidence that he said he was telephoning on behalf of Stenoak/AAL. I am satisfied that at this stage that is at least until 30 October 2001 Mr. Davidson had no reason to believe that any one was suggesting that he had entered into a contract with anybody other than Hanson.

On 19 October 2001, a few days after the meeting on 15 October 2001, Mr. Rudman sent a fax to Mr. Webster at Stenoak requesting Mr. Webster to place the sub-contract with Stenoak. This request was passed through the Stenoak system. This fax was not copied to Mr. Davidson. There was no reason why it should have been.

On 1 November 2001 authorisation was given by AAL (Stenoak) to place a sub-contract with Mr. Davidson. Mr. Davidson was, of course, not aware of his decision. This marked the start of the next stage in the evidence.

On 6 November 2001, Miss Nikki Harman, wrote to Mr. Davidson 're. sub-contract order CF01451 - With regard to the above order, please find new account pack'. Mr. Davidson was asked to return it to Miss Harman as soon as possible. The letter enclosed a pro forma consent to self-billing arrangements for contracts with Associated Asphalt for a period from 19 August, 1999 to 30 January, 2003. The form was necessary to administer VAT for any sub-contract which Mr. Davidson might have with Associated Asphalt. It was signed by Mr. Isaac on 20 November 2001. The self-billing form gave Mr. Isaac as the contact. It set out PJ Davidson - Details - Trading Title, etc. Under '(6) - Type of Work', Mr. Davidson was asked to indicate the type of work for which he wished to receive inquiries. The form specified, 'Slip form paving and PQ contract'. The form made no reference to existing contracts.

The records show that Mr. Isaac made telephone calls to Henley-on-Thames on 8 November 2001, the first lasting forty-one seconds, followed by a second telephone call of forty-six seconds, and a third at 12.07 lasting 2 minutes and 17 seconds. Mr Isaac telephoned Miss Harman on behalf of Mr Davidson to query Miss Harman’s letter. Mr Isaac then spoke to Mr Davidson. It is said that Mr. Davidson refused to enter into a sub-contract with Stenoak-AAL and telephoned to that effect. This is disputed by AAL.

Associated Asphalt also say that Miss Harman sent Mr. Davidson a sub-contract order relating to the M27 Junction 2 - 4 works. It is not entirely clear, but it is dated 7 November 2001. It was signed by Mr. Seymour and Mr. Shires of Associated Asphalt. The work is described as 'To carry out slip form works to surface water channelling as required and in accordance with the main contract documents'. It makes no reference to work on the central reservation.

Mr. Davidson says that he never received the sub-contract order. There is no dispute that it was never signed or returned to Associated Asphalt. Although work on the central reservation was not referred to on the face of the sub-contract order, there is a reference to it 'subject to confirmation'. In an accompanying sheet the work carried a price of £127,963.50. The details of the sub-contract have 'Stenoak Associated Services and Hanson Construction Project in joint venture' as the contractor. The sub-contract works relate only to the water channel. The sub-contract makes specific reference to the sub-contract works being contained in AAL tender inquiry, dated 12 July, 2001 and PJ Davidson quotation, dated, 5 August, 2001 as subsequently amended by agreed rates and prices on an attached spreadsheet. The sub-contract starting date was specified as 22 October 2001. At p.10 the sub-contract order is specified as C5 01451 with Associated Asphalt as the contractor. As I have said, the body of the sub-contract was not signed by the contractor or the sub-contractor.

At a meeting of the Contractors' Management Committee on 7 November 2001, attended by Mr. Elms, Mr. Castle and Mr. Curran for Hanson, and Mr. Jones and Mr. Shires for Stenoak, it was reported that the contract for the slip form drainage channel had been placed with Mr. Davidson. No mention was made concerning the sub-contract for work on the central reservation. This may well have been because the use of concrete in lieu of macadam as the material for the central reservation had been identified as a potential saving.

In para. 6.01 of the minutes, it was noted that another contractor, CP Dynes, would not enter into a sub-contract with Stenoak, and that the drainage sub-contract with Dynes was to be placed with Hanson.

On 7 November 2001 Mr. Davidson started work on the M27. I accept his evidence that the instruction was given by Mr. Doyle. There is no suggestion that the person giving the instruction, whether Mr. Doyle or somebody else, said he was doing so on behalf of Stenoak. The work on the central reservation was delayed because the contract was running late. As a result, Mr. Davidson's slip form equipment was not available, and Mr. Doyle agreed with Mr. Davidson that the work should be carried out using the traditional hand-laying method, and the rate for the work would be amended accordingly.

On 15 November 2001 the joint venture agreement between Stenoak and Hanson was finally concluded, although the parties did not enter into a contract by deed until 20 November 2001. Under para. 7.3 it was agreed that all payments made by the Highways Agency as employers under the contract would be made to Stenoak. Within two working days of receipt of the money, Stenoak would pay to Hanson the proportion of each payment which was attributable to Hanson's part of the work. It was clear that under the joint venture agreement, Stenoak was under an obligation to pay its own sub-contractors, and Hanson would pay its sub-contractors. There was no joint pot.

The Bill of Quantities, dated 12 September 2001 had set out the allocation of the work/services to be provided by each of the joint venturers. Hanson was to supply the site agent (Mr. Doyle), the planner (Mr. Tuck), and a quantity surveyor (Mr. Rudman). It was to be responsible for the dense wearing course as part of the works on the central reservation to be carried out by Mr. Davidson. Under Item 11/001 the work on the drainage channels was to be the responsibility of Stenoak.

On 20 November 2001, Mr. Davidson submitted his first application for payment . The work related to the central reservation. It was headed 'Stenoak/Hanson Joint Venture. For the attention of Mark Rudman'. It was prepared after discussions between Mr. Davidson and Mr. Rudman. Mr. Rudman had agreed the measurement for the work. Mr. Davidson says that Mr. Rudman was a Hanson man, who said that he dealt with applications for payment. Mr. Davidson also says that Mr. Rudman explained to him that his contract would be with Hanson, but that under the joint venture agreement, Stenoak would be receiving payment from the employer, and would therefore be administering the payment to Mr. Davidson as a sub-contractor. There is some suggestion by Mr. Rudman that Mr. Webster played some part in the meeting. Mr. Webster has not given evidence.

I accept Mr. Davidson's account of the meeting. I am satisfied that if the suggestion had been made at the meeting that Mr. Davidson had contracted, or was now to contract with Stenoak/AAL, he would have protested that this was not the case, and there would have been some written follow-up (or meeting) from Mr. Doyle, Mr. Rudman or Mr. Webster, or perhaps even from Mr. Elms. There is a suggestion that a puzzle has been created which Mr. Davidson could only have resolved by discussing matters with Mr Elms or Mr. Doyle (unless he knew that he had a contract with AAL/Stenoak). I do not find that this is a correct analysis. Mr. Davidson had entered into a contract with Hanson on 15 October 2001. For him this would be the end of the matter.

The second meeting of the Project Management Committee took place on 12 December 2001. Work was already twenty days in arrears. The estimated completion date was 30 April, 2002 (para. 2.0.4). Although para. 4.2.1 of the Minute recorded that the order for the sub-contract for work on the slip form drainage channel had been placed, para. 4.3.4 noted that Stenoak had experienced some problems with the placing of orders and the payment of suppliers.

One of the problems related to the receipt of signed sub-contracts from sub-contractors. Mr. Webster (at that time employed by Stenoak, but from May 2002 by Hanson) asked Miss Harman to attend to this. The list did not include Mr. Davidson.

There is a suggestion that some time before Christmas, Mr. Davidson in the course of conversations with Mr. Elms, referred to the fact that CP Dynes had a sub-contract with Hanson rather than Stenoak. Mr. Davidson said that such a conversation did not take place. I prefer Mr. Davidson's evidence to that of Mr. Elms. I note that in oral evidence (as opposed to his written statement), Mr. Elms said that he did not have a clear memory of the conversation.

On 12 February 2002 Mr. Davidson submitted his second application for payment. The amount was £69,781.85 less retention. The application was drawn up by Mr. Rudman, and the measurement of the work was agreed between Mr. Davidson and Mr. Rudman. It was addressed to Stenoak-Hanson Joint Venture at the site works office, for the attention of Mr. Rudman. It was passed on by Mr. Rudman to Mr. Webster. The copy shows an internal endorsement for payment by Mr. Webster. This invoice was paid on 10 April 2002. The work related, in part, to work on the central reservation.

In the course of the work on the M27 Mr. Davidson's staff received instructions to carry out additional works. Confirmation notes were thought to be helpful in determining the contractual issues, but in the event do not assist me in reaching a conclusion as to whether Mr. Davidson was contracting with Stenoak rather than Hanson. They came from Mr. Saywell, a Davidson employee on site. The first is addressed to 'Clayton. AAL. M27 Contract'. The second, dated 24 January, 2002, is addressed to 'Clayton. AAL. Hanson. M27'. The third, dated 8 March, 2002, is addressed to 'B. Chandler. AAL Stenoak. No. 7'. The fourth, dated 15 March, 2002, is addressed to 'Clayton. Hanson/Stenoak. M27'.

Mr. Davidson's third application for payment in the sum of £79,760.54 is dated 1 April, 2002. As usual, it was marked for the attention of Mr. Rudman. It was clearly back-dated because it includes an item 'Add extra over for diverting resources as agreed by I. Elms on 22.4.02'. The works related both to the central reservation and the channel. The invoice was addressed to Stenoak/Hanson Highways Joint Venture, at the M27 site office. It appears from a fax message from Mr. Rudman that the invoice was agreed with Mr. Rudman on 23 April, 2002, and that Mr. Rudman sent it to Mr. Isaac with a note, "Please return application for payment as attached".

On 30 April, 2002 Mr. Rudman wrote a letter addressed to the Stenoak project director, Mr. Shires. The letter refers to a circular which Mr. Davidson had received. It went on, "By the same token, we also need to discuss extra works carried out on your behalf that have not been priced for, together with our late possession of the remaining work".

On 3 May, 2002 Associated Ashphalt sent a payment certificate and cheque for £75,777.51. The point has been made by Hanson that the fact that these payments were made by AAL and accepted by Mr. Davidson demonstrated that the contract was with AAL/Stenoak and that Mr. Davidson knew it. I do not accept this in the context of the evidence as a whole. All Mr. Davidson's dealings were with Mr. Rudman, who was a Hanson person. He was prepared to carry out the work only when Mr. Rudman explained to him, in November 2001, that Stenoak's role would be to sign the cheque, because Stenoak was being paid by the employer on behalf of both itself and Hanson.

In addition, Mr. Isaac gave evidence, which I accept, that it was not unusual for PJ Davidson to receive cheques from a company which was different to the one with which Mr. Davidson had contracted.

Mr. Davidson sent application for payment no. 4 in the same format as previous applications. It was back-dated to 17 May, 2002. It referred to Order C5 01451. The sum claimed was £61,657.71. The majority of the claim related to work on the central reservation. It was marked by Mr. Webster, 'Okay to pay (subject to a 5 percent retention)'. Mr. Webster had become a Hanson employee on 19 May, 2002.

On 6 June, 2002 Mr. Rudman sent an internal note on Stenoak-Hanson Highways Joint Venture notepaper. "Please raise an invoice for £52,000 and send by return of post/fax". This was the gross value of the invoice without VAT.

Mr. Davidson left site on 17 June 2002. By then there were rumours that Stenoak was in financial trouble. In relation to a conversation between Mr. Davidson and Mr. Doyle at that time, I prefer Mr. Davidson's evidence to that of Mr. Doyle, and find that there was a general conversation between them, in the course of which Mr. Doyle said that 'everything would be okay'.

Unfortunately, by letter dated 7 June, 2002, Hanson had to give Stenoak notice of default under the joint venture agreement. This notice appears to have been repeated by a letter dated 17 June, 2002. This was followed by a temporary stop on payments to Stenoak by letter dated 17 June, 2002. This, in turn, was followed by a payment deed acknowledging that the next instalment due from the Highways Agency on 13 July, 2002 should be paid to Hanson and not to Stenoak. It declared that a sum amounting to £2,776,588.54 may be deducted from the payment in satisfaction of the current indebtedness of Stenoak to Hanson. The balance of £458,821.62 was to be held by Hanson on trust for Stenoak until further sums became due from Stenoak to Hanson.

On 4 July, 2002 Hanson served a notice of termination under the contract.

In the meantime Mr. Davidson had made an application for payment no. 5. It is dated 14 June, 2002. It is marked for the attention of Mark Rudman. The invoice related to an application for payment of £50,886 plus VAT in respect of work on the surface water channel. The work had been measured and the figures had been agreed in advance by Mr. Rudman. The invoice was marked by Mr. Webster, 'Okay to pay'. Certificate no. 6, dated 27 June, 2002 was signed by Mr. Webster indicating a pay date of 19 July, 2002.

An internal memorandum from Mr. Elms to Mr. Doyle and Mr. Rudman, dated 12 July, 2002 indicated that any sub-contractors who felt that their debts should be honoured should state their case in writing to Mr. Elms.

After June 2002 Mr. Davidson complained to Mr. Elms on a number of occasions that he had not been paid. I am satisfied that this was not a specific complaint that he had not been paid by Stenoak, but rather that he wanted to be paid for the work which he had done.

In July 2002 Mr. Davidson telephoned Mr. Tuck to chase payment. In August 2002 there was a telephone conversation about payment between Mr. Davidson and Mr. Elms. In oral evidence Mr. Elms said that he did not recall whether Mr. Davidson said that his contract was with Hanson, or whether he had said that Mr. Davidson should look to Stenoak for payment. I am not sure that this conversation takes matters much further in any event. I am satisfied that at the relevant time, in October 2001, Mr. Davidson was clear that he had entered into a contract with Hanson. By August 2002 it was clear that Hanson was refusing to pay those it regarded as Stenoak sub-contractors.

Mr. Davidson consulted claims consultants. On 4 October 2002 he wrote to Henry Cooper (Consultants) Ltd. (Mr. Broughton). Mr. Broughton wrote to Mr. Castle at Hanson, saying that Mr. Davidson " ----concluded a contract with Hanson, either acting alone or, at worst, on behalf of the Stenoak-Hanson joint venture . . . at a meeting held on 15 October 2001, at Hanson's Chipping Sodbury offices with Messrs. Doyle, Goodman and Rudman (Hanson) in attendance". The letter went on to claim that Hanson should pay the agreed sum of £52,476.65 ex VAT submitted to the joint venture site QS on 17 May, 2002, and the sum of £50,886 ex VAT submitted on 14 June, 2002.

After further correspondence, Mr. Flowerdew, the partner in TLT Solicitors, who had been involved in the contract since the outset, wrote on 16 January, 2003, setting out Stenoak/Hanson's case - namely, that Mr. Davidson had given a quotation to Stenoak and that he was told unequivocally by Hanson employees acting as agents for Stenoak that he was being offered a Stenoak sub-contract, and that his work would be part of Stenoak's share of the work. Mr. Flowerdew went on to say that "he asked that the sub-contract should be with Hanson, and was told that this was not possible". He was then sent a pack of sub-contract documents, and he returned AAL's self-billing pro forma. This, TLT complained, acknowledged that Mr. Davidson's contract was with Associated Asphalt/Stenoak.

In the absence of progress the matter was referred by Mr. Davidson to Fenwick Elliott, his solicitors. By a letter dated 8 August, 2003 they set out Mr. Davidson's case that in October 2001 Mr. Davidson was approached by Hanson to provide a quotation not only for slip form surface water channels, but also for pavement quality concrete for the central reservation. A sub-contract was agreed orally by Hanson personnel and Mr. Davidson at a meeting in Hanson's offices at Chipping Sodbury on 15 October 2001. The contract was different in content and price to that which was the subject of Stenoak's invitation to tender in August 2001. In summary, Fenwick Elliott claimed on behalf of Mr. Davidson that Mr. Davidson's contract was with Hanson, and that he was entitled to be paid.

One comment made by Hanson should perhaps be addressed. In his witness statement, Mr. Doyle said that if Mr. Davidson had believed his sub-contract was with Hanson, he would have expected Mr. Davidson to approach him in May or June 2002 to ask what Hanson was up to, and what he, Mr. Doyle, was doing about it. As I have already indicated, I am doubtful how far this evidence would take me in any event. But, I note that Mr. Davidson had been paid for application nos. 1 to 3 by the beginning of May 2002. The final applications were made on 6 and 14 June, 2002, and were to be paid in July 2002. There would be no reason for Mr. Davidson to approach Mr. Doyle for payment in May or June 2002.

I received various submissions on the law, but in view of the fact that they related, almost exclusively, to the two issues which have not been pursued by Mr. Davidson, I have no need to go into them in this judgment.

It is clear from my findings of fact that Mr. Davidson entered into a contract with Hanson on 15 October 2001. It is pursuant to that contract that he claims the sum of £209,077.44 from Hanson. There is no dispute that Mr. Davidson carried out the work. In these circumstances I give judgment for the Claimant.