Greenore Port Ltd v Technical & General Guarantee Company Ltd

MR. JUSTICE JACKSON:

3 During the twentieth century Greenore Port was owned and operated by the claimant company, which was then called Greenore Ferry Services Ltd. Over time the port ceased to be a base for ferry boats and the port came to be used by cargo ships instead. The claimant company was predominantly a family company until it was sold to new owners in 2002. The name of the company was subsequently changed to Greenore Port Ltd.

6 Kirk McClure Morton are a firm of consulting engineers who acted for the claimant in connection with the renovation works. I shall refer to this firm as “KMM”. KMM acted as engineer under the construction contract with SAR. Norfolk Marine Ltd. was the contractor which carried out remaining works after the demise of SAR. I shall refer to this company as “Norfolk”. A separate contractor, called Irish Dredging Co. Ltd. (to whom I shall refer as “IDC”) carried out dredging works in Greenore Harbour. It is an issue in the case whether those dredging works formed part of SAR’s contract or whether they were omitted before SAR’s employment came to an end.

8 After these introductory remarks I must now turn to the facts.

References in the BQ to sections A and B are references to the eastern end of the quay. Section A extended westwards from Greenore Point for a distance of 98 metres. Section B extended westwards for a further 53 metres from the eastern end of section A. The remainder of the harbour renovation works which the claimant had in mind, namely sections C and D, formed no part of the contract and were deferred to a later date.

17 It can be seen from the correspondence and the site meeting minutes that SAR’s progress on site was slow and unsatisfactory. SAR’s plant and equipment frequently broke down, thus causing delays to the works. The piling hammer was found to be too small. The drilling rig, when it arrived, had an unsuitable drill bit. More drilling equipment and cranes needed to be brought to site, but there were long delays before these arrived. On 29^th November a crane overturned during the night, which did not help matters. A pile drop hammer fell into the sea. This needed to be retrieved from the sea bed and repaired.

19 In January 2001 Mr. Wilcox duly arrived on site and took charge of SAR’s team. It appears from the evidence that Mr. Wilcox secured an improvement in SAR’s performance, but the rate of progress remained slower than that required by the contract. Broadly speaking, the claimant formed a favourable view of Mr. Wilcox, but considered that SAR’s team on site was inadequately resourced and inadequately supported.

25 As SAR’s financial difficulties mounted, SAR requested financial support from the defendant. The defendant refused that request by a letter dated 2^nd July 2001. In the circumstances, the defendant took steps to protect its own position. In particular, the defendant took an assignment of debts from SAR. By letter dated 13^th July the defendant notified the claimant of that assignment.

30 After SAR’s departure KMM did not measure the quantity of work which SAR had executed up to 18^th July.

36 On 9^th August the defendant came onto the scene and sent the following letter to the claimant:

38 On 21^st August 2001 Ms. de Pasquale of the claimant and Mr. Wilcox of Norfolk both signed a letter recording the terms upon which Norfolk was engaged. That letter reads as follows:

40 The works carried out by Norfolk proceeded. Those works lasted longer and proved more expensive than had been anticipated. KMM certified that works were completed on 24^th October 2001. Norfolk remained on site with a reduced workforce after that date carrying out further works until 6^th November 2001. The total sum paid by the claimant to Norfolk, excluding certain payments in respect of plant, was £244,651.

41 The payments in respect of plant which now have to be disregarded came about in the following way. During the course of Norfolk’s works there was a dispute about title to the plant on site. Mr. Wilcox maintained that Norfolk had brought that plant from the administrator of SAR for £35,000, plus VAT. The claimant maintained that it had acquired good title to that plant pursuant to clauses 53 and 63 of the contract conditions. That dispute was compromised by an agreement that the claimant would sell the plant to Norfolk for £20,000 and the claimant would then pay £20,000 to Norfolk for hire of that same plant. Thus no money actually changed hands. During the course of the trial it was agreed that on this issue Mr. Wilcox was correct. Norfolk had indeed acquired good title to the plant from the administrator (see Smith v. Bridgend County Borough Council [2002] 1 A.C. 336). Accordingly, the cross-payments of £20,000 not only cancelled each other out but also achieved nothing.

44 As previously mentioned, the main dredging works were not undertaken either by SAR or by Norfolk. Instead the claimant engaged IDC to carry out as much of the specified main dredging work as was possible without carry out rock blasting. IDC duly carried out this work in October. Unfortunately there were rocks in the sea bed which could not be removed without blasting. Thus even after IDC’s services there remained pinnacles of rock in unfortunate locations within the berth. For this reason, only a very modest improvement was achieved in the loads which ships could carry when entering that berth. A plan showing the depths to which IDC dredged and the location of rock pinnacles is annexed to KMM’s valuation certificate relating to IDC’s work.

45 It can be seen from that certificate and the attached plan that the general dredging undertaken by IDC went to a substantially greater depth than that indicated in the BQ and the contract drawings. The general dredging was taken down to a depth of 8.2 metres. On the other hand, the rock dredging (item E125.1 in the BQ) was omitted. The claimant’s expert quantity surveyor, Mr. Alan Taylor, has demonstrated that the additions and omissions in respect of dredging approximately cancelled each other out. Overall the engagement of IDC to do the dredging work has neither contributed to the cost overrun on this project nor achieved a cost saving.

47 The claimant took the view that it had suffered substantial losses as a result of SAR’s failure to perform its contractual obligations. On the 23^rd April 2002 the claimant, by its solicitors, sent to the defendant a formal demand under the performance bond in the sum of £325,773.50. After further correspondence between the parties, on 25^th August 2003 the defendant wrote to the claimant’s solicitors denying any liability under the performance bond.

48 The claimant was aggrieved by the defendant’s refusal to honour the performance bond. Accordingly, the claimant commenced the present proceedings.

Part 3. The Present Proceedings

Part 4. The Claimant’s Factual Evidence

56 In this part of the judgment I shall summarise the claimant’s factual evidence. In so doing, I shall weave together the gist of each witness’ written statement and oral evidence.

DIARMUID O’LOAN

57 Mr. O’Loan is a civil engineer, specialising in marine engineering, employed by KMM. He was project engineer for the Greenore Port renovation works. Dr. Shaw of KMM was the supervising engineer, to whom Mr. O’Loan reported. The resident engineer on site was Ms. Rosie Griffin.

58 The renovation works consisted of (i) constructing a new steel wall in front of the existing stone masonry quay wall and (ii) dredging works.

59 Ancillary works forming part of the project included constructing a new concrete deck along the quayside, concrete crane rails, drainage pipework and fendering.

60 The works were divided into two parts, sections A and B. Section A of the quay wall needed to be completed before section B was started. This sequence was necessary to maintain shipping at the port. In the event the far end of the section B works (between piles 41 and 52) was not accomplished. As a result the main dredging between piles 42 and 51 was also omitted, although all of the PCB dredging was done.

61 SAR’s programme of works attached to the BQ showed a start date of 17^th July 2000. However, a formal commencement date of 31^st July was subsequently agreed. This resulted in a completion date of 14^th January 2001.

62 The claimant made substantial payments to SAR at an early stage of the contract. In particular, certificate 1 (dated 3^rd August 2000) included £493,350 in respect of mobilising plant and equipment.

63 At an early stage it became clear that SAR did not have the necessary experience and ability to manage the project on site. Also they could not get to grips with the financial management. From an early stage Mr. O’Loan lacked confidence in SAR’s site management and he also lacked confidence in SAR on the financial side.

64 Timely completion was important to the claimant, because of conditions attached to the EU grant aid, which was partly funding the project. Despite this, the project was delayed by a catalogue of failures on SAR’s part, which caused considerable delays. This included the overturning of a crane, insufficient drilling capacity and insufficient crane capacity. SAR was unduly slow in drilling sockets for the piles, which was a critical operation.

65 On 1^st September SAR made a claim under clause 12 of the contract for unforeseen ground conditions. KMM decided to allow four weeks extension of time in respect of this.

66 Delays by SAR continued. At a meeting in December Mr. Patterson agreed that the management of the site was under strength and said that Bill Wilcox would be brought in after Christmas to join the management team on site.

67 Mr. Wilcox came in January. He turned the situation around and got the works going. However, the claimant and KMM were still dissatisfied with SAR’s rate of progress and expressed this in correspondence in early 2001.

68 By April/May 2001 it became clear that SAR was in financial difficulties. In May the claimant had to step in and start paying for materials direct, in order to secure deliveries. This began when a lorry came to site carrying concrete. The driver refused to deliver unless he was paid. The claimant was annoyed, but in this situation it had to step in.

69 On the 2^nd May KMM issued valuation certificate 8. This was the last valuation certificate which KMM issued. It shows the total value of measured works as £2,890,352 (which was quite close to the original contract sum of £3,270,049).

70 At site meeting 27 on 16^th May Mr. Wilcox estimated that completion would be achieved by the end of June. However, this was not achieved since little work was done between then and mid-July. There was a further loss of confidence in SAR during this period.

71 On 26^th May SAR wrote to Dr. Shaw, admitting slow progress over the last two months and that SAR may not be able to complete the works. SAR also asserted that a 4 week extension of time had been agreed in respect of the third crane rail (V.O. 7).

72 It was correct that there had been indecision by the client about its detailed requirements for the third crane rail, but it was not correct that KMM had agreed any extension of time. The work in question involved installing a concrete beam to carry the crane rail and thickening the concrete deck slab in that area, in order to support the weight of the crane. The client’s indecision had delayed this work, but that delay was concurrent and should not have affected the overall completion date. What KMM agreed to do was to pay the costs associated with that concurrent delay. These costs amounted to £28,845, as set out in re-issued V.O. 7. Mr. O’Loan remains of the view that SAR was not entitled to any extension of time in respect of V.O. 7 and the third crane rail.

73 At a site meeting on 30^th May Mr. Patterson said that there was a winding up order against SAR and SAR’s bank accounts were frozen. Subsequently a validation order had been made to unfreeze the accounts. SAR had cash flow problems. It had not paid wages for a month. SAR accepted responsibility for all delays on the project. Mr. Patterson went on to say that SAR was committed to completing the project and he produced a programme to completion. All of these matters are recorded in the minutes of the meeting.

74 Mr. Wilcox said on that occasion that the main dredging work would be welcome. A barge and crane were ready to come to site. Mr. O’Loan said that there was £260,000 remaining in the dredging. These comments are recorded in the manuscript meeting notes, and summarised in the formal minutes. It was also noted at the meeting that dredging would not be done beyond pile 41. This was because works to the quay wall were now going to stop at pile 41.

75 In a letter to Dr. Shaw dated 1^st June Mr. Wilcox, writing on behalf of SAR, stated that claims had been resolved. Mr. O’Loan has no reason to doubt that that was correct. Mr. Wilcox also suggested in the letter that a payment/deduction schedule to completion be prepared. However, that was not produced.

76 On 6^th June Mr. O’Loan sent draft valuation sheets to SAR. This was KMM’s last assessment of SAR’s work. It showed that most of the PCB dredging was complete. Nevertheless the last bit of PCB dredging, namely the bottom layer, is the most difficult to accomplish.

77 On 10^th June Mr. Patterson submitted his draft measurement of the works. At this time Mr. Patterson was spending little time on site and had much less knowledge about the works than Mr. Wilcox. In his covering email of 10^th June Mr. Patterson asked Mr. O’Loan to make a decision about extension of time. This was because the question of extension of time had not been finally decided.

78 Mr. O’Loan did not produce any assessment in response to Mr. Patterson’s submission. Furthermore SAR never asked for another assessment.

79 On 12^th June Mr. Patterson told Mr. O’Loan about the possibility of a creditors voluntary arrangement. On 13^th June SAR submitted “BOQ no. 9”. This was an assessment of the value of works to date, which showed that a minus sum was due. Therefore after 13^th June, there was no point in KMM doing any interim valuation.

80 During June the claimant started paying wages direct to SAR’s workforce. This was necessary to keep work progressing. From about mid-June there was an understanding with SAR that the claimant would pay all wages and associated costs. It can be seen from the records that the claimant made substantial payments during June, both in respect of wages and materials.

81 Attached to DWF’s letter to SAR dated 29^th June there was a spreadsheet prepared by Mr. Patterson dated 27^th June 2001. This spreadsheet lists eight men who were working at Greenore. These people remained on site, first under SAR and later under Norfolk. The spreadsheet records that the client would be paying all associated costs up to the completion of main decking works. That was correct. There was an agreement that the claimant would pay labour direct and all the cost of materials up to completion of main decking works. But there was always going to be a reckoning at the end of the job. If SAR had stayed, the work was always going to be measured at the end.

82 Mr. Patterson’s spreadsheet also records that the main dredging works (which would be profitable) had been excluded. That was correct. The claimant decided to take dredging works out of SAR’s package, because the claimant had no confidence in SAR. Alternatively, it may be that the main dredging was never omitted from SAR’s contract, since there is no VO to this effect (whereas there are VOs omitting the supply of concrete and steel from the scope of SAR’s works). It may be that dredging was only omitted when Norfolk came onto the scene, in that dredging was not an item of work entrusted to Norfolk. Mr. O’Loan is not entirely clear in his recollection about this matter.

83 The claimant paid approximately £60,000 to SAR between mid June and mid July 2001. So SAR was doing some work in that period, but not enough. SAR did not get more people in. However, there are no meeting minutes or correspondence during this period in which KMM complain about SAR’s delay on the project. Nor was any extension of time awarded. The top priority was to progress the works.

84 On the 18^th July SAR stopped work. Mr. O’Loan did not measure SAR’s work on that date, because the position was that SAR had been overpaid. Nevertheless Mr. O’Loan accepts that he ought to have done a measurement of works on the date that SAR stopped.

85 On 18^th July SAR faxed a letter to the claimant, saying that its insurance cover had been withdrawn and that it had to stop work until insurance cover could be put in place. Insurance is basic for a construction contract. Mr. O’Loan took the view that SAR had abandoned the contract, but nevertheless the contract remained in force until it was formally terminated.

86 On the same day there was a site meeting at which it was said that SAR was about to go into liquidation or administration. Mr. Wilcox (speaking on behalf of SAR) said that there were two options: (i) set up a new company to purchase SAR’s plant and then complete the works; (ii) the administrator could run the contract on behalf of SAR. Mr. O’Loan noted a third option, namely that the claimant kept SAR’s plant and completed the works. Mr. Wilcox suggested a further option, namely that his company, Norfolk, finish the contract, using the existing labour force. Mr. Wilcox said that he could obtain insurance. In proposing this, Mr. Wilcox was speaking on his own behalf.

87 Following the meeting the claimant decided to adopt the proposal that Norfolk should complete the work. Ms. de Pasquale effectively took this decision on 19^th July when she paid £10,000 to Norfolk to cover the insurance premium.

88 Norfolk duly obtained insurance cover on 20^th July. In fact, it now appears from the time sheets that Norfolk did some work (namely toyo pumping) on 19^th and 20^th July, while still uninsured. Mr. O’Loan was unaware of this at the time. On Monday 23^rd July Norfolk started work in earnest. The hours worked by Norfolk’s men from then on are recorded in Norfolk’s timesheets, although many relevant details are omitted. Norfolk submitted invoices to the claimant for work done on a time basis. Norfolk’s first invoice was 31^st July and covers the whole of July (i.e. including two weeks when SAR was still contractor).

89 Mr. O’Loan gained the impression that Mr. Wilcox did not tell either SAR or the administrator that Norfolk was taking over the work. Indeed, he is unaware of anyone ever telling SAR about this development. Mr. O’Loan regarded the formal termination of SAR’s contract as “paperwork”, which had to await the outcome the current court proceedings concerning SAR’s insolvency. On 25^th July Mr. O’Loan learnt that SAR had gone into administration. He then set about drafting a letter under clause 63 of the contract, which would lead to termination.

90 On 26^th July Mr. Patterson telephoned Mr. O’Loan. Mr. Patterson said that the claimant had three options: (i) let administrator run the contract; (ii) let a new SAR company run the contract; (iii) determination of the contract by the engineer, for which there were “more than sufficient grounds”. Mr. Patterson also said that SAR’s insurances were now in place, but Mr. Patterson subsequently discovered that this was untrue. Mr. O’Loan listened during this conversation and said little. He did not reveal that Mr. Wilcox’s company, Norfolk, had taken over the work.

91 On 30^th July Dr. Shaw sent the clause 63 letter. Mr. O’Loan had done the first draft. That draft had subsequently been considered and amended by the claimant’s solicitors. That letter was intended to reflect the wording of clause 63. It was also a fair summary of the events which had occurred. Mr. O’Loan thought that sub-paragraph (d) of clause 63 (1) was appropriate to the circumstances.

92 On 31^st July the claimant wrote to SAR under clause 63 giving seven days notice of its intention to expel the contractor from site. Mr. O’Loan does not accept that the correspondence sent under clause 63 was a sham. He regarded it as necessary paperwork in order to bring SAR’s contract to an end, for which there were more than sufficient grounds.

93 SAR sent an invoice showing that £76,522 was due to it on 18^th July. Mr. O’Loan did not agree. In his view SAR had been overpaid.

94 The contract with Norfolk was on the basis of the claimant paying the actual costs of labour and materials. KMM and the claimant never considered pressing Norfolk for a lump sum contract. There was only a small amount of work left to do. It was necessary to keep the co-operation of the labour force by employing them in the same terms. In hindsight Mr. O’Loan can see that a lump sum contract would have been sensible. Nevertheless Mr. O’Loan considers that they acted reasonably in engaging Norfolk upon the terms which were agreed. The rates of payment for the workforce were properly negotiated.

95 The scope of works to be done by Norfolk was set out in Ms. de Pasquale’s letter to Mr. Wilcox dated 20^th August. When this letter is read in conjunction with plans and other data available, the work to be done by Norfolk is defined reasonably clearly. The final version of this letter (which was signed by both parties on 21^st August) omitted the sentence “We estimate a total of 10 weeks shall be necessary”. This was probably because Ms. de Pasquale wanted to keep open the possibility of Norfolk finishing sooner.

96 In the meantime, while arrangements with Norfolk were being put in place, the claimant received a rather odd letter from the defendant proposing to complete the works, at no additional cost, using a company called BME Contracting Ltd. This letter was dated 9^th August. By then Norfolk was engaged upon the work. The claimant was suffering huge losses by reason of the delays. Ms. de Pasquale wanted to get shipping back into the port as soon as possible. In those circumstances Ms. de Pasquale dismissed the defendant’s offer out of hand. Mr. O’Loan subsequently learnt that Mr. Patterson (in whom the claimant had lost confidence) was a director of BME.

97 Norfolk duly carried out the work which had been agreed between the parties. Norfolk’s works were substantially completed by 24^th October, but two further weeks were needed in order fully to complete section B. Thus in all Norfolk took 16 weeks for their works. The total payments made to Norfolk amounted to IR £244,792. Mr. O’Loan did not do a measurement or re-measurement of the actual work done by Norfolk. Nor did he ever do a measurement or re-measurement of the total work done by SAR.

98 During the course of Norfolk’s works there was a problem concerning plant and machinery. Norfolk had paid £35,000 to the administrator of SAR in order to purchase the plant which SAR had left on site. The claimant maintained that it had already acquired good title to the plant under clause 53 of the contract and thus Norfolk’s “purchase” from the administrator was ineffective. Mr. Wilcox took strong objection to this. In the event a commercial deal was done between Norfolk and the claimant, in order to keep the project moving. Under this deal Norfolk purchased the plant from the claimant for £20,000 and then the claimant paid £20,000 to Norfolk in order to hire back that same plant. Thus no money actually changed hands and Norfolk retained the plant for which (rightly or wrongly) it had paid £35,000 to the administrator.

99 In the last two weeks of Norfolk’s contract remedial works were carried out because three rectangular piles holding the closer panels at the west end of the new quay wall had slipped outwards. This problem was partly of SAR’s making and partly of Norfolk’s making. This remedial work should not be charged to SAR (although no credit has been given for it in the present claim).

100 The main dredging work did not form part of Norfolk’s contract. This work was carried out by Irish Dredging Company, although the blasting dredging and disposal of rock was omitted from that exercise. As a result of that omission the final depths to which the berth pocket was dredged were somewhat uneven. This is illustrated on the drawing annexed to KMM’s certificate of valuation for Irish Dredging Company’s works, dated 6^th December 2001. Mr. O’Loan considers that much of the benefit of the port renovation works has been lost, because pinnacles of rock remain sticking upwards from various parts of the sea bed.

101 More recently, for the purposes of this litigation, Mr. O’Loan has prepared a “notional final account”. This is Mr. O’Loan’s assessment of what the claimant would have paid to SAR, if SAR had completed the contract works. The bottom line figure is IR £3,278,037.

102 Mr. O’Loan has also prepared a summary of the actual costs which the claimant has incurred in carrying out the port renovation works. This summary includes sums paid to SAR, Norfolk, Irish Dredging Company, sums paid direct to suppliers of materials and so forth. These costs total £3,604,545.

103 These figures have been the subject of subsequent examination by the experts and discussion between the parties. Although Mr. O’Loan has given detailed written and oral evidence about (a) the constituent elements of the notional final account and (b) the actual costs incurred, I shall not summarise that evidence at this stage. I take that evidence into account and I will refer to that evidence, in so far as it becomes necessary, when dealing with quantum issues.

MS. VANESSA PRICE

104 Ms. Price has been employed by the claimant as financial controller since 1993. She is the niece of Ms. de Pasquale, who was chief executive of the claimant at the time of the construction works.

105 The claimant secured EU grant aid in the sum of IR £1,458,000, which was just under half of the anticipated cost of the project. The original deadline imposed by the EU for completion of the works was 30^th June 2000, but this was progressively extended.

106 The principal berth at Greenore was at the site of the renovation works. There was also a secondary berth (“berth 2”) to the west of that area. The closure of the principal berth during the course of the works put considerable pressure on the claimant’s business. This pressure became more acute, as the construction works were delayed and extended.

107 SAR, the contractor, fell into financial difficulties. From May 2001 the claimant was paying SAR’s contractors direct. From June the claimant was paying wages to SAR’s workforce. The claimant only paid net wages to the men, leaving SAR to account to the Revenue for the income tax and National Insurance contributions which were due. The claimant made these various payments under pressure and in response to the situation. It was an emergency measure and a matter of expediency. The claimant hoped that SAR’s financial position would improve and that SAR would resume paying the labour force and the suppliers of materials. There was never any agreement between the claimant and SAR to change the basis of SAR’s contract, so as to put responsibility on the claimant to pay suppliers and workmen (as suggested by the defendant’s counsel).

108 SAR’s letter to the claimant dated 18^th June 2001 confirmed that the original contract remained in place. That reflected Ms. Price’s understanding.

109 The various wages payments which the claimant made in June and July were necessary. Otherwise the workmen would leave site.

110 During June and early July there was no correspondence sent to SAR complaining about lack of progress. The situation at that stage was critical. Ms. Price and Ms. de Pasquale were in constant communication with Mr. Wilcox on site. They were satisfied with Mr. Wilcox as site manager. They felt that SAR’s problems were financial management and cash flow.

111 There was never any agreement to exclude the main dredging from the scope of SAR’s works. The main dredging works were part of SAR’s contract. However, SAR showed no inclination to do the dredging. They never brought the necessary plant to site. In June and July the claimant’s main focus was upon getting the quay wall finished. Nevertheless dredging was never omitted from SAR’s contract. Such discussions as the claimant had with IDC in and around May 2001 were exploratory and did not mean that dredging had been taken away from SAR.

112 On 18^th July SAR’s insurance cover was withdrawn. SAR ceased working at Greenore and abandoned the contract.

113 Ms. Price attended the site meeting on Wednesday 18^th July 2001. It was at around mid-day. She knew before the meeting that SAR’s insurance cover had been withdrawn. It was clear at the meeting that there would be a court hearing on Monday 23^rd July regarding SAR’s continued existence. Ms. de Pasquale said it would be a matter for the directors of the claimant whether to allow the administrator of SAR to continue the contract. At that time Ms. de Pasquale was in almost constant telephone contact with all board members.

114 Mr. Wilcox’s proposal for a new contract with Norfolk to undertake the remaining works was considered at the meeting, but no decision was taken. After the meeting Ms. de Pasquale discussed the matter with Ms. Price and decided to adopt that course. Only a small amount of work was still remaining and it did not seem sensible to go out to tender in respect of that.

115 It would not have been feasible to negotiate a fixed price or a fixed term contract with Norfolk. Norfolk was Mr. Wilcox’s company. Mr. Wilcox was a working man. He had no head office and no competence to manage a fixed price or fixed term contract. Mr. Wilcox would not have been interested in such a contract. The only arrangement with Mr. Wilcox which was feasible was one whereby the claimant paid Norfolk for labour and paid for materials direct. It is not right (as suggested by the defendant’s counsel) that the claimant failed to take reasonable precautions, because it knew it would recover under the bond. The bond was not uppermost in the claimant’s thinking.

116 The claimant’s overriding concern was to get the construction works finished and the port operating again. Mr. Wilcox had the upper hand in negotiations. At that time there was a boom in the Irish economy and labour costs were rising.

117 There was a hiatus before Mr. Wilcox was able to procure insurance cover for Norfolk. During that hiatus some toyo pumping was done to remove PCB contamination. This work was done using the claimant’s crane and driver. Ms. Price is confident that it would have been covered by the claimant’s own insurance. That apart Mr. Wilcox’s labour force were simply paid for standing by.

118 KMM did not measure the works at the time when SAR ceased working. Measurement was something which Ms. Price associated with payment. But no payment was owing to SAR. The claimant knew what works remained to be done on site. No measurement was required for the purpose of entering into a new contract with Norfolk.

119 On Monday 23^rd July there were court proceedings in England and SAR went into administration. The view taken by Ms. de Pasquale and Ms. Price was that SAR had abandoned the contract, but the contract remained in existence until it was formally terminated. Accordingly, following SAR’s administration on 23^rd July, steps were taken by KMM (on whom the claimant placed reliance in its dealings with SAR) to effect formal termination. KMM sent its formal clause 63 letter on 30^th July. On looking at that letter now, Ms. Price agrees that it was somewhat farcical to talk about expelling SAR from site, because SAR had already abandoned the contract. There had been no contact with SAR since 18^th July, apart from one telephone call from Mr. Patterson to Mr. O’Loan on 26^th July. That telephone call reinforced the claimant’s worst fear about SAR and its directors.

120 In the meantime Mr. Wilcox’s team, operating under Norfolk, proceeded with the works. Ms. Price did not think that Mr. Wilcox was acting against SAR’s interest, since SAR was now unable to perform the contract.

121 On 31^st July Norfolk submitted an invoice for the whole of July. This included two weeks when the workmen were employed by SAR. The claimant probably agreed to pay for those two weeks under pressure from Mr. Wilcox. Mr. Wilcox said to Ms. Price on at least one occasion that if he could not get wages to the workers on site, the men would leave and the claimant would not have the works completed.

122 On 9^th August 2001 the defendant sent a letter offering to complete the works at no additional cost using a company called BME Contracting Ltd. At first site this looked like a wonderful promise. However, the claimant was advised that such an offer from a bondsman was unusual. The company, BME Contracting Ltd, was unknown. The contact address given was in Geneva. On further consideration, the defendant’s letter looked like a ruse to get out of the bond. The position was that SAR had abandoned its contract and imperilled the claimant’s business. To switch from Norfolk and to go down another route using an unknown contractor with dubious motivation would have been commercial suicide. Also Ms. Price was concerned about the way in which the defendant’s letter was phrased. It appeared to be an attempt to dictate what the claimant should do. Ms. Price understood that the claimant was entitled to appoint a replacement contractor of its own choosing. Accordingly the claimant replied on the same day, rejecting the defendant’s proposal.

123 Ms. Price subsequently learnt that Mr. Patterson was a director of BME.

124 The agreement with Norfolk was signed on 21^st August. This did not include any reference to an estimate of 10 weeks, although this had appeared in earlier drafts. Ms. Price does not recall Ms. de Pasquale saying that this should be omitted. However, it was their hope that the remaining work could be completed in less than 10 weeks.

125 By the time Norfolk was working on site Ms. Rosie Griffin, the resident engineer, had departed. She was a luxury which the claimant could no longer afford. During this period Mr. O’Loan continued to make regular visits to site. Also Ms. de Pasquale checked up on progress regularly and inspected the works. The claimant had previous experience of managing construction works on site during the 1990s.

126 While the construction works were in progress the claimant suffered substantial loss of business and substantial loss of profits.

127 In October 2001 an agreement was reached for the sale of the claimant company and its business to new owners. The purchaser was Renore Ltd, a company half owned by Dublin Port Company. The purchaser did not wish at that stage to go ahead with rock dredging (i.e. the part of the main dredging which IDC did not accomplish). This could be done at any time and was regarded as non-essential. The claimant company both under its original ownership and under its new ownership did not have ready funds available for rock dredging.

128 In April 2002 the sale of the claimant company and its business to Renore Ltd was completed. In the same year the claimant bought a special crane which made it possible to unload the bow of a ship quickly, i.e. before low water. This ameliorated the problems caused by having insufficient draught in the berth.

129 The present plan is that in 2007 the claimant will refurbish the remainder of the quay wall and at the same time do all outstanding dredging work.

PATRICK SAVAGE

130 Mr. Savage is the bulk materials handling manager at Greenore Port and has been employed by the claimant since 1974.

131 Berth 1 at Greenore is the principal berth. Berth 2, to the west is a “NABBSA” berth, which means that at low water vessels there sit on the mud. This berth is only suitable for small coasters.

132 The claimant has two main customers, who account for 99% of its business, namely Cefetra Ltd and Arkady Feed Ltd. These customers import the ingredients of animal feed, which are stored in various warehouses quite close to Greenore. Because of the restricted draught at Greenore Port, customers often have to offload part of their cargoes at other ports before arriving at Greenore.

133 Before the port renovations works were carried out the draught available for ships was 3.6 metres (fore) and 6.5 metres (aft). To this there had to be added an allowance for tides. The purpose of the dredging works was to achieve an available draught, both fore and aft, of 7.5 metres.

134 In the event SAR did not do the dredging works provided for in its contract. IDC was brought in as a rescue measure to carry out dredging. IDC brought in a platform with a back hoe excavator. The understanding was that IDC would get out whatever it could with that plant. In the event IDC was unable to remove a pinnacle of rock in the aft area. The result is that the available draught aft remains at 3.6 metres plus an allowance for tide.

135 IDC advised the claimant that blasting was necessary to get out the pinnacle of rock in the aft area and all the sections of rock which had been exposed by IDC’s dredging. Before carrying out such blasting, it would be necessary to bore a line of holes in front of the quay wall. This would insulate the quay wall from the shock of the blasting.

136 The claimant has decided that the sensible way to proceed is to do all the remaining work at the same time. In other words, the claimant will (a) renovate the section of quay wall between piles 41 and 52, and (b) carry out all remaining dredging (including rock blasting) along the whole length of the principal berth as far as pile 52.

137 Mr. Savage has been asked to consider what losses the claimant has suffered by reason of the fact that rock dredging as far as pile 41 was not carried out by October 2001.

138 The claimant has suffered losses as a result vessels being diverted to other ports and also because of the need for weekend working. These are all losses attributable to the restricted draught at Greenore, but Mr. Savage cannot put figures on these losses. So instead Mr. Savage has gone back through the claimant’s records from October 2001 onwards and looked at vessels which have actually arrived at Greenore. He has calculated the extra tonnage which, he believes, each vessel would have carried into Greenore and unloaded if it had been possible for ships to enter the berth on an even keel with a 7.5 metre draught. These details are set out in a schedule, which indicates a total tonnage “lost” between October 2001 and December 2005 of 210,385 tonnes. Taking a conservative profit figure of 1.5 euros per tonne, the total loss of profits in that period amounts to 315,577 euros.

139 Mr. Savage was, quite properly, pressed in cross-examination about the details of his schedule and its underlying rationale. It is not necessary for present purposes to set out the detail of that cross-examination.

Part 5. The Defendant’s Factual Evidence

140 In this part of the judgment I shall summarise the defendant’s factual evidence. In doing so, I shall weave together the gist of each witness’ written statement and oral evidence.

MARTIN ATHEY

141 Mr. Athey is a solicitor and the company secretary of the defendant.

142 The defendant issues about 500 performance bonds per year, mostly in the field of construction. So the performance bond issued to SAR in respect of the Greenore project was part of the defendant’s routine business.

143 Mr. Athey had no involvement in this matter when the bond was issued, apart from writing one standard reference letter in September 2000. The various securities which the defendant took in respect of its liability under the bond (personal guarantees from directors and so forth) were quite normal. Mr. Athey was not aware then that SAR was in financial difficulties, but that was not necessarily a relevant factor.

144 In June 2001 Mr. Athey was copied in on a letter revealing SAR’s financial difficulties. However, Mr. Athey had no other involvement at that stage.

145 In August 2001, after the demise of SAR, SAR’s directors approached the defendant with a proposal that they should form a new company, which would complete the Greenore contract. This proposal was in the defendant’s interest, since it had given a performance bond.

146 The defendant called upon the personal guarantees and the other securities which it had taken in respect of the bond.

147 Mr. Athey understood from his colleague, Ian Smith, that the claimant’s termination of the construction contract had caused the demise of SAR. Mr. Smith was more involved with the Greenore contract than Mr. Athey. Mr. Smith is still employed by the defendant and Mr. Athey does not know why Mr. Smith is not giving evidence.

148 As proposed by the SAR directors, a new company was duly incorporated and it was known as BME Contracting Ltd (“BME”). Mr. Athey and Mr. Thorneycroft (an accountant) joined the board of BME as representatives of the defendant.

149 A proposal was made to the claimant that BME should complete the Greenore contract at no additional cost. Mr. Athey discussed this proposal briefly with Mr. Denham, Mr. Sims. and Mr. Patterson, but they probably discussed the matter in greater detail with Mr. Smith. Mr. Athey did not go into details of costings or how BME would do the work.

150 The defendant’s letter to the claimant, proposing that BME should do the work, was dated 9^th August 2001. That letter did not state that the Greenore contract had changed to an agreement on a labour basis only. Mr. Athey does not know why that letter was not phrased as an offer.

151 The proposal that BME should do the remaining work was not accepted. Mr. Athey was surprised, some years later, to learn that the contract for the remainder of the work had been awarded to Norfolk. Mr. Athey was also surprised to learn that the Norfolk contract was on the basis of a daily rate, when BME had been willing to complete the works within the original contract price.

ALLAN DENHAM

152 Mr. Denham is a civil engineer, who was employed by SAR from 1999 until the demise of that company. He was a director of SAR from February 2001 onwards. During that period SAR was not cash rich. Times were hard.

153 Mr. Denham had much less involvement in the Greenore contract than Mr. Wilcox and Mr. Patterson. Mr. Denham spent most of his time at another of SAR’s sites, namely the Uig Ferry Terminal on the Isle of Sky. Mr. Denham was responsible for running the Uig contract.

154 During 2000 Mr. Denham looked at the Greenore documentation and provided the engineering methodology which was the basis of SAR’s tender. The geological information provided by the claimant for tenderers was of poor quality and inaccurate.

155 Mr. Denham did not do the pricing for the Greenore works. However, he

notes that one item of work which SAR priced in the BQ was a survey to ascertain the location of the rock head.

156 In July 2000 SAR had some difficulty paying for the performance bond. There was a delay in paying part of the sum which was due to the defendant. Generally it was Mr. Patterson who dealt with these matters.

157 It was the claimant’s job to obtain a foreshore licence. This was necessary before SAR could start work. There was some delay in obtaining the foreshore licence. It can be seen from the correspondence that the licence still had not been obtained on 24^th July 2000.

158 Mr. Denham recalls visiting site twice in 2000, namely in August and around Christmas. Mr. Denham also recalls that the rock head turned out to be lower than anticipated. This necessitated a re-design of the piles (to accommodate greater pile length) and caused delay to the works. Mr. Denham discussed with Mr. O’Loan the possibility of lodging a clause 12 claim in respect of this matter, but Mr. O’Loan said that Ms. de Pasquale would not consider such a claim.

159 Mr. Denham believes that the cost and delays attributable to the poor quality of the design information provided to SAR on the Greenore contract was one major factor which contributed to the failure of SAR. Another major factor was a problem which occurred on the Uig contract.

160 Mr. Denham is surprised now to see documentation indicating that the Engineer accepted SAR’s clause 12 claim on Greenore and granted 4 weeks paid extension of time.

161 Mr. Denham now sees from the correspondence bundle that SAR was paid virtually all the money that it applied for during the Greenore contract (including the interim payments requested in respect of variations and claims). He was not previously aware of this.

162 Mr. Denham recalls visiting Greenore once during 2001. That was towards the end of the contract, when Ms. de Pasquale was getting upset about the slow progress.

163 During 2001 SAR’s financial difficulties increased. In June the claimant was making direct payments to SAR’s workforce and also to suppliers of materials. On 18^th June 2001 Mr. Denham and Mr. Wilcox signed a letter to SAR assuring SAR that this was all pursuant to the contract.

164 It can be seen from the correspondence that on 2^nd July 2001 the defendant refused to provide financial help to SAR. That must have been a huge blow to SAR. In July 2001 SAR came to the end of the line. SAR did not have the funds to continue or to pay anybody. When the insurance cover for Greenore fell due for renewal on 18^th July, SAR could not afford to pay the premium. Mr. Denham had regular discussions with Mr. Wilcox. He would have told Mr. Wilcox that work was stopping at Greenore.

165 At the end of July 2001, rather surprisingly, the claimant purported to terminate its contract with SAR.

166 The administrator of SAR never suggested that he would run the Greenore contract.

167 After discussions with the defendant, the directors of SAR formed a new company known as BME Contracting Ltd (“BME”). Mr. Wilcox was asked to become a director of BME, but he chose not to do so.

168 On 9^th August 2001 the defendant made an offer to the claimant that BME would complete the Greenore works at no extra cost beyond the originally agreed contract price. Mr. Denham was amazed that the claimant did not accept this proposal.

169 If BME was going to complete the Greenore works on the terms suggested, it would require funding from the defendant. Mr. Denham understood that the defendant would provide financial support, but he does not recall that the defendant ever made an offer of funding.

Part 6. The Termination Issue

170 It is clear that, one way or another, SAR’s contract for the renovation works came to an end. Several theories of how and when that contract was terminated have been put forward. The principal analyses which have been canvassed in argument are as follows:

171 I make the following findings of fact which are relevant to the termination issue. On 18^th July 2001 SAR’s insurance cover lapsed because SAR was unable to pay for further insurance. On that date all of SAR’s available funds were exhausted and all of the employees whom SAR had on the Greenore site were informed that they were laid off. Mr. Wilcox remained a director of SAR, albeit receiving no payment for his services as director. On that date it was inevitable that SAR would go into either administration or liquidation within the next few days. There was no realistic prospect that SAR would be able to resume work at Greenore. It was theoretically possible that if SAR went into administration, then the administrator might decide to perform the Greenore contract. However, the circumstances in July 2001 were such that no reasonable administrator would decide to take that course.

172 Let me now turn to the legal position. SAR’s conduct on the 18^th July amounted to a repudiation of the contractor. Accordingly the claimant became entitled immediately to accept SAR’s repudiation and bring that contract to an end. Nevertheless, it is clear from the documents and from the evidence given at trial that no one who was present on the 18^th July understood the legal position. There was a shared belief on the part of the representatives of the claimant, KMM and SAR that the construction contract would have to remain in force until (a) SAR had gone into administration or liquidation, and (b) the engineer and the claimant had served notices pursuant to clause 63.

173 Following the meeting of 18^th July the claimant decided to adopt the suggestion made by Mr. Wilcox that his company, Norfolk, should take over the existing labour force and complete the renovation works. The precise moment at which the claimant made this decision is unclear. The claimant crossed the Rubicon on either 19^th or 20^th July, when it transferred to Norfolk the approximate cost of obtaining employer’s liability insurance and public liability insurance. By a facsimile timed at 4.58 p.m. on Friday, 20^th July, Offshore Marine Insurance Services Ltd. confirmed to Norfolk and to the claimant that insurance cover was in place. In my view, the claimant would not have paid money for the insurance premium to Norfolk unless the claimant had definitely decided to engage Norfolk for the future works.

174 It can be seen from the work sheets that on 18^th, 19^th and 20^th July Mr. Wilcox and his team of nine workmen were simply standing by, because no insurance was in place. The only activity on site was PCB pumping, which was being carried out by the claimant’s driver using the claimant’s crane. The work sheets reveal that Mr. Wilcox’s team did some substantive work over the weekend, 21^st to 22^nd July. On Monday, 23^rd July Mr. Wilcox’s team started work on site in earnest. The factual conclusion which I draw from the above evidence is that Norfolk started working on site as the new contractor in substitution for SAR on Saturday, 21^st July 2001. Norfolk continued to work in that capacity until 6^th November 2001.

175 The engagement of a new contractor to carry out works the subject of SAR’s contract is inconsistent with the continued existence of that contract. In my view, therefore, the engagement of Norfolk amounted to an acceptance by conduct of SAR’s repudiation. It was not necessary that the claimant or the engineer should have been aware of the legal character of what they were doing. Whether or not conduct amounts to an acceptance of repudiation has to be determined objectively. The thought processes of the individuals involved and their legal knowledge or lack of it does not affect the legal position.

176 Mr. Davie, on behalf of the defendant, makes a formidable point in opposition to this analysis. He submits that any acceptance by the claimant of SAR’s repudiation was not notified to SAR. Mr. Wilcox, who was acting behalf of Norfolk at this stage, was not SAR’s agent for the purpose of receiving such a notification.

177 In order to deal with Mr. Davie’s argument, it is necessary to consider the position of Mr. Wilcox in greater detail. Mr. Denham said in evidence that he did not think that Mr. Wilcox was a director of SAR. I am satisfied that in this respect Mr. Denham is mistaken in his recollection. In particular, it can be seen that on 18^th June both Mr. Denham and Mr. Wilcox signed an important letter to the claimant with the word “Director” typed under each of their names. I am sure that Mr. Denham would have demurred if that description was not correct. Furthermore, SAR’s printed notepaper showed Mr. Wilcox as one of SAR’s directors.

178 The next point to note is that on and after 18^th July Mr. Wilcox was not acting against the interests of SAR in offering to take over the works and then doing so. As Mr. Denham put it in his evidence, SAR had come to the end of the line. SAR did not have the resources to continue with the Greenore contract. It seems to me that from SAR’s point of view Mr. Wilcox’s actions were either neutral or possibly beneficial. If no one had taken over the renovation works SAR’s liability to the claimant would have been greater. Furthermore, because Norfolk stepped into the breach, the administrator was able to make an early sale to Norfolk of the plant on site for the agreed sum of £35,000 plus VAT. It has to be remembered that that plant had not been without its problems.

179 During the latter part of July 2001 Mr. Wilcox had two roles. He acted as a director of Norfolk and as a director of SAR. Mr. Wilcox represented both companies at the meeting on 18^th July. On 25^th July Mr. Wilcox sent a letter to KMM on behalf of SAR in administration (insofar as he was still able to represent that company). By that letter Mr. Wilcox informed KMM of the date of the administration and the details of the administrator. For the reasons previously mentioned, I do not consider that the interests of SAR and Norfolk were in opposition. Mr. Wilcox may well have been acting against the interests of other SAR directors, who were hoping to form a Phoenix company, but that is a separate matter.

180 During the crucial period 18^th to 23^rd July SAR had no representative on site other than Mr. Wilcox and his deputy, Mr. McLeod. Neither Mr. Patterson nor anyone else from SAR was in communication with the claimant. I therefore conclude that during the period 18^th to 23^rd July communication by the claimant of relevant facts to Mr. Wilcox constituted notification of those facts to SAR. It is immaterial whether or not Mr. Wilcox passed on those facts to his fellow directors of SAR.

Part 7. The Effect of the Claimant’s Rejection of the Defendant’s Offer

dated 9^th August 2001

186 I am bound to say that a letter formulated in such strange terms is hardly likely to inspire confidence in the reader. I accept the evidence of Ms. Price about her feelings and her suspicions when she received that letter. It is clear that Ms. de Pasquale took a similar view.

187 In my judgment Ms. Price and Ms. de Pasquale were entirely reasonable in the view which they took about the proposal contained in the defendant’s letter dated 9^th August 2002. The claimant acted reasonably in rejecting that proposal immediately. It should not be forgotten that the claimant had a business to run and was suffering substantial loss of profits during every week when the main berth at Greenore Harbour was closed to shipping. The claimant was faced with the choice between an unknown company seemingly based in Geneva and a company which was already on site with a team of competent workmen, who were well familiar with the job. It is hardly surprising that the claimant preferred the latter option.

188 Furthermore, in my view, if the claimant had accepted the defendant’s proposal, the outcome would have been far from satisfactory. The directors of BME were former directors of SAR, who had already demonstrated their inability to manage the Greenore renovation works. Moreover, in the light of the correspondence in June and July 2001 and the oral evidence of Mr. Denham, I think it highly unlikely that the defendant would have provided anything like enough funding to enable BME to take over SAR’s contract and to carry out the remaining works at no additional cost to the claimant.

Part 8. The Claim for Additional Completion Costs

201 The experts have agreed that the total sum paid by the claimant to SAR was £2,807,345, and that the total sum paid to Norfolk was £244,651. In relation to the latter figure, however, Mr. Stavrou maintains that the arrangements with Norfolk were unduly generous and the payments made were extravagant. Mr. Stavrou believed that a reasonable sum for payment to Norfolk would have been £46,543.

206 In addition to the above figures, the claimant provided diesel and other services to SAR at a total cost of £66,485. This forms part of the total actual costs. Also, the claimant made payments to others of £486,063. The principal component of this figure is the sum of £231,500 which was paid to IDC. All of these costs form part of the total costs of the renovation works which SAR had contracted to carry out. I am not persuaded by Mr. Stavrou’s evidence or Mr. Davie’s submissions that any deduction should be made from these costs.

210 The first matter in issue relates to prolongation claims. In relation to the four weeks paid extension of time due under clause 12, Mr. O'Loan has allowed £16,954.46 per week in the notional final account. Mr. Taylor regards this allowance as generous. Mr. Stavrou considers that three further items have wrongly been omitted, namely weekly costs associated with the performance bond, insurances and protection of the works. On this issue I prefer the view of Mr. Taylor to that of Mr. Stavrou. The items in dispute were not priced in the BQ with a weekly rate. There is no evidence that additional costs under these heads were actually incurred during the relevant four week period. These costs were never claimed by SAR in interim applications.

215 I bear in mind that most of the anticipated PCBs had been dredged by SAR before they left site. I accept Mr. O'Loan’s evidence that the later stages of PCB dredging are slower. Therefore, substantially less than 300 cubic metres per day was likely to have been pumped out by Norfolk. There is uncertainty about the precise amount of time which Norfolk devoted to PCB dredging and grouting. I accept Mr. Davie’s submission that where the evidence is lacking as a result of failures on the claimant’s side, I must give the benefit of the doubt to the defendant. Taking all those factors in to account, I propose to add £100,000 to the notional final account in respect of additional PCBs. I am satisfied that this allowance is generous to the defendant.

Part 9. Damages for Delay

219 There is an issue between the parties as to whether KMM also gave or ought to have given a further three-week extension of time in respect of VO 7. VO 7 required the construction of a reinforced concrete spreader beam which would support a third crane rail. The location of that beam is shown in the photographs. It can be seen from the correspondence that SAR was pressing for a four-week extension of time in respect of VO 7. Mr. O'Loan took a different view. Mr. O'Loan considered that the events surrounding the third crane rail beam had caused three weeks of concurrent delay; in other words, SAR was entitled to reimbursement of its costs in respect of those three weeks, but not entitled to any deferral of the due completion date. Mr. O'Loan was cross-examined thoroughly on this item but maintained his position.

221 It can be seen from the correspondence that SAR also sought an extension of time in respect of sections A and B of the works up to 1^st July 2001. Mr. McMullan in his closing speech characterised that application as a “try on”. I would not choose that pejorative term. SAR’s team on site was under-resourced, under-funded and struggling in a difficult situation. I am, however, satisfied that SAR did not have any entitlement to extension of time beyond the four weeks which the engineer said he would allow.

223 I am not persuaded by Mr. Davie’s arguments. Clause 44(2) does not require a formal certificate. The relevant phrase in clause 44(2) reads as follows: “The Contractor … shall by notice in writing to the Contractor grant such extension of time for completion…” In my view, the engineer’s draft valuation of 6^th June does amount to a notice in writing for that purpose.

225 In my view, the correct analysis is that on the date of termination SAR was substantially in delay. SAR had an accrued liability to pay liquidated damages for delay at the rate stated in the contract, after credit is given for four weeks’ extension of time. Since there is uncertainty about the precise date when SAR’s repudiation was accepted, I shall treat SAR’s liability for liquidated damages as ending on 18^th July 2001.

226 Counsel are agreed that liquidated damages for delay, calculated on the basis set out above, in respect of section A, section B and dredging works amount to £200,000. I therefore hold that that is the sum to which the claimant is entitled as against SAR pursuant to clause 47 of the contract.

228 It is clear from the evidence of Ms. Price and Mr. Savage that the claimant was suffering substantial loss of profits in every week that the main berth was closed for business. Although it was hoped that the division of the works into sections A and B would enable some shipping to come into the main berth during the renovation works, this did not prove to be practicable.

Part 10. The Claim for Rock Dredging Costs and Loss of Profits

After October 2001

236 For all of the above reasons, I reject the claimant’s claim for the costs of rock dredging and for loss of profits after October 2001.

Part 11. Conclusion

238 SAR committed breaches of the construction contract, as a result of which the claimant sustained substantial loss. For the reasons set out in Parts 8 and 9 above, I hold that the claimant’s loss exceeds the limit of the bond. Accordingly, the defendant is liable to the claimant in the sum of £325,773.50. That sum must be converted from Irish Punts into Euros.

239 If the figures were converted from Irish Punts into sterling, it would be seen that the principal sum at issue in this case is below £300,000. By the standards of TCC litigation, this is a modest value case where costs are liable to become disproportionate to the sum at stake. Nevertheless, the facts and the issues are complex and they have had to be properly investigated. Counsel and solicitors on both sides have made strenuous efforts to compress this trial into six days, inclusive of judgment. I congratulate all counsel and solicitors on achieving this.

(Adjourned for a short time)