Bridge UK.Com Ltd (t/a Bridge Communications) v Abbey Pynford Plc

The Claimant carries out a commercial printing and mailing business and in 2002 decided to move its business in Essex from Romford to a larger site at Heybridge in Maldon and to install a Heidelberg 10 colour 102 Speedmaster printing press (“the Press”) there before taking occupation.

The Press had been purchased by the Claimant from Close Asset Finance Limited (“CAF”) who had previously financed the purchase of the Press by a company which had become insolvent. It was sold to the Claimant from a liquidation sale in Basildon in July 2002. The Claimant agreed to make payments of £8,750 for 3 months followed by 21 monthly payments of £15,700 to CAF under a short term hire agreement dated 7 August 2002.

The Press, when in operation, weighs some 62 tonnes and needs an adequate foundation. The Claimant therefore contacted the Defendant, a specialist ground engineering company which, amongst other things, carries out piling and the construction of plant bases.

After a meeting in early August 2002 between the Claimant and the Defendant, the Defendant arranged for ground investigation work to be carried out by Geodrive Limited on 8 August 2002. They reported to the Defendant on the results of that investigation on 9 August 2002.

The Defendant then engaged Knapp Hicks and Partners Limited (“KHP”), a firm of consulting engineers, to carry out the design of the base for the Press.

On 13 August 2002 the Defendant submitted an offer to the Claimant for the installation of a piled foundation for the Press at the new premises in Maldon

In that Offer they stated:

On 15 August 2002 Mr John Ruck, on behalf of the Claimant, accepted the Defendant’s offer. This therefore formed the agreement between the parties (“the Contract”).

The Defendant started work on site on 19 August 2002 when Kriscut Concrete Drilling and Sawing Co Ltd commenced sawing out the boundaries of the existing floor slab so that the plant base could be constructed. The existing slab was then broken out and cleared away between about 20 and 23 August 2002.

The Defendant’s sub-contractor commenced the piling on about 27 August 2002 and completed the work on about 30 August 2002.

Construction of the slab to the design set out by KHP commenced on about 2 September 2002 and on 4 September 2002 Mr Craig Macklin, a Construction Engineer for the Defendant, wrote to the Claimant to say:

There was then a discussion between Mr John Ruck and the Defendant’s site manager, Mr Chris Roberts, during which the Defendant’s proposal was discussed. Mr Macklin was, it seems, unwilling to visit the site but participated in a discussion over the telephone. It is not clear what was discussed but the upshot was that the Defendant proceeded to cast the slab at some stage between 5 and 7 September 2002.

On Friday 13 September 2002 Mr Neil Lattimore of TriTech Engineering (“TriTech”), a company specialising in Heidelberg Presses, attended site to commence the installation of the Press. He noted two aspects of the slab which he considered unacceptable. First the Defendant had laid a plinth which was raised from the floor at one end and was very much higher that the original surrounding floor and this made the Press unworkable at the feeder end. Secondly level readings confirmed that the tolerances on the slab had not been met.

On 14 September 2002 the Defendant met Mr Lattimore on site to discuss measures to overcome the problem. On Monday 16 September 2002 the Defendant carried out some remedial work. A meeting then took place on 17 September 2002 and the Defendant agreed to return to site on 18 September. As recorded in the fax from Mr David Kellet, the Defendant’s area manager, to Mr John Ruck on the same day, the Defendant was

Mr Peter Ruck of the Claimant responded on 18 September 2002 to say:

Mr Macklin replied on 19 September 2002 to say:

Work started on these remedial works but on 20 and 21 September 2002 Mr Peter Ruck wrote to Mr Kellet to complain about the level of dust circulating in the factory.

On 23 and 24 September 2002 Mr Peter Ruck wrote again to Mr Kellet to say that he was unhappy with the subsequent remedial work because the floor was moving under the weight of the Press. He said that Mr Macklin had agreed with TriTech that the “floor “is moving” and remedial work has been unsuccessful. He informs me that he wants to dig up the floor again”. He referred to Mr Macklin returning to site and making tests and said:

Mr Macklin responded on 24 September 2002 to say:

He added:

On 25 September 2002 a meeting was held attended by Mr Philip Jones, the Commercial Director of the Defendant, who stated that it had been agreed that the performance of the foundation should be tested. He set out the sequence of operations as follows:

He noted that KHP would be supervising this checking process. The test was not successful and on 27 September 2002 a meeting took place to discuss the continued problems with the floor slab.

That meeting was attended by Mr John Ruck and Mr Peter Ruck of the Claimant, Mr Jones of the Defendant, Mr Robert Stevenson of CAF, Mr Nick Sparrowhawk of KHP and Mr Lattimore of TriTech.

The result of that meeting was that the Defendant agreed to carry out further remedial works by cutting out two “tramlines” through the floor where it was hollow and replacing the floor within that area with an epoxy granite material.

Remedial works started on Monday 30 September 2002. Although it had been agreed that KHP would monitor the work, the Defendant did not inform KHP of progress. As a result of this Mr Peter Ruck wrote to Mr Paul Kiss, the Managing Director of the Defendant on 2 October 2002 referring to a loss of trust and confidence in the Defendant.

The remedial work was then completed by the Defendant and inspected by KHP on Friday 4 October 2002.

TriTech subsequently attended site on Saturday 12 October 2002 to confirm that the levels were satisfactory and commenced the installation of the Press on Sunday 13 October 2002.

Although TriTech had apparently hoped to have the Press completed by Saturday 19 October 2002, in the event the Press was only fully commissioned and ready for printing on Monday 28 October 2002. Mr Peter Ruck said that this was because, after installation, great care had to be taken to ensure all the debris and concrete dust had been removed.

On 14 November 2002 Mr Peter Ruck wrote to Mr Kiss to say that the Claimant had incurred costs and losses as a direct result of the Defendant’s inability to complete the work on time and that he would be quantifying its losses.

This quantification was carried out and on 27 January 2003 the Claimant sent the Defendant a statement of losses in the sum of £81,912.32.

In forwarding that letter to its insurers on 4 February 2003 Mr Jones of the Defendant said:

On 18 March 2003 there was a meeting between the Claimant and the loss adjuster for the Defendant’s public liability insurers. The loss adjuster subsequently indicated in April 2003 that the claim had been passed to insurers and the Defendant for settlement.

After further letters from the Claimant to those loss adjusters and to the Defendant, the Claimants approached their current solicitors, Leonard Gray, who wrote to the loss adjusters on 9 May 2003. On 11 June 2003 those loss adjusters confirmed that insurers would not provide an indemnity.

On 8 July 2003 Courtney Smith, loss adjusters for the Defendant’s professional indemnity insurers, wrote to say that following consideration of the claim, they concluded that the Defendant did not have liability for the costs noted in that claim.

Correspondence was then exchanged between the Claimant’s solicitors and Courtney Smith until September 2003. Subsequently, on 31 May 2004, the Claimant’s solicitors sent a letter of claim to Courtney Smith in accordance with the pre-action protocol for construction and engineering disputes

On 22 September 2004 Squire & Co, solicitors instructed on behalf of the Defendant, responded to the letter of claim and on 3 November 2004 the Claimant’s solicitors replied. Squire & Co sent a further response on 3 February 2005.

The Claim form was issued on 12 May 2006. Particulars of Claim were served followed by a Defence and Counterclaim. A Reply and Defence to Counterclaim was then served on 28 July 2006.

At the first Case Management Conference on 30 June 2006 directions were given up to and including a trial for 2½ days commencing on 19 February 2007.

On 19 January 2007 Williams Holden Cooklin Gibbons LLP (“WHCG”), solicitors instructed by the Defendant in these proceedings, wrote to the Claimant’s solicitors raising various questions on the quantum of the Claimant’s claim.

On 24 January 2007 WHCG wrote to the Claimant’s solicitors and stated

At the Pre-Trial Review on 26 January 2007 a direction was given that the Defendant should produce a list of those issues which remained live as between the parties. That list was produced on 1 February 2007 and set out in detail the issues which the Defendant would raise on quantum and causation.

On 8 February 2007 the Claimant’s solicitors responded to WHCG’s letter of 19 January 2007 and enclosed a Notice to Admit Facts. On 12 February 2007 the Defendant responded to that Notice and stated “Not admitted” for all the matters.

Skeleton arguments were exchanged on 16 February 2007 and the hearing took place on 20 and 21 February 2007, with evidence on the first day and closing submissions accompanied by written submissions on the second day.

I heard factual evidence from Mr Peter Ruck the Joint Director of the Claimant. He, together with Mr Glyn Jarvis, now the Finance Director of the Claimant, had drawn up the claim in January 2003. Obviously much has happened since 2002 The Claimant’s business has expanded and the precise detail of the events of 2002 and of the claim formulated in 2003 did, on occasion, cause difficulty to Mr Ruck in cross-examination. His witness statement and its appendices were essentially the evidence relied upon by the Claimant to prove the claim. Mr Jarvis, who worked for a large national firm of accountants before becoming involved with the Claimant in 2003 also produced a witness statement and gave evidence. He was clearly knowledgeable about the financial aspects of the Claimant’s business. I am satisfied that both witnesses did their best to provide me with their honest recollections.

I also heard expert evidence from Mr Jon Chick, a consulting civil and structural engineer, who had produced a report dated 7 February 2007 with a short letter addendum dated 19 February 2007. He was evidently well experienced in his field and his evidence was not the subject of any real challenge.

Witness statements were also submitted by the Claimant from Mr Lattimore, formerly of TriTech and Mr Stevenson, formerly with CAF. Short witness statements were also produced from Mr Broughton and Mr Mayo, two printers with the Claimant and a further witness statement was produced by Mr Jarvis. These further statements from Mr Boughton, Mr Mayo and Mr Jarvis were produced by the Claimant to deal with particular aspects and provided to the Defendant. It was the Defendant who put them to witnesses in cross examination.

In general where witnesses are not called then the weight to be given to their evidence is a matter of submission. Obviously, in a low value case, it is disproportionate for every witness to attend unless absolutely necessary and I bear this in mind in assessing that evidence.

At the hearing, the Claimant was represented by Mr Andrew Spencer and the Defendant by Mr Luke Wygas.

The Defendant did not put forward any evidence or any case based on particular figures. Rather, it sought to challenge the evidence put forward by the Claimant and to raise matters which might have been the subject of further documentary evidence. It is clear that some further documents could have been disclosed or been the subject of a request for disclosure. In comparatively low value cases it is, though, important to bear in mind the need for disclosure to be kept proportionate.

Equally, the nature of the Defendant’s case obviously shifted. Originally in the Defence and Counterclaim many aspects were in issue both as to liability and quantum. In relation to the quantum pleaded at paragraph 30 of the Particulars of Claim, the Defendant alleged that an indemnity had been given by the Claimant for consequential loss, various matters were denied, a failure to mitigate was alleged and otherwise the Claimant was put to proof. Substantially all of the specific allegations were abandoned and, as disclosed in the list of issues, the defence was one of denial or putting the Claimant to proof. The Counterclaim has not been raised in submissions.

In the opening submissions, the Defendant raised two matters which were challenged by the Claimant on the basis that they were new points. They were, first, that a 28 day period of curing was required for the concrete after the Defendant had completed its work and before the Press could be installed so that the Claimant would not, in any event, have been able to install the Press before it did. There was therefore no delay caused by the Defendant. Alternatively, there was one week of delay. The second point raised by the Defendant was an allegation that the tolerance in the Contract was incompatible with the tolerance required by Mr Lattimore of TriTech so that a compatible slab would also have needed the remedial work which was carried out.

Mr Spencer challenged the Defendant’s ability to raise these matters. Mr Wygas accepted that the matters had only arisen when the Defendant had seen the Claimant’s evidence but he contended, relying on the Court of Appeal decision in Lunnan v Singh (unreported, 1 July 1999), that it was open for the Defendant to raise any matter on causation and quantum. I derive little assistance from that decision in the context of this case. I accept that, in principle, the Defendant having admitted liability could still challenge causation and quantum and that is the effect of the decision in Lunnan. The issue in this case, though, is whether, having expressly set out the remaining issues on 1 February 2007 as ordered by the Court, the Defendant should be permitted to raise such matters now.

In claims with comparatively low value, especially claims which, like this one, derive from events some 5 years old, the court will always be reluctant for a party to be able to raise a new case at a late stage. I would therefore have been minded to reject the new contentions on this basis alone.

However, in this case, I accept the Claimant’s submissions that, the matters raised are not just new matters but would require the Defendant to alter its existing case. First, the Defendant in paragraph 4 of the Defence admits that the aim of the Contract was to install a suitable floor, capable of supporting the Press. The Defendant has also admitted that it was negligent in failing to complete the work within 10 days of commencement. On that basis, I do not consider that the Claimant can now assert that installing a suitable floor capable of supporting the Press would take 10 days plus a further 28 days.

In relation to tolerance, the Defendant pleaded at paragraph 2.3 of the Defence that:

Therefore, I consider that the Defendant could not raise the new matters without altering the currently pleaded or accepted position. This again would lead the court to reject those new matters.

When the matter was raised at the beginning of the hearing I indicated that the parties should proceed on the basis that these matters were live issues and that I would decide in this judgment and after I had heard full submissions whether the matters could be raised. The points depended on the evidence and a prolonged initial argument was undesirable in a short trial. Equally, I would then be able to see to what extent the matters could properly be dealt with.

Whilst, as I have said, I would have been minded, in any event, to reject the new matters, having heard the evidence, the new matters are not made out. Mr Chick was able to deal with both aspects at the hearing. First, in relation to the curing period, he indicated that whilst the 28 day curing period was required to ensure that the full concrete strength was attained, if a client wished to load the slab at an earlier date, this was possible as the concrete would attain two-thirds of its strength in 7 days. He said that he would advise the client of the risks but in his experience early loading at an earlier stage would not be likely to cause detriment. In this case, neither the Defendant nor KHP raised any concerns about the date when the slab could be loaded and I accept that the common intention under the Contract, in the absence of anything said to the contrary, was that the Defendant would produce a slab which the Claimant would be able to use after 10 days. I also accept that this was Mr Ruck’s understanding from discussions with the Defendant prior to the Contract.

In relation to the slab surface tolerance, I consider that Mr Lattimore at paragraph 7 of his statement is referring to machine tolerances not to concrete surface tolerances. As Mr Chick explained, from his experience with similar plant bases, the plant itself would have adjustable feet or shims could be used to make any necessary adjustments to the machine installation. He said that the tolerance to be achieved of “+/- 5mm under a 3m straight edge” was a sufficient tolerance for this plant base, if achieved.

On that basis, I do not consider that either the curing period or the tolerance issue could or do have any effect on the issues which I have to determine. I therefore consider, first, the period of delay.

As originally pleaded, the Claimant relied on the date of 8 September 2002 as being the date on which the slab should have been completed. This was calculated as 10 days after 29 August 2002 which was 14 days after the initial payment. However, it is apparent that in fact the Defendant commenced work on 19 August 2002 and, allowing 10 days, even excluding weekends and bank holidays, the Claimant contends that the Defendant should have completed the work by 2 September 2002, at the latest.

In fact, I find that the Defendant completed the work on 7 September 2002. Mr Ruck said at paragraph 10 of his witness statement that he had worked on the basis of 10 days being 7 or 8 September 2002 and that, on this basis, he made arrangements for TriTech to attend on 11 September 2002.

If the slab had been properly completed on 7 September 2002 so that TriTech had been able to commence the installation on 11 September 2002, then I do not consider that the Claimant would have had any substantial grounds for complaint. However, the slab was not complete on 7 September because the further attempts at remedial work meant that it was only complete on 4 October 2002. As a result, instead of the Press being installed and in operation well before the Claimant’s moving date of 23 September 2002, the Press was only ready and commissioned on 28 October 2002 because of delay caused by matters for which the Defendant was responsible.

If the slab had been completed correctly on 7 September 2002 then, in my judgment, it is likely that the Press could have been commissioned and in operation by 18 September 2002. There was, I conclude, a delay to the commencement of the operation of the Press from 18 September 2002 to 28 October 2002 caused by the Defendant. It is that period which is the relevant delay in this case.

On that basis, I now consider the heads of claim.

The Claimant claims £26,243.95 on the basis that it had to send printing work to other companies in the period between 31 August 2002 and 16 October 2002 because of delay by the Defendant in completing the work and then the remedial work, with the consequent dust and disruption.

Mr Peter Ruck dealt with this claim at paragraph 64 of his statement and in his evidence before me. He also exhibited all the invoices, except invoice 11903 for £2720.00. That invoice however does appear on other accounting documents (page 485) and I am satisfied that this also represented work outsourced because the Defendant delayed the commencement of operation of the Press.

These invoices show that, generally, the Claimant provided plates and paper to the other printing companies who returned the flat sheets to the Claimant after carrying out a printing operation equivalent to the one which would have been performed by the Claimant using the Press.

This applied to the two items sent to M and M Print Limited which Mr Ruck explained was a printing company not normally used by the Claimant. It also applied to 11 of the 12 items outsourced to Collier Litho Plates Ltd (“Collier”) and 11 of the 15 outsourced to The Press. For a number of items, the work carried out for the Claimant also included making plates from a film or disk supplied by the Claimant. This applied to one item for Collier (invoice 55922) and 3 items for The Press (invoice 11996, 11997 and 11998). Mr Ruck explained that the making of the plates was outsourced because for a period of time the Claimant could not make the plates because of the dust caused by the remedial works.

Mr Wygas on behalf of the Defendant accepts that the cost of outsourced work caused by the delay in the operation of the Press would be a relevant element in a calculation of loss of profit during that delay period. He questions the two invoices for M and M Print Limited which are dated 31 August 2002 and submits that these cannot relate to the relevant period of delay commencing, as I have now found, on 18 September 2002. I accept that submission. I do not consider that this outsourced work was caused by the Defendant’s delay and I therefore disallow these two invoices. However, by 7 September 2002 Mr Ruck had visited the site, seen the unsatisfactory slab and been involved in preventing further concreting work because he considered that proper remedial work was needed. I am satisfied from a consideration of the available purchase orders and invoices that invoices from about 9 September 2002 are likely to relate to work which was outsourced because of the delay in commissioning the Press.

I therefore conclude that because of that delay, the Claimant expended £24,293.95 on outsourced work. This is the sum claimed of £26,243.95 less £1,950 in respect of the two M and M Print Invoices.

The Claimant claims £1,599.50 in respect of KHP’s fees. This sum is itemised in an invoice from KHP to CAF dated 12 November 2002. On 28 December 2002 CAF forwarded this invoice to Mr Peter Ruck and sought reimbursement from the Claimant in full.

As Mr Peter Ruck explains in paragraph 65 of his witness statement the work was carried out by KHP in the period 24 September 2002 to 14 October 2002. That was the period when the Claimant involved KHP to ensure that the Defendant’s remedial work was properly carried out.

I consider that the need for KHP to carry out work in that period was caused by the admitted negligent performance of the foundation and the subsequent necessary remedial work. Mr Ruck could not give direct evidence on payment but, as he pointed out CAF have not pursued him for the money. Also Mr Jarvis gave evidence that showed that this sum had been paid in the context of the overdraft facility taken out. On that basis, I am satisfied that the Claimant has paid the sum on the invoice. Accordingly, I find that the Claimant is entitled to recover £1,599.50 from the Defendant

The Claimant claims £7,532.50 in respect of work carried out by TriTech. This sum is evidenced by an invoice dated 24 October 2002 which like the KHP invoice was submitted by CAF to the Claimant for reimbursement.

Mr Peter Ruck states in paragraph 66 of his witness statement that TriTech had expected to be able to install the Press commencing on 11 September 2002. The invoice states that it covers work carried out from 13 to 25 September 2002. From the evidence, TriTech attended site on 13 September 2002 to commence installation and took level readings and thereafter were heavily involved in discussing the necessary remedial works with the Claimant, the Defendant and KHP. They were unable to carry out the work which they had programmed to do.

The costs which TriTech incurred in the period after 13 September 2002 were all non-productive as it was only in October 2002 that TriTech was able, finally, to commence installation of the Press. I am satisfied that the claimed costs resulted from the failures of the Defendant.

Although Mr Ruck could not give direct evidence of payment, I am satisfied on the same basis as for the KHP invoice, that the Claimant has paid CAF for the sum in the invoice. I therefore consider that the Claimant is entitled to recover £7,532.50 from the Defendant.

The Claimant claims £1,215.00 in respect of the costs of hiring suitable lifting equipment from Flegg Transport. The Claimant contends that originally when the Press was delivered they had the use of suitable equipment from TriTech but that because the Defendant delayed in completion of the work, they had to hire suitable equipment at a later date.

In addition Peter Ruck states in paragraph 67 of his witness statement and explained in his evidence in Court that Mr Macklin of the Defendant had agreed to pay the Claimant for the costs.

The invoices relied on by the Claimants are:

In his evidence Mr Ruck said that invoice 10674 related to the work carried out by Flegg Transport in relation to bringing the Press to Maldon. I note that the TriTech Invoice already includes a Hyster Hire during the period from 13 to 25 September 2002. I am not satisfied that the Claimant can recover the costs of Flegg Transport in relation to the Press in September 2002. Rather I consider that the period during which the additional hire of forklifts would be recoverable would be in October 2002.

On that basis the sum which the Claimant can recover from the Defendant is, I find, £420, representing the second and third invoices but that the first invoice cannot be claimed.

The Claimant claims £6,600 as being transport costs actually incurred in relation to work which was outsourced.

Although the overall claim relates to 29 outsourced items, the claim for transport relates to:

Mr Peter Ruck could not explain the discrepancy in his evidence. As I have said, there are 28 invoices for the 29 jobs, the missing invoice being for the job with reference number 11903 outsourced to The Press. For the other 28 invoices, plates and paper were sent for all jobs, except 4 where film or disk was supplied and the printing was collected for 28 jobs. I therefore consider that for all jobs either plates, film or disks were delivered.

I accept that the Claimant needed transport to deliver paper and plates to the outsourced printers and to collect the printed material. I consider that the number of journeys claimed is, if anything, an underestimate based on the 29 outsourced contracts claimed. There were 15 jobs outsourced to The Press and 12 jobs outsourced to Collier as well as the 2 jobs to M and M Print which I have disallowed.

I am satisfied that for the 27 outsourced jobs for which the Claimant can make a claim, the Claimant made at least the journeys which it has claimed and I allow the claim on the basis that:

In his evidence Mr Ruck accepted that the relevant distances involved journeys from Maldon to London E16 for M and M Print, to Romford for Collier and to London N17 for The Press. The claim for all journeys is based on a round trip of 84 miles, which Mr Ruck stated was calculated based on an average.

In relation to distances, I consider that the claim for delivery to Romford is excessive. I consider that for the 12 jobs outsourced to Collier a figure of 20 miles is more likely to be correct. For the journey to The Press I consider a figure of 60 miles is more appropriate. I have held that there is no claim for M and M Print.

The transport charge has been made at £1.79 for delivering paper or collecting printing in a lorry and at 60p for delivering plates in a van.

Mr Ruck’s recollection of the rate at the hearing was initially that it was derived from courier charges. In his witness statement he stated that courier services would have been more expensive and the costs have been calculated at the Claimant’s own commercial charge out rate which covers fixed costs, wear and tear, parking and such matters. In my judgement, his considered and less confused evidence in his witness statement is likely to be correct on this aspect.

The figure of 60p per mile for a light van and £1.79 per mile are not supported by any calculation. However, I am satisfied that the claimant did suffer loss in terms of the journeys and this is a case where the Defendant has not suggested that the figures are unreasonable or put forward alternative figures. I consider therefore that the relevant figures are those claimed, 60p and £1.79.

On that basis I calculate that the Claimant is entitled to recover:

Accordingly, I conclude that the Claimant has spent £3,153.60 for the costs of transport of outsourced printing caused by delay for which the Defendant was responsible.

The Claimant claims £8,600.00 in respect of periods of time when it was necessary to stop the manufacturing process for the folding and mailing machines, so that the equipment could be cleaned.

The claim is based on 40 hours for the folding machine and 60 hours for the mailing machine. There is no evidence in the form of records in respect of these losses. Similarly, there is no such evidence in respect of the additional cleaning carried out by the Claimant’s staff for which 80 hours is claimed under another head of claim. That cleaning was carried out over two weekends and 2 week days (15 and 16 October 2002) as set out in the witness statements of Peter Ruck at paragraph 78.

The claim for manufacturing disruption is for the period 25 September 2002 to 14 October 2002 (as set out in Mr Ruck’s witness statement at para 73).

I am satisfied that the machines were taken out of service for cleaning and I am satisfied that the periods of 40 hours and 60 hours are likely to be an accurate assessment of the relevant time. It is clear from the evidence that the remedial work carried out by the Defendant did cause excessive dust and that the specialist machines would need careful cleaning over a lengthy period.

In these circumstances I consider that the Claimant is entitled to recover the cost for 40 hours of cleaning for the folding machine and 60 hours of cleaning for the mailing machine, which was caused by the dust arising from the remedial work for which the Defendant was responsible. Such was the foreseeable consequence of carrying out remedial work without taking steps to eliminate dust at a time when the Claimant was moving into and had moved into the new premises at Maldon.

Mr Ruck explained that the figures of £50/hr for the folding machine and £110/hr for the mailing machine were the appropriate rates in 2002 and that his exhibit at PR 34 showed current rates. He explained that the current rates of £45/hr and £100/hr were lower because of efficiencies in the business. I accept that evidence.

I am therefore satisfied that the Claimant had to take the relevant machines out of service for cleaning and that for the folding machine the period was 40 hours at £50/hr and for the mailing machine the period was 60 hours at £110/hr giving a total of £8600.00, as claimed.

The Claimant claims £6,012.47 as the wages which it paid Mr Broughton and Mr Mayo who were engaged for the purpose of operating the Press.

The employment of Mr Broughton and Mr Mayo is dealt with in a “Statement of Main Terms and Conditions of Employment” and in the short witness statements which were prepared by the Claimant and put in evidence during the cross examination of Mr Peter Ruck on behalf of the Defendant.

On the basis of that evidence and despite the “Statements” being later documents, I am satisfied that Mr Broughton was engaged from 16 September 2002 and Mr Mayo was engaged from 8 October 2002.

On the facts as I have found, the Press was not commissioned until 28 October 2002. However, I consider that Mr Broughton and Mr Mayo would have been able to work on the Press during the commissioning period, say from 22 October 2002. This delay to the commencement of their work was caused by the matters for which the Defendant was responsible.

As a result, I am satisfied that the Claimant incurred wasted expenditure from 16 September to 22 October 2002 in respect of Mr Broughton and 8 to 22 October 2002 in respect of Mr Mayo. This is the equivalent to 5 weeks for Mr Broughton and 2 weeks for Mr Mayo.

The quantum of the claim is based on £750 per week for Mr Broughton and £500 per week for Mr Mayo. This represents the annual salary of each of them and divided by 52 weeks. Mr Broughton’s pay was, I accept, £39,000 and Mr Mayo’s £26,000.

In the case of Mr Broughton his claim is based on 6 weeks giving £4,500 plus £440.02 Employer’s National Insurance and for Mr Mayo it is based on 2 weeks giving £1,000.00 plus £72.45 Employers National Insurance.

As the appropriate claim should be 5 weeks in the case of Mr Broughton, the relevant sums are therefore:

The total sum due is therefore £5,182.45 (£4,110.00 plus £1,072.45)

The Claimant claims £4,000 as the cost of its employees carrying out cleaning due to the excessive dust and debris caused by the remedial works carried out by the Defendant.

Mr Ruck deals with this event in paragraphs 77 to 78 of his witness statement. The cleaning up as explained in his evidence was performed by five people employed by him who worked over two weekends in October 2002 and on 15 and 16 October 2002. The overall period claimed is 80hours and the claim is based on the five people at £10/hr.

As I have said, Mr Ruck’s statement that 80 hours were spent is not supported by any documentation. However, I consider that period to be a reasonable assessment based on the evidence of the necessary operation and I accept that the work was carried out over two weekends and two week days. This cleaning was necessary because of the remedial work carried out by the Defendant and the Defendant is therefore responsible for it.

I am satisfied that five people carried out the work and that £10/hr is a reasonable rate. On that basis I allow 80 hours at £50/hr which amounts to £4,000, as claimed.

The Claimant claims £16,579.49 as the wasted costs of the hire purchase of the Press during the period when it could not be used. The Claim is made for the period from 8 September to 12 October 2002, a period of 34 days. The daily rate applied is £487.60 per day which gives the total claimed.

For the reasons set out above, I consider that the relevant period of delay for this claim is from 18 September to 28 October 2002 which covers a period greater than the 34 day period claimed.

So far as the daily rate is concerned, the documents which have been produced consist of a short term hire agreement and it is not clear whether at the end of the 24 month hire period the machine belonged to the Claimant. Mr Ruck in his evidence said that the Press had proved to be unsatisfactory and the hire agreement had been terminated at an early stage.

In all the circumstances, it seems to me that the appropriate way of valuing a loss arising from the inability to use the Heidelberg Press in this case is to derive a daily rate from the overall payments under the short term hire agreement of £355,950.00. This gives the daily figure of £487.60.

On that basis, I am satisfied that the Claimant has suffered the loss claimed of £16,579.49 because it was unable to use the Press from 18 September 2002 to 28 October 2002.

The Claimant claims £7,680.00 as management time incurred by Mr Peter Ruck in dealing with the problems caused by the Defendant.

At exhibit PR 33 to his witness statement Mr Peter Ruck has set out a schedule of the time spent from 31 August 2002 to 30 April 2003. In the main part of his witness statement he deals with the claim at paragraphs 79 and 80. He says that he calculated that he was engaged for 128 hours in dealing with the problems caused by the Defendant. As he explained in evidence the hours were based on his assessment of the time he spent on various matters. That assessment was made retrospectively. He prepared it by looking through the various documents which record what happened.

Such a method of retrospective assessment is, I consider, a valid method of calculation. I have been referred to the judgment of His Honour Judge Peter Bowsher QC in Holman Group v. Sherwood (Unreported, 7 November 2001) where he indicated that in the absence of records, evidence in the form of a reconstruction from memory was acceptable. I respectfully agree. However, it must be borne in mind that such an assessment is an approximation of the hours spent and may over-estimate or under-estimate the actual time which would have been recorded at the time.

Some hours have been included for organising the outsourced work at M and M Printing. In addition, I consider that a discount should be applied to allow for the inherent uncertainty in this retrospective method. Overall, I consider that a discount of about 20% would be appropriate to allow both for the hours wrongly included for outsourcing to M and M Printing in August 2002 which I have disallowed and for the uncertainty arising from the method. The relevant hours spent by Mr Ruck were, therefore, I find 100 hours.

I accept that the appropriate approach to the question of recovery of such management time is that set out by Gloster J. in R+ V Verischerung AG v Risk Insurance and Reinsurance Solutions SA [2006] EWHC 42 (Comm) and I respectfully adopt the approach. At para 77 Gloster J said that:

“as a matter of principle, such head of loss (i.e. the costs of wasted staff time spent on the investigation and/or mitigation of the tort) is recoverable, notwithstanding that no additional expenditure “loss”, or loss of revenue or profit can be shown. However, this is subject to the proviso that it has to be demonstrated with sufficient certainty that the wasted time was indeed spent on investigating and/or mitigating the relevant tort; i.e. that the expenditure was directly attributable to the tort - see per Roxburgh LJ in British Motor Trades Association at 569. This is perhaps simply another way of putting what Potter LJ said in Standard Chartered namely that to be able to recover one has to show some significant disruption to the business; in other words that staff have been significantly diverted form their usual activities. Otherwise the alleged wasted expenditure on wages cannot be said to be “directly attributable” to the tort.”

In this case Mr Ruck states at paragraph 79 of his witness statement and I accept that the Claimant “suffered losses due to lost opportunities since I was the New Business Development Director at the time, and I was unable to leave the premises in order to attend to other responsibilities such as selling and marketing the Claimant’s business.”

In his evidence Mr Jarvis explained that the Claimant’s turnover has increased from about £2 million in 2002 to an estimated £10 million this year. It is therefore clear, in my judgment that Mr Ruck’s time would have been spent in selling and marketing the Claimant’s business than being occupied in dealing with the problems for which the Defendant has accepted liability.

As a result, I am therefore satisfied from Mr Ruck’s evidence that he spent time dealing with, investigating and mitigating the effect of the problems caused by the Defendant. That time amounted to 100 hours. Mr Ruck would otherwise have been selling and marketing the Claimant’s business during that time. On that basis the Claimant is entitled to recover for 100 hours of Mr Ruck’s time.

In this case Mr Jarvis has produced a short statement in which he as stated that from the audited accounts of the Claimant he has calculated the annual income of Mr Ruck in the relevant period to be £100,074.84. When this is divided by 2080 hours (equivalent to 52 weeks at 40 hours a week), it gives a figure of £48.11 per hour. Mr Jarvis is a qualified Accountant and I accept his evidence as to the accuracy of the calculation of Mr Ruck’s income. On this basis I am satisfied that the sum of £48/hr claimed by the Claimant is appropriate.

The Claimant has also sought to recover a 25% uplift, described as an “opportunity cost”. I am not satisfied that this is recoverable. I therefore allow 100 hours at £48 per hour, making £4,800.00 .

During the hearing I raised the question of whether, for certain heads of claim, the Claimant was claiming loss of profits or wasted expenditure. In particular, this related to the cost of outsourced work (including transport costs), the rental value of the Press and the salaries of the printers who were to operate the Press.

The general position is summarised at Chitty on Contract (29th edition) at para 26-068 where the authors refer to Cullinane v. British Rema Manufacturing Co Ltd [1954] 1 QB 292 at 308 and state that:

“the Court of Appeal has ruled that the claimant must choose between claiming for his wasted reliance expenditure and claiming for his loss of expected profits, holding that he is not entitled to recover both. This position is correct if it is interpreted to mean that the claimant should not recover his gross return or profits expected under the contract (or from the activity in question) and also the (now wasted) expenditure incurred in reliance of the contract which he had intended to meet from that gross return. But it is submitted that the ruling against a “split” claim cannot be justified if the claimant can show that there is no overlapping between the two claims.”

In this case, the Claimant had to outsource printing which would have been carried out by the Press. Whilst they generally provided the plates and paper to the outsourced printers, the outsourced printers charged for the use of their printing presses and operating personnel, together with a certain amount for consumables such as ink, power and similar items.

The loss of profit on the outsourced work is, in my judgment, to be based on the additional expenditure incurred by the Claimant in relation to outsourced work. It must therefore make an allowance for the expenditure which the Claimant would have incurred in carrying out that work.

The Claimant’s position is that they incurred the cost of the Press and the salaries of the printers and therefore the equivalent costs of the outsourced printers were additional costs. In addition, the Claimant also claims the cost of the Press and the salaries of the printers on the basis that this reflects a loss of profit. They say that if the Press had been operational then the Claimant would have been able to perform not only the work which was outsourced but also other substantial work which they were unable to accept. In his witness statement Mr Ruck states at para 64 that the Claimant

The Claimant refers to the well-known decision in The Liesbosch [1933] AC 449 at 468 where Lord Wright said:

In relation to this, I was referred to a passage in the judgment of Forbes J in Tate & Lyle Distribution v. GLC [1982] 1 WLR 149 at 151 to 152 where he said:

“I think Lord Wright in the passage quoted was dealing with the expenses of retaining staff and hired equipment for the period for which they could not usefully be employed because there was no dredger available to carry on with the dredging contract…”

I was also referred to the judgment of Nigel Teare QC (as he then was) in Carisbrooke Shipping CVS v. Bird Part Ltd [2005] 2 Ll R 626 where he said at para 160:

I accept that the Claimant can recover loss of profits essentially under the two heads that it seeks: loss of profit on the outsourced work and loss of profit on the work which it was unable to carry out which may be calculated as expenses thrown away or lost revenue. The Claimant submits that I can make an assessment to arrive at the appropriate loss of profits. I accept that approach.

In respect of the first head, the Claimant’s profit would have been the price to the client for the work, less the costs which would have been expended on the Press, operators, consumables and such overheads as might be referable to that work. The Claimant has continued to incur those costs, except for consumables and has also incurred the costs of using the presses, operators and consumables of those outsourced printers, including the overheads of those printers. All of that cost has eroded the profit and apart from the cost of consumables duplicates sums costs already expended by the Claimant. In respect of the first head, I accept that the Claimant can recover as loss of profit the sums paid for outsourced work (including transport) but must make an allowance for consumables. I assess such consumables at 15% of the cost of the outsourced work. I therefore allow £20,649.85 (85% of £24,293.95) plus £3,153.60 for transport, giving a total for this head of £23,803.45.

For the second head of claim, I accept that the rental value of the Press and the printers’ salaries can be recovered as loss of profit, provided that the cost of an element of the rental value and salaries is deducted to reflect those costs which would have been expended to earn the profit in the first head of claim. The Claimant has lost profit because it has incurred the rental value of the Press and the printers’ salaries without any return being received for the work which would have been carried out had the Press been operational. This wasted expenditure or lost revenue has therefore depressed the profits of the Claimant.

Whilst I have no information on the resources which the outsourced work would have taken the Claimant in terms of the cost of the Press or the printers’ salaries, I am satisfied that it is likely that more work was turned away in the relevant period than was taken on and outsourced. I consider that a proper basis for the assessment of the loss of profits under this head is to allow 50% of the rental value of the Press and 50% of the printers’ salaries. I therefore assess the loss of profits at 50% of £16,579.49 plus 50% of £5,182.45 giving a total of £10,880.97.

Accordingly, I find that the Claimant can recover loss of profit of £23,803.45 for the outsourced work and £10,880.97 for the work not taken on, giving a total of £34,684.42.

Accordingly I find that the Claimant can recover from the Defendant the sum of £61,636.42:

In terms of Interest, I consider that the Claimant is entitled to simple interest under section 35A of the Supreme Court Act 1981 and that such interest should reflect the cost of borrowing for a business such as the Claimant. This is the basis which was applied by Forbes J in Tate & Lyle Distribution v. GLC [1982] 1 WLR 149 at 154 where he said:

I respectfully adopt that approach. I am satisfied that the Claimant is a company which comes within the category of smaller businesses. It and similar companies have to borrow money at higher rates. As the evidence of Mr Jarvis shows and I accept, the Claimant had an overdraft facility with an interest currently payable of 8.25% which is 3% above base. In my judgment the appropriate rate of interest for a company such as the Claimant is 3% above base.

As a result, the Claimant is entitled to recover £61,636.42 and I invite submissions on the calculation of interest (in particular the appropriate periods and the actual rates) and in respect of costs.