Some people chomp at the bit to get their case to court. Here’s the case of a construction company that went three times and won them all – but at what cost
‘This is an extremely unusual dispute. I remain in some doubt as to how and why such a dispute has been allowed to get this far and I question the underlying tactical considerations, which I cannot begin to fathom, that could be said to justify the extensive costs that these applications have engendered.” And there isn’t much that Mr Justice Coulson cannot begin to fathom.
I told you about the case of Martin Dawes, the owner of Dinmore Manor, and construction company Treasure & Son at the end of last year (30 November, page 60).
Mr Dawes wanted to produce a world class stud facility for showjumping horses. Treasure’s final account was in the order of £15m. It was, and still is, the final million that is in dispute. The first round was won by the contractor because the adjudicator awarded it the £1m. That million pound payment stalled, so the court last year ordered payment.
Mr Dawes stumped up. Well, er, that’s not quite true. On checking, Treasure discovered that the sum had come from the account of Hayley Dawes, Mr Dawes’ daughter. Treasure, despite having the £1m cheque in its hands, began to fret. It wanted an explanation. It didn’t get one.
It’s easy to fathom why Daws wouldn’t give the time of day to Treasure, never mind explain why his beloved daughter paid his bills. I bet he was shouting, 'None of your damned business'
So, these two parties are in dispute. It’s ever so easy to fathom why Martin Dawes wouldn’t give the time of day to Treasure, never mind explain to it why his daughter paid his bill. I bet he was shouting, “none of your damned business”. In a cooler moment it would only have taken a couple of letters to explain that Hayley Daws was acting as agent for her dad. But Treasure wanted certainty. Yes, it began another court action. This time Treasure sought a judge’s declaration confirming that this cheque satisfied the adjudicator’s order and the High Court enforcement.
Now then. There are at least two great big snags about engaging with the English legal system. First, I have never heard of a knockdown absolutely certain winner of a case. Second, lose in the court and you are in for a great big smacking – not only all your legal costs but the winner’s legal costs, too. And lo, on this excursion about whether Mr Dawes had actually paid or not, both sides engaged not only first-rate solicitors but two barristers as well. And in all this time, the learned judge couldn’t fathom why these parties were so hellbent on risking all the costs on one short point – is the £1m cheque a payment of the sum due to Martin Daws?
Why did Treasure & Sons fret? Well, it didn’t know where Hayley Dawes fitted into the dispute between them and Martin Dawes. Does a payment from a third party discharge a debt for another? If Hayley Dawes became bankrupt, could her trustee in bankruptcy claim the money back from Treasure? Since the final account for the building work has now gone up the line from adjudicator to arbitrator, there may be some confusion about the money paid. In other words, Treasure had the colleywobbles about the money it received. Meanwhile, mind you, it did not repay the money to Hayley Dawes.
The learned judge could not fathom why these parties were so hellbent on risking all the legal costs on one short point
By the way, the law on all this is that a payment made by a person without compulsion, intending to discharge another’s debt, will not discharge that debt unless they acted with the debtor’s authority and the debtor subsequently ratified payment. Also, a voluntary payment by stranger A, which purports to pay the debts of B to B’s creditor C will only do that if the payment is made as B’s agent, for and on account of B and with B’s authority or ratification. It would have been easy for Dawes and his daughter to give Treasure this information. And on the facts, the judge was satisfied that the money paid to Treasure by Hayley Dawes was as agent for Martin Daws. The family ties were an important clue.
As for who bears the legal costs of this latest round, the judge will hear the parties in due course. As an aside, he did hint that if Mr Dawes had made an earlier and clearer statement to Treasure of his position, all these proceedings about who paid may have been unnecessary. Yes, of course, but all this fence building is what happens in litigation. No showjumping horse gets a clear round here.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple
For Tony Bingham’s previous articles, go to www.building.co.uk/legal