Following an adjudicator’s decision in favour of Sarens (UK) Ltd (“Sarens”), the Claimant - Cleveland Bridge (“Cleveland”) - sought final determination over the terms and interpretation of a subcontract to provide cranes and ancillary equipment required for installation of six bridges along the Heysham M6 link road. Cleveland had been engaged as a subcontractor to Costain Limited under a modified NEC3 Contract (“the Costain Contract”).

The Parties had always agreed that there was a contract but had never agreed on how it was formed or its exact terms. Cleveland’s case, both in the adjudication and before the Court was that, the subcontract had been formed on or around 11-17 November 2014 and in the first instance there was no agreement between the Parties in relation to Liquidated Damages. However, in the event that this was not accepted, Cleveland also argued that it had been agreed that the 10% cap on liability would only apply in certain circumstances, which did not apply in this instance. 

Sarens, who amended their Defence and Counterclaim shortly before trial, argued that the Subcontract had been formed at a meeting dated 30 September 2014. This was a new case which was backed up by documents that had not previously been relied upon and was inconsistent with the case that it had run during the adjudication. O’Farrell J refused the application on the basis that it was “a material change in case” and that to permit the evidence would require not only a new approach by Cleveland but would prejudice Cleveland as they would have to adduce witness evidence two and a half weeks before trial.  Despite this ruling, Sarens provided Further Information on 2 March 2018 (a week after O’Farrell J’s ruling) effectively trying to produce this information again. The deputy Judge “with some reluctance” refused to permit the new information on the basis that it brought “an element of artificiality” to the case. 

This refusal left Sarens with their original estoppel argument which was that the subcontract was formed on or before 10 November and that liability would be capped at 10%. In the alternative, they had argued that the Subcontract was formed on 18 November 2014 and the parties had agreed that loss and damage for delay would be limited to 10% of the Subcontract value and that express terms were agreed as to liquidated damages.

The deputy Judge considered at the outset of her judgment the principles which should be applied when identifying whether a term had been agreed and the proper interpretation of that term. After summarising the “well-established and uncontroversial principles” at paragraph 22, the Judge turned to the negotiations between the Parties and the various correspondence. 

Ultimately, the deputy Judge held in favour of Cleveland and the date of 17 November 2014, overturning the adjudicator’s decision. She noted that it was “not easy” to identify clear acceptance but concluded that there was not a liquidated damages agreement, nor was there a liquidated damages cap. The parties had ultimately reached an agreement on all elements of the Subcontract with the exception of the one about delay damages.

This case demonstrates the importance of not changing a case shortly before trial. The Court had no choice but to reject factual evidence that it acknowledged showed that discussions did take place at the earlier meeting.