According to a judgment published by the Royal Court, Ductclean (UK) Limited [DCUK] had been commissioned by the church to carry out work on its headquarters at the former Odeon cinema on Bath Street at an agreed a price.
It adds though that on 31 July 2019, the defendant – the Freedom Church – received a claim for payment of £1,519,620.58 – when £1,009,090.71 had already been paid.
On 14 August 2019, Richard Gilpin, one of the architects and contractor administrators, sent an email in response to the claim in which he said: ‘This document is the first time DCUK has made reference to any kind of cost variation from the agreed contractual terms to which we have been working for the 14 months.’
In October, an adjudicator was appointed to assess the validity of DCUK’s claim. Around three weeks later, he ruled that DCUK’s claim for payment, above that of the previously agreed price, complied with the requirements of the contract.
But the dispute was then taken to the Royal Court, where Master of the Royal Court Advocate Matthew Thompson deemed that the adjudicator had ‘fallen into error’ and said ‘no money was due in excess of the agreed contract price’.
‘The flaw in the plaintiff’s argument is that it is entitled to be paid for carrying out work even where the price claimed for such work goes beyond the terms of the contract agreed between the parties, namely a fixed price,’ he said.
‘When the plaintiff entered into the contract with the defendant, it knew it had agreed a fixed-price contract. It had therefore decided to accept a commercial risk that in performing the contract the plaintiff might suffer a loss.’
He added: ‘I therefore consider that the plaintiff should not be entitled to enforce the award to the extent that it exceeds the fixed price agreed between the parties.’
