According to a recent judgment, Sir Bob Murray CBE, who made his fortune in the kitchen-manufacturing industry, engaged Camerons in March 2014 to build a house, ‘L’Orangerie’, on Route Orange.
Camerons then enlisted RNJ quantity surveyors to value the works, which they estimated would cost £5,548,172 – excluding GST. Sir Bob, the plaintiff, alleges that both parties then entered into an agreement via a ‘letter of intent’ which he signed with the intention of entering into a formal construction contract later.
Work began in November 2014. However, a construction contract was never produced.
The judgment says that in August 2015, Sir Bob became alarmed over the escalation of costs and, through a representative, warned Marc Burton, managing director of Camerons, that if he was not able to provide a better price, he would terminate the contract.
According to the judgment, over the following months Mr Burton provided a number of quotes ranging from £7.99 million to £8.27 million. However, these were not acceptable to Sir Bob, who terminated the project with Camerons in February 2016 and launched a lawsuit against the company for losses, defective works and other costs, including the repayment of £210,143 paid under architects certificates – which he alleges he was overcharged for.
However, according to the judgment, Camerons, the defendant, say the letter of intent referred to their entitlement to receive ‘all direct and actual costs properly incurred’ and not those cited within agreed valuations. The defendant also lodged a counter-claim against Sir Bob seeking the sum of £623,752.79.
The Bailiff, Tim Le Cocq, delivering the court’s judgment, said Camerons had made it clear that it would not agree to a fixed-price contract and that the plaintiff knew this. He added that the court did not have sufficient information to carry out a quantification exercise and that it would therefore be up to both parties to agree a fair price.
‘We observe, however, that if agreement cannot be reached between the parties in the light of contents of this judgment as to the appropriate quantum [figure] then it may well be more cost effective for the parties to agree a reconciliation of the financial aspects outside the court process by some form of alternate dispute resolution such as arbitration or mediation...’ Mr Le Cocq said in the judgment.
He added: ‘However, if the parties cannot agree that method, then we will sit to give directions for the further quantification of the financial aspects of this case.’
Jurats Charles Blampied and Rozanne Thomas were also sitting.