Merit Holdings Ltd v Michael J Lonsdale Ltd [2017] EWHC 2450 (TCC) (11 October 2017)

Merit Holdings Ltd v Michael J Lonsdale Ltd [2017] EWHC 2450 (TCC) (11 October 2017)

The parties' conduct after expiry of the last letter of intent evidenced an agreement that Merit would be paid by reference to the contract sum and valuation of works, not on a costs-incurred basis. There was no evidence to support an agreement to remove the payment cap and pay costs wholly and necessarily incurred. The declaration sought by Merit was refused.

Citation
[2017] EWHC 2450 (TCC)
Parties
Claimant: Merit Holdings Limited; Defendant: Michael J Lonsdale Limited
Jurisdiction
England and Wales
Judgment Date
11 October 2017
Procedural Posture
Part 8 Claim (declaratory Relief) / Judgment After Hearing on 22 June 2017
Outcome
Declaration sought by Merit refused. No other declarations made.
Legal Topics
Letters of Intent, Contract Formation, Basis of Payment, Declaratory Relief, Adjudication Procedure
Construction Law Contract Law Letters of Intent Contract Formation Basis of Payment Declaratory Relief Adjudication Procedure

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Parties

Merit Holdings Limited

Claimant

Michael J Lonsdale Limited

Defendant

Procedural Posture

Part 8 Claim (declaratory Relief) / Judgment After Hearing on 22 June 2017

Legal Issues

  1. 1 What was the contractual basis for payment after expiry of the last letter of intent?
  2. 2 Is the claimant entitled to payment of costs wholly and necessarily incurred, or only by reference to contract sum/valuation?
  3. 3 Should the court grant the declaration sought by the claimant?

Ratio Decidendi

The parties' conduct after expiry of the last letter of intent evidenced an agreement that Merit would be paid by reference to the contract sum and valuation of works, not on a costs-incurred basis. There was no evidence to support an agreement to remove the payment cap and pay costs wholly and necessarily incurred. The declaration sought by Merit was refused.

Court Disposition

Declaration sought by Merit refused. No other declarations made.