A L Barnes Limited v Time Talk (UK) Ltd CIP EWCA civ 402 [2003]

A L Barnes Limited v Time Talk (UK) Ltd CIP EWCA civ 402 [2003]

Time Talk (UK) Ltd appointed “Barnes” a contractor for supply and fit out as per the requirements of Time Talk.There was merely an agreement that work would be done at a particular site; since there was no agreement as to price, any claim by the contractor had to be for reasonable remuneration on a quantum meruit basis under the supervision of the Project manager.(an employee of the Time talk)

Time Talk decided that the venture had been a failure and employed a firm BCS to look into the costings and claims. It was found that the Barnes [contractors] were charging Time Talk for sums which the project manager was claiming for his services, although he was engaged and paid by Time Talk.

It was held that this arrangement had been initiated by an agreement made in Leicester in 1997 between a Barnes director (Robert Gibson), a Time Talk director (John Colbert) and the project manager (Andrew Craft, trading as Craftwork). This agreement was that Barnes was to go on Time Talk’s list of contractors who would be invited to tender for work and, if work was done, Mr Craft was to raise an invoice against Barnes for his supposed services and Barnes would then incorporate the sum so invoiced in the invoices they raised against Time Talk. Those Barnes invoices would then be passed for payment by Mr Colbert and once Barnes had received payment, they would pass a sum of £2,500 or so to Mr Craft for services rendered.

The contracts for supply and fitting out in the case were not contracts with an illegal purpose. It so happened that the mode of performing the contracts entailed such breach of fiduciary duty; but illegality in performance is not, in itself, enough to render the contract unenforceable unless the contract was made with the purpose of doing an unlawful act or an act contrary to public purpose, see St John Shipping Corporation v. Joseph Rank Ltd [1957] 1 QB 267.  

In deciding who is the successful party the most important thing is to identify the party who is to pay money to the other. That is the surest indication of success and failure.

It is not normally right to segregate a large element of the costs and thereafter to decide who the successful party is. It needs to be decided at the outset. Bearing that matter in mind, the Court held that the claimants[Barnes] success should be reflected by the recovery of a small proportion of their costs and fixed that proportion at 25% and would accordingly allow the cross-appeal to that extent.

A L Barnes Limited v Time Talk (UK) Ltd CIP EWCA civ 402 [2003]