Re: Please help. I am being sued through a court. How do I respond?


"Howie" <to.reply.pls.see.sig@xxxxxxxxxxxxxxxxxxxxxxxxxx> wrote in message
news:dtkph3lvfvb3thpb4j2gkqisvd7ve11a10@xxxxxxxxxx
<snip>

I wonder if the OP quoted far too low a figure for the job
|and then looked for a way out. That might be an unjust supposition but
it
|might also be in the judge's mind.
|
I understand that opinion and therefore the possibility. It might
be useful for me to explain what actually happened. I'll do so
here:

<snip>

|Assuming for the sake of argument that you cannot afford a solicitor,
that
|means the claimant will very probably win. However the claimant might be
|worried about mounting legal costs if you don't actually have any money
to
|satisfy judgment. It is very important to try to negotiate and see if the
|claimant would accept a reasonable settlement figure. Presumably this
court
|summons didn't come totally out of the blue, and there were threatening
|letters first. That would have been the best time to negotiate.

There were certainly many items of correspondence. 300 plus, -
all emails. I have kept every one of them. It will take me days
to compile them into readable threads of what happened in each
accusatory area during the job.

Here is the basic story of the situation:

We quoted £78,000 (inc vat) for the work. We wrote our own
contract which in reality proved both parties intent to do - and
pay for the job. We wrote this ourselves because the architect
had offered to prepare a standard JCT building contract but did
not do so and the clients were desparate to begin the work. We
are not denying that we contracted to do a fixed amount of work
at a fixed price. The client provided the drawings, which were
innacurate in many areas. (NB: Since this dispute began, the
client has removed and retained all drawings and the written
specification and will not let us have sight of them, - despite
our numerous requests for copies).

The job was 40 miles from our normal (local) work area. However,
we costed this into the quote and had planned to reduce our
actual costs by ensuring that a full vehicle (6 workmen) would
travel to site each day. We ourselves were only planning to
attend once each week because we had designated one of our men as
site-manager and, crucially, the job had a supervising Architect,
- who was a friend of the client.
After we had started the work, we were informed that the client
had not resolved a dispute with the neighbour to allow us to
build the garage by erecting scaffolding on their garden and
allowing us access through it. We had been totally unaware of any
dispute but we said that we would try to work around this problem
if it could be resolved within the next four weeks. It wasn't
ever resolved, even though it can be proved that I personally, -
as a favour to the client, approached the neighbour in question
and attempted to resolve it on their behalf.
The architect certified only two payments before our client fell
out with him (for not arranging a party-wall act to allow the
garage element to continue). The supervising architect was
dismissed by our client. From this point onwards, we agreed, and
charged our own payments and unfortunately allowed the client
themselves to supervise the build and direct our workforce.


This left us with two problems:
1/ We had not been able to send 6 men to site each day because
they were (literally) falling over each other. Our original plan
had been to move workmen onto the garage element of the job as
each one finished their daily allocation of the main build.
Therefore, they would have been working much more efficiently.
So, not only were they unable to move onto a new part of the
build, we were also paying them to sit around, waiting for a
previous bit of work to be ready or simply waiting for enough
space for them to work on their specialised area again after
others had done their bit. We were effectively paying less men to
travel a larger distance and then sit around much more than usual
without the supervising architect to deal with it. Our fuel
costs, wages costs and timescale spiralled.

So you redraft the contract to allow for the change or in fact treat the
entire contract as breached because a major element of it is now not
possible. It was your choice to try and plough on regardless and from the
point at which you accepted these changes you can't go back and claim the
client is at fault.


2/ We had not budgeted to personally attend the site more than
once per week. We simply could not afford to do so. Also, the job
was always planned and designed as a 'budget build'. At this
point, the client also increased the job costs hugely by choosing
to do such things as.. add specialised window ledges (not on the
drawing); fit a kitchen of a much greater size than on the
drawing; add dado and picture rails (not on drawing); use more
colours and specialised paints - requiring more coats and extra
worktime cutting-in, etc. We then had additional work in the form
of extras when we discovered (for example) that the existing roof
was not felted.

So why didn't you simply add these extra costs to the contract charges?


Our men began to be used as collectors of many
additional items such as psecialist bathroom fittings and tiles.
Our vehicle was on the road, with one of our workmen in it many
times each week; and all on the whim and at the behest of the
client. Of course, we only found out about this from our men when
it was much too late for our wallets.

I'm sorry but not supervising your own men properly, in fact letting the
client supervise them, is hardly anyone else's fault.


As you can imagine, all this cost us more time, and at a much
higher daily cost to us than ever expected, and this was in
addition to the cost of lower-than-planned numbers of personnel
on the job. In financial terms, it's amazing how these problems
compound; I estimate the actual additional costs of the situation
as it stood to be approx £1,500 per week, - and for double the
original job timescale. Therefore, looking back, the total
additional cost to us was in the region of £32,000.

So why aren't you charging this additional cost to the client? There's no
point in having a contract in the first place if you keep letting the client
change the deal but not the price.


We had said to the client at the time of them sacking the
supervising architect that we would all work together to TRY to
complete the build within the budget and timescale but that the
original contract was no longer applicable. Big mistake - and
very niaive because we did not get it in writing.
Eventually, when we had run out of money and also personally
spent over £10,000 more than they had paid us (at that point), we
were forced to call a halt and explain the problem. Not only was
ther no profit. We had already made a significant loss.
Even then, they asked if they could pay our men directly on a
daily basis and direct them to do the job! We agreed, as long as
was a private arrangement between them and nothing to do with us.
(They were all sub-contractors so we just released them from
working for us for this period). This appeared to be working
until they realised how much daily-rate work was costing them and
called a stop themselves. It was at this point that they reverted
to the original terms of our contract and began threatening legal
action if we did not fulfill our obligations.

It strikes me that the contract is no longer in existence from the point at
which the client started paying your men directly but it really depends on
what exists in writing between you.


We did what we
could for another three weeks but we were then financially on our
knees, - and still are.

I'm not surprised.


This episode has destroyed our partnership and resulted in the
above litigation.

Again I'm not surprised. I can't believe how badly you handled this
situation from the very beginning. It's pretty much an object lesson in how
not to run a building company and how not to manage a building contract.
When the client changes the deal or tells you that a major part of it can no
longer be built you don't just keep trying to muddle through until it all
goes tits up. You hit them hard with the breach and renegotiate the deal or
walk away from it. In fact you have the upper hand at that point and they
risk being sued. You've just let the client continue to walk all over you,
in high heels.


We really do not have any financial resources to fight it.

Do you have any financial resources to pay it if you don't fight it? If
neither of you have assets, house etc, then there's no point in the client
suing you. He can't recover what isn't there. In that case just put together
what defence you can and don't worry over much about it. However if you have
assets then you either fight it properly or lose them. As non limited
partners you are personally liable and any asset or income stream you
possess can be taken by the court in settlement.

You might be better off thinking more about damage limitation (getting rid
of your assets fast) than how to defend this action. The trouble is the
situation is extremely complex and what exists in writing will largely
determine who is liable each time the deal changed and whether or not the
contract was breached and by whom. The crucial point is probably when the
client started paying your men directly. You might have been able to claim
the contract was void by mutual agreement from that point on. The trouble is
you went back and carried on working again. On what basis I can't possibly
imagine.
--
Dave Baker - Puma Race Engines


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