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


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.

Well. That's true. But we did say that we would only try to do
our best within the original budget. We haven't got it in
writing.

|
|> 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?

Oh, we did. but it's the extra time taken on a job which was
costing us more than our usual costs because of the distance of
the job that compounded it. We didn't realise at that time just
how much that was costing. Our fault.
|
| 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.

True, but this only happened because the Supervising Architect
had been sacked and we hadn't built-in any costs for us
supervising it on a daily basis.

|> 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.

Perhaps I can include those costs in our counterclaim?
|
|> 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.

Well, we did all agree, and some of their emails refer to that
situation.

| 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.

We don't have assets. the only items we own are a few bits of
tools and machinery which we use to earn our individual incomes.

|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.

Actually, having checked, we only organised some scaffolding and
another skip in order that they could continue to pay the men
directly. Perhaps that helps. Basically, we thought that we were
all working together to 'do the right thing' and get their build
finished. Looks like we are about to learn a very expensive
lesson as a result.

Your reply has been very much appreciated, nontheless. Thank you.
.

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