J Browne Construction Company Ltd v Chapman Construction Services Ltd & Ors

A contractual requirement to provide specified timesheets may be a condition precedent to payment, but its breach does not automatically establish fraud or justify recovery of the whole sum paid. An invoice is an application for payment and is not, without more, a representation that every contractual condition has been satisfied.

Fraud and deceit require proof that the relevant representation was false and that the defendant knew it was false or was reckless as to its truth. Breach of contract may nevertheless be established where a party fails to require or provide contractually required documents. A claimant’s concession that payment is due for work actually done may limit recovery to proved or reasonably assessed overpayment.

J Browne Construction Company Ltd engaged Chapman Construction Services Ltd to provide labour for works carried out under a contract with South East Water Ltd. The contract required signed timesheets to accompany invoices and required prior written authorisation for overtime.

J Browne alleged that Chapman Construction Services Ltd, Andrew Chapman and Barry Chapman had participated in fraud, deceit, unlawful means conspiracy and procuring or inducing breach of contract. It also alleged that the contractual documentation requirements had not been met and counterclaimed for unpaid invoices. The central issues were whether the invoices and later-produced timesheets were fraudulent, whether overtime was contractually payable, and what sums were recoverable.

1. Contractual documentation. The requirement to provide timesheets containing the names, dates and shifts worked was a condition precedent to payment. The timesheets produced did not satisfy that requirement, and timesheets had not generally accompanied the invoices.
2. Fraud and deceit. The court found that the timesheets and a purported general overtime authorisation had probably been fabricated after the dispute arose. That finding did not establish an earlier fraudulent conspiracy or deceit. The claimant’s principal analysis was unreliable, and the evidence did not prove that the defendants knew, or were reckless as to whether, the invoices were false. Presentation of an invoice was an application for payment, not necessarily a representation that all contractual terms had been complied with. The requirements for deceit discussed in [2104] EWHC 191 were therefore not met.
3. Breach and procurement. Barry Chapman breached his contractual duty by failing to require timesheets, Chapman Construction Services Ltd breached its duty by failing to provide them, and Barry and Andrew Chapman procured or induced that breach. It was no defence that they had not read the contract terms, applying [2008] 1 AC 1 and [1966] 1 WLR 691.
4. Overtime and relief. Overtime was not authorised in writing and was not agreed to be paid at an enhanced rate. The claimant had limited its claim to overcharging rather than claiming that nothing was payable for work done. On the evidence, the court assessed likely invoice inaccuracy at 15% of invoice value. The pump, valued at £16,500, was to be delivered up or paid for. The parties were invited to calculate the sums due, with consequential orders and costs to be determined if necessary.

First-instance judgment of the High Court. The judgment records no earlier appellate decision.