CLS Civil Engineering Limited v WJG Evans and Sons

Part 8 proceedings may determine disputed factual matters where the court can scrutinise the evidence and conclude that the opposing case has no real prospect of success. Substantial factual disputes will usually make Part 8 unsuitable, but the court should consider the utility and proportionality of resolving the dispute summarily.

Contractual communications are construed objectively when determining whether agreement was reached. A liability cap repeatedly accepted in correspondence and admitted in evidence may bind the parties even though negotiations on wider contractual terms remain incomplete. An estoppel assertion is insufficient: the proposed estoppel must have a real prospect of success before Part 7 directions are required.

The claimant developer engaged the defendant contractor for construction works under successive letters of intent. The parties never executed the proposed JCT contract. The letters of intent increased the stated liability cap from £150,000 plus VAT to £1,100,000 plus VAT.

The contractor disputed the suitability of the claimant’s Part 8 claim, alleging substantial factual disputes, incorporation of JCT terms, removal of the cap and estoppel. The central issue was whether the claimant remained subject to the final cap despite the contractor’s final valuation exceeding it.

1. Part 8 procedure. The proceedings were suitable for determination under Civil Procedure Rules 1998, Part 8. The court could examine the disputed evidence against the Part 24 threshold and ask whether the contractor had a real prospect of success. The evidence reasonably available at trial also had to be considered. The alleged factual disputes either were immaterial to the cap or amounted only to speculation that further evidence might assist.
2. Objective construction and liability cap. The contractor’s witness statement admitted that the cap was finally £1.1 million, and the Acknowledgement of Service made the same admission. Independently, the correspondence objectively showed repeated acceptance of successive caps, culminating in the £1,100,000 cap. The submission that the parties had agreed to remove the cap was unsupported.
3. JCT terms. The parties remained in negotiation about the proposed formal contract and never reached agreement on which JCT terms would apply. The relationship was therefore not governed by JCT terms. This conclusion was independent of the conclusion that the liability cap applied.
4. Estoppel. The court proceeded cautiously because estoppel is generally unsuitable for Part 8 determination. Each alleged estoppel was scrutinised against the Part 24 threshold. The arguments had no real prospect of success. The correspondence showed continuing negotiations, and the contractor had repeatedly accepted and relied on the cap.
5. Disposal. Declarations were to be drawn up confirming that the parties’ relationship was not governed by JCT terms and that the claimant’s liability was limited under the letters of intent. The formal draft declaration stated the figure as £1,100,100 plus VAT, although the judgment’s conclusions consistently referred to £1,100,000 plus VAT. The parties were invited to agree the order within 10 days.

This was a first-instance Part 8 claim issued on 22 February 2023. No appeal or lower-court decision was stated.