A & V Building Solution Limited v J & B Hopkins Limited

A court should not reopen or correct matters determined in an earlier judgment where the time for raising the issue has passed and the court has no jurisdiction to make the proposed correction. Statutory deductions arising after the substantive judgment may be relevant to the execution or stay of judgment, rather than altering the amount adjudged to be due. VAT may be awarded on the evidential basis accepted by the court, while leaving liberty to apply where the tax authority may adopt a different treatment. Interest calculations should follow the sums and issues determined in the relevant judgment; points not raised at the proper stage may be treated as too late.

The judgment concerned outstanding consequential matters in a construction dispute between A & V Building Solution Limited and J & B Hopkins Limited. Earlier judgments had determined almost all issues on the merits, including the amount due for measured works, variations and loss of profit. A subsequent judgment dealt with adjudicators’ fees and interest.

The court was asked to determine the correct calculation of the amount due, VAT, the effect of the Construction Industry Scheme, interest, sums due to J&BH, and the appropriate order. The issues included whether an alleged error in the previously agreed payments could be corrected and whether later CIS deductions altered the judgment debt.

1. Earlier determination. The court declined to correct the alleged error in the amount previously paid. That figure had been agreed throughout and determined in the Fifth judgment. The issue had not been raised as a correction to the draft judgment, and the court had no jurisdiction to reopen it at this stage. The Fifth judgment continued to determine the amounts due, subject to the expressly reserved matters and enforcement-related issues.
2. VAT. The loss-of-profit award was damages and was not subject to VAT. On the other sums, the evidence supported the parties’ established approach that 5.66% of the works attracted VAT at 20%. VAT of £1,069.22 was therefore added. Liberty was granted to apply within six months if HMRC contended that 20% VAT applied to the whole relevant sum. The court did not determine the correct tax interpretation beyond the order made.
3. Construction Industry Scheme. Finance Act 2004, section 61(1), and regulation 7(1) of the Income Tax (Construction Industry Scheme) Regulations 2005 did not at this stage reduce the amount found due. The CIS issue was relevant to any stay of execution or terms governing payment. If a stay application were made, evidence would be expected concerning the treatment of sums which should have been paid before the later change in CIS status.
4. Interest. The defendant was too late to raise an argument that interest on fees should exclude VAT. Interest was calculated on the full £17,400. The court adopted the lower agreed figure for interest on fees, recalculated interest on the previously determined sum plus VAT, and accepted the defendant’s de minimis figure for interest on damages.
5. Further order. It was too early to determine the final sum payable, because that depended on the costs orders. The parties were directed to submit costs submissions and replies on the specified dates.

The judgment records six earlier judgments in the same litigation, including [2023] EWHC 301 (TCC), [2023] EWHC 1483 (TCC), [2023] EWHC 2475 (TCC), [2023] EWHC 2576 (TCC), [2024] EWHC 1510 (TCC) and [2024] EWHC 2295 (TCC). The present decision determined remaining consequential matters following those judgments. The court noted a possible future application for leave to appeal, but no appeal was determined in this judgment.