EWHC 2847
SOM sublet the performance of certain architectural and engineering services to Jacobs in relation to part of the Qatar Petroleum complex project. Works were carried out between April 2006 and February 2008, but no contract was agreed. Jacobs sought payment of some £4.7m in unpaid fees. There were seven invoices, and Jacobs sought summary judgment in respect of three of them. SOM said that no further sums were due and raised claims of set off and counterclaim in excess of £2.5m. The court may order summary judgment if it considers that a party has no real prospects of succeeding or successfully defending the claim at issue. Equally, Mr Justice Coulson noted that when a court hears a summary judgment application, it can make a conditional order, requiring a party to pay a sum of money into court. Such an order is appropriate if the court considers that it is possible that the defence may succeed, but that on the evidence before the ccurt, it is improbable that it will do so.
For example, here, in relation to one of the invoices, there was contemporary evidence in relation to the percentage progress made by Jacobs on a number of tasks. This evidence showed that giving credit for the first two invoices, no sum could be due in respect of the third invoice. The percentage completion figures came from the ultimate employer. The Judge noted that it may be that when the claims went to a full trial, Jacobs would be able to demonstrate that these percentage completion figures were wrong. However, for the purposes of a summary judgment application, his only concern is to see whether or not there was a real prospect of a party defending a particular head of claim. Here, the origin of the figures strongly suggested that SOM's position was correct. That said, the Judge did consider that Jacobs was entitled to summary judgment in respect of two of the invoices. Having so decided, he then went on to consider whether SOM had a real prospect of successfully defending these claims by way of set-off and counterclaim.
Mr Justice Coulson said that the counterclaim needed to be treated with some scepticism. For example, at the time that Jacobs' contract was terminated, there was no suggestion by SOM that Jacobs was in breach of contract or had failed to perform in accordance with its terms. No specific allegations of defective or poor performance had been made. The termination was not for reasons of default. The majority of the criticisms now being made had only been made for the first time in the statements produced in answer to the application for summary judgment. There was also an absence of any independent or third party evidence in support of the allegations of breach. As the allegations made were ones of professional negligence one would expect some sort of expert evidence to back them up. In addition, SOM had employed other consultants to complete the work performed by Jacobs, but there was no evidence from them which supported any of the criticisms now being made by SOM. That said, the Judge then considered the elements of the counterclaim "armed with the necessary scepticism".
In respect of one of the nine items, the Judge concluded that SOM demonstrated they had a real prospect of success of establishing one. This served to reduce the amount Jacobs could recover. In relation to three items, the chance of success could not be said to be "higher than merely possible". Accordingly, whilst these served to reduce the amount awarded to Jacobs, SOM were ordered to pay a sum of money in respect of those claims into court. For the other claims, SOM had not demonstrated the real prospects of success and they were ignored for the purposes of the application. There was also a claim in relation to the "costs of completing and validating [Jacob’s] scheme design". This too was ignored. No specific allegations of breach had been made and the claim was entirely global. If the costs were in reality the costs of rectifying the breaches of contract, then this needed to be identified. The complete absence of evidence meant that for the purposes of the application, the claim had no prospect of success.