Alfred McAlpine Capital Projects Ltd v Tilebox Ltd, Court of Appeal - Technology and Construction Court, February 25, 2005, [2005] EWHC 281 (TCC)

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Alfred McAlpine Capital Projects Ltd v Tilebox Ltd, Court of Appeal - Technology and Construction Court, February 25, 2005, [2005] EWHC 281 (TCC)

SMITH BERNAL WORDWAVE

Neutral Citation Number: [2005] EWHC 281 (TCC)

No HT-04-380

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Court No 7

TECHNOLOGY AND CONSTRUCTION COURTS

St Dunstan's House

133-137 Fetter Lane

London EC4A 1HD

25th February 2005

Before:

MR JUSTICE JACKSON

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BETWEEN:

ALFRED McALPINE CAPITAL PROJECTS LIMITED

Claimant

-v-

TILEBOX LIMITED

Defendant

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Computerised Transcript of the Stenograph Notes of

Smith Bernal WordWave Limited

190 Fleet Street, London EC4A 2AG

Tel: 020 7404 1400 Fax: 020 7404 1424

(Official Shorthand Writers to the Court)

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MR PAUL DARLING QC and MR PAUL SUTHERLAND (instructed by CMS Cameron McKenna) appeared on behalf of the Claimant.

MR ROBERT AKENHEAD QC and MR RIAZ HUSSEIN (instructed by Herbert Smith) appeared on behalf of the Respondent.

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JUDGMENTFriday, 25th February 2005

1. MR JUSTICE JACKSON: This judgment is in eight parts, namely:

Part 1. Introduction.

2. The issue in this case is whether or not a clause providing for liquidated damages contained in a building contract made between the parties is valid and enforceable.

3. The claimant is Alfred McAlpine Capital Projects Limited, formerly known as Alfred McAlpine Special Projects Limited. I shall refer to this party as "McAlpine". The defendant is Tilebox Limited, a development company which was formed in 1998 for the purpose of acquiring and developing Onslow House in Guildford. I shall refer to this party as "Tilebox". The principal directors of Tilebox are Mr Edward Hutley and Mr Charles Money-Kyrle.

4. By way of introduction, I should also mention three other firms or organisations who feature in this case. Mercer & Miller are a firm of quantity surveyors which acted for Tilebox in relation to the development of Onslow House. The firm Insignia Richard Ellis, which changed its name to CB Richard Ellis, have advised Tilebox in relation to the future letting of Onslow House. I shall refer to this firm as "Richard Ellis".

5. The organisation which is funding the development of Onslow House is Standard Life Assurance Company. Standard Life Assurance Company and a related body Standard Life Investments Limited have worked in tandem in relation to this investment. The division of responsibility between these two companies is not relevant to the issues in this case. I shall therefore refer to them compendiously as "Standard Life".

6. This is a sufficient introduction of the main participants in the events with which this court is concerned. It is now necessary to outline the facts.

Part 2. The Facts.

7. In 1998, Tilebox purchased a leasehold interest in Onslow House. At that time, Onslow House comprised about 50,000 square feet of space. The directors of Tilebox planned to strip the building to its core and completely refurbish it creating in the process approximately 90,000 square feet of space.

8. Mr Hutley said in evidence, and I accept, that the plan was to create a grade A top of the range building which would be suitable for use as headquarters by a substantial corporation.

9. During 1999, Mercer & Miller sent out tender...

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