New judgment hand-down: EJW Builders Limited v Edward Marshall & otrs

After a two-day trial in the High Court of Justice in Bristol, HHJ Paul Matthews dismissed the claimant building contractors’ claim that the defendant hotel owners had entered into a partnership or contractual joint venture with the claimants. The claimants alleged that the defendants had agreed to share the profits of the multi-million pound hotel redevelopment with the claimants. The defendant owner developers maintained that the building works undertaken by the claimant were governed by a JCT building contract and that no profit-sharing contract, whether a partnership or contractual joint venture was ever agreed. The second claimant, the director of the main contractor, had denied the existence of the JCT building contract.

After hearing the second claimant’s evidence in cross-examination HHJ Matthews found that unless it was corroborated by an independent and objective source, it could not be relied upon, holding in respect of the parties contractual arrangements, inter alia, as follows:

The Second Claimant’s evidence on this [JCT] agreement, unfortunately chopped and changed throughout his cross-examination, and indeed in the documents proceeding that, including the pleadings. But finally, his evidence was that he did not remember signing it; though, he recognised his signature and accepted that it was “possibly likely” that he signed it.

The second question is whether [the hotel redevelopment] is a single business carried on by the parties. On the evidence that I have accepted, I do not see this as a single business. The Claimants were not contributing their building services to the partnership. They were instead remunerated through the JCT. Mr Lucas was not contributing his plumbing services to the partnership. He was, if anything, just subcontracting through the contractors (the Claimants). The Defendants were not contributing their land to the partnership. They were simply getting it developed.

The Second Claimant was quite clear in his evidence, that he was not undertaking any personal liability for the Defendants’ loans, or any of their other debts, even though he had been prepared to put up his own property as security, up to the value of £130,000, and there was no evidence, at all, that the Second Claimant – or, for that matter, the First Claimant – ever held himself (or its self) out to the world as a partner in this partnership, or contracted with any third party on behalf of the partnership.

So in my judgement, whatever else this was, it was not a partnership.

The burden of proof lies on the Claimants, and, in my judgement, they have not persuaded me that the Defendants ever did promise them [a share of the profits of the redevelopment]. For the Claimants to have the build costs, a salary (not an insignificant one at that) and a share of the profits would have been extraordinarily generous to the Claimants and would have likely deprived the Defendants of the benefits which they hoped for in developing the property in the first place.

The claimants’ claim was dismissed with costs.

Rory Brown represented the defendant developers at trial, instructed by Morgan, Lewis & Bockius UK LLP.

Read the judgment here.