BuildLaw Issue 29 September 2017 | Page 21

Facts
The claimant (Erith) was a group of companies which provide enabling services to the construction industry, including waste removal and haulage services. Erith was owned by Mr Darsey. The defendant (Mr Murphy) was the owner of a site located on the east side of Horn Link Way, Greenwich, operated by his company, Murphy's Waste Limited (MWL) (now in liquidation), which operated as a waste collection and transfer station.
Erith contended that in August and September 2014 Murphy entered into an oral agreement with Erith that Erith would supply waste clearance services for which Murphy would pay or indemnify the Erith group (referred to in the proceedings as the 'works agreement'). This was in conjunction with the parties entering into negotiations for Erith to purchase the site and MWL. No specific price was agreed for Erith's services, but Erith estimated that the costs would amount to approximately £500,000 based on Darsey's visual assessment of the quantity of waste. In October 2014 MWL paid £109,507.17 in respect of the services provided by Erith (using funds provided by Murphy) following invoices received by MWL from Erith. Erith did not issue any further invoices on the understanding that further waste removal costs incurred by Erith would be reflected in the price for the site and MWL.
Erith asserted that between November 2014 and January 2015 the parties entered into a revised agreement (referred to in the proceedings as the 'revised works agreement') under which Erith agreed to provide further waste clearance services (up to a value of £1 million), for which Murphy would pay. Erith contended that the agreement had been that payment for these services would be deferred and treated as part of the purchase price and that in event that the sale did not proceed, Murphy would be personally liable.
Ultimately, the sale of the site and MWL to Erith did not proceed, as the parties were unable to agree terms. Shortly thereafter MWL went into liquidation. The sum outstanding for the services provided by Erith was £630,053.82. Erith stated that additionally, it had made a loan of £85,000 to Murphy for staff costs, for which it was entitled to be repaid.
Murphy disputed Erith's claim on the basis that the works agreement was made between Erith and MWL (not Murphy in his personal capacity). He stated that there was no revised works agreement and no indemnity or enforceable guarantee, and that the loan of £85,000 was made to MWL and not to Murphy in his personal capacity.