Collapsed firm loses compensation battle over bus station job

Owners of former Preston-based contractor Thomas Barnes have lost their fight for compensation over a bus station job they claim resulted in the firm’s collapse.

Thomas Barnes & Sons was appointed to build Blackburn bus station in 2015 but was removed by client Blackburn with Darwen Borough Council, the client, after the project suffered “significant cost increases and delay overruns”. Later that year the £14.2m-turnover business entered administration.

At the Technology and Construction Court, Thomas Barnes claimed the combination of the local authority’s failure to make interim payments and its wrongful termination of the contract caused it to go into administration.

Administrators for the firm argued that the council owed the contractor £1.8m in damages relating to being “wrongfully terminated” from the contract, as well as for works it had already completed on the job up until its termination.

Its former directors also claimed the contractor was not substantially involved in the design of the bus shelter, which it blamed for cost overruns and delays. They said Thomas Barnes & Sons was contracted only to carry out construction work.

They also claimed project designer Capita was responsible for the failings, with their representatives from Hill Dickinson adding the council and Capita were “very keen to pin the blame” for the time and cost overruns on the contractor.

“The defendant’s decision to terminate was both led by Capita and politically motivated to put the blame on the claimant,” the lawyers said.

The council accepted that Thomas Barnes was only under contract to complete the construction work, but claimed the contractor had not completed the work it had committed to deliver, which led to it being removed it from the job.

It argued it was owed £1.9m from the contractor, after having to appoint another contractor to complete the work.

Judge Stephen Davies ruled that neither party would receive compensation. He said the contractor had “no prospect of recovering anything” in the case, adding that any funds it could receive would be “more than extinguished” by the defendant’s right to recover additional costs from it.

“Whether or not the defendant terminated under the contract or accepted the claimant’s repudiatory breach the same essential consequences follow, which is that the amount of the defendant’s set-off would realistically extinguish any claim which the claimant might establish on its claim. On that basis there is no need to go further since the claimant cannot succeed in establishing any net judgment in its favour,” Davies added.

Construction News contacted the legal teams for both Thomas Barnes and Blackburn with Darwen Borough Council for comment.

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