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In-administration contractor loses £1.7m bus station claim against council
Neil Gerrard Associate editor
Blackburn bus station (Image: Blackburn with Darwen Borough Council)
The administrators of collapsed contractor Thomas Barnes & Sons have failed in their £1.7m High Court claim against its former local council client over a troubled bus station contract.
Bury-based Thomas Barnes & Sons won a deal to build a new bus station in Blackburn at an estimated cost of £4.7m. But the project, for Blackburn with Darwen Borough Council, ran into delays and went over budget.
In June 2015, the council sacked Thomas Barnes & Sons from the project, replacing it with contractor Eric Wright. The bus station, which opened in 2016, ended up costing £8.4m.
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Thomas Barnes contested its dismissal and claimed it had previously expressed concern over the high-tech bus station’s design. In November 2015, the company went into administration.
In their High Court claim, the administrators of Thomas Barnes claimed that it was a combination of the council’s failure to make interim payments and the “wrongful” termination of the contract that led the company to enter administration.
It brought an action in 2020 to pursue claims for monies said to be due under the contract on a “proper valuation” of the works done at termination, and damages for wrongful termination representing Thomas Barnes’ loss of profit on the remaining works.
Judgement
But in the Technology and Construction Court division of the High Court in Manchester, Judge Stephen Davies decided the council did not have to pay any money to the contractor.
He held that the council was entitled to terminate the contract because of the delays in construction. He also ruled that the termination of Thomas Barnes & Sons’ employment was valid and that the council was entitled to offset the costs of employing another contractor to complete the bus station.
Asad Laher, deputy director of legal governance at the council, said: “The council is very pleased with the court’s judgement today which vindicates the council’s decision to terminate the contract with Thomas Barnes.
“The council only ever uses litigation as a last resort, as a way to resolve disputes and in this case always sought to avoid costly proceedings. However, faced with multi-million pound claims, which were meritless, we strongly defended the claim supported by expert legal advice.”
The council will now look to recover its costs of defending the claim.
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