Hurst Stores & Interiors v M L Europe Property

There was a unilateral mistake by the trade contractor in respect of the final account statement by which the final payment to be made by the employer was to be accepted by the trade contractor in full and final settlement of all its claims arising out of the trade contract
 
HURST STORES AND INTERIORS LTD v ML EUROPE PROPERTY LTD

Technology and Construction Court
Mr Recorder Colin Reese QC
25 June 2003
 
 
This was one of those rare cases where the decision of an adjudicator went to court for final determination and where the decision was overturned.
 
Mr Recorder Colin Reese QC held that there was a unilateral mistake by the trade contractor in respect of the final account statement prepared by the construction manager’s representative signed by the trade contractor’s project manager by which the final payment to be made by the employer under the statement was to be accepted by the trade contractor in full and final settlement of all its claims arising out of the trade contract and the statement should therefore be rectified to omit the reference to it being in full and final settlement (with the result that the trade contractor was entitled to advance its disruption and preliminaries claims otherwise barred by the statement).
 
The alterations to the interim statements of account previously signed by the trade contractor’s project manager when compared to the final statement of account were that the word “final” was substituted for the word “interim” and the wording that the final payment was to be accepted by the trade contractor in full and final settlement of all its claims arising out of the trade contract was never discussed with or notified to the project manager. The representative of the construction manager who dealt with the trade contractor’s project manager had at least “shut eye” knowledge of the project manager’s mistake in that that representative wilfully “shut his eyes” to the risk that the project manager would not notice the newly-introduced and potentially prejudicial words which the project manager had no reason to suspect were there or wilfully and/or recklessly failed to take such steps as an honest or reasonable man would have taken if he knew (as the representative did know) that the final statement of account he had prepared did not merely reflect the agreements on the value of the trade contractor’s works that he had recently reached with the project manager after protracted negotiations.
 
Advice Note
It is not always the case that a party will be bound by the contents of an agreement it has signed if it was misled as to its effect.