Case No: HT 04 95
Neutral Citation Number: [2005] EWHC 297 (TCC)

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 11 February, 2005

Before :

HIS HONOUR JUDGE TOULMIN, CMG Q.C.

- - - - - - - - - - - - - - - - - - - - -
Between :

	J.P. MAC LTD.	Claimant	
	- and -		
	HANSON QUARRY PRODUCTS (EUROPE) LTD.	Defendant	

- - - - - - - - - - - - - - - - - - - - -
Tape Transcription by Sorene Court Reporting & Training Services
73 Alicia Gardens, Kenton, Harrow, Middlesex.  HA3 8JD
Telephone No: 020 8907 8249.  Fax No: 020 8907 5820    
- - - - - - - - - - - - - - - - - - - - -

MISS R. ANSELL (instructed by Messrs. Fenwick Elliott) for the Claimant
MR. A. PALMER, Q.C.   (instructed by Messrs. TLT, Solicitors) for the Defendant

- - - - - - - - - - - - - - - - - - - - -
Judgment

Judge Toulmin: 
1.	 This is a claim by J.P. Mac Ltd. (J.P. Mac) against Hanson Construction Products (Europe) Ltd. (T/A Hanson Construction Products) (Hanson) in respect of work which J.P. Mac carried out as part of the renewal works on the M27 motorway between Junctions 2 and 4.  
2.	J.P. Mac claims the sum of £164,816.59. This sum is agreed, subject to liability.  It is one of two claims against Hanson by sub-contractors which carried out work on the carriageway of the M27 motorway. 
3.	The main contractor on the M27 renewal works was a joint venture formed by Hanson and a company known as Stenoak Associate Services plc (Stenoak).  Stenoak had a wholly owned subsidiary, Associated Asphalt Ltd. (AAL). The joint venture was employed by the Secretary of State for Transport, the Environment and the Regions as it then was, later the Highways Agency, to carry out the work on the M27.  
4.	The relationship between the parties in the joint venture was governed by an agreement by deed dated 30 November, 2001 (the joint venture agreement). The joint venture agreement also regulated the rights and obligations between the employer and the parties to the joint venture.  
5.	On 20 June, 2002 Stenoak/AAL became insolvent and Hanson and Stenoak executed a deed which (amongst other things) entitled Hanson to receive payment under the contract direct from the employer. The joint venture agreement was terminated by Hanson on 4 July, 2002.  Hanson has refused to pay the outstanding invoices in respect of work which J.P. Mac carried out on the M27.  
6.	There is no dispute that originally Hanson entered into a sub-contract with J.P. Mac for the supply of civil engineering operatives and plant for the mobilisation works on the M27 project.  Hanson claims that the contract was confined to work to a value of £20,000, and that thereafter operatives and plant were supplied by J.P. Mac, pursuant to a sub-contract between Stenoak and/or AAL and J.P. Mac.  Hanson contends that there was therefore no obligation under the joint venture agreement for Hanson to pay Stenoak/AAL sub-contractors.  It also, of course, contends that after the initial work, the sub-contract was between J.P. Mac and Stenoak/AAL.  
7.	J.P. Mac claims that its sub-contract remained with Hanson and that it never agreed that after the mobilisation work had been completed, it would sub‑contract to AAL/Stenoak.  
8.	Originally, J.P. Mac claimed that if its primary contention failed, it had two further contentions. First, it claimed that J.P. Mac was entitled to be paid by Hanson on a quantum meruit basis for work which it had carried out for the joint venture. Secondly, J.P. Mac claimed that it was entitled to recover payment from Hanson for those sums paid to Hanson by the Secretary of State/Highways Agency in respect of work carried out by J.P. Mac on the basis that Hanson held those sums in trust for J.P. Mac, or alternatively that the monies were received by Hanson for the use of J.P. Mac.  These contentions are not now pursued.
9.	In the Autumn of 2001 neither J.P. Mac, nor Hanson had any reason to think that Stenoak or AAL would become insolvent.   
10.	Both parties have commented adversely on the fact that a number of witnesses who could have been called to give evidence did not do so.  Mrs. McCarthy, the wife of Mr. McCarthy, is a director and company secretary of J.P. Mac. She was responsible for the paperwork, including documents generated by computer.  Mr. McCarthy said, and I accept, that he is not computer literate.  There are a number of issues relating to accounts and documents, and in particular the authenticity of the original CD on which various invoices were created. There has been no suggestion that Mrs. McCarthy was unco-operative or unwilling to give evidence.  Mrs. McCarthy certainly could have assisted the Court, particularly in relation to the computer evidence.  
10(a).	Also of crucial importance in this case would have been the oral evidence 	of 	Mr.   Webster. Hanson's case is that after the initial contract with J.P. Mac to 	the value of £20,000 worth of work, it was the intention that J.P. Mac should 	be contracted to Stenoak or AAL for the further work.  Its case is that 	Mr. Webster was the member of the commercial team to which the task of 	arranging the AAL contracts fell.  It contends that Mr. Webster explained to 	Mr. McCarthy that the continuing contract would be with AAL.  
11.	P. Mac/Mr. McCarthy's case is that he did have a conversation with Mr. Webster, as a result of which subsequent payments were made by AAL "because it was quicker and easier".  There is no dispute that Mr. Webster helped Mr. McCarthy with his later invoices, and worked with him subsequently, although Mr. McCarthy says that the last time he saw him was about two years ago.  J.P. Mac says that on Hanson's case Mr. Webster is the person who is likely to have explained the contractual position to Mr. McCarthy, and it is remarkable that Hanson did not call Mr. Webster, or issue a witness summons requiring him to give evidence, and that I should draw adverse inferences from the fact that it did not do so.  
12.	J.P. Mac says on its side that it could have called Mr. Webster, but reasonably chose not to do so on the basis that if Mr. McCarthy's evidence was believed, then there was no need to call him to prove its case.  There is a hint by J.P. Mac that they contend that Mr. Webster might be an uncertain witness for them to call, given that he had been employed by Stenoak and then by Hanson, and had previously given evidence on behalf of Hanson in relation to a claim brought by another sub-contractor.  
13.	Hanson's case is that I should draw the opposite adverse conclusion from J.P. Mac's failure to call Mr. Webster to give evidence. Hanson says that (quite understandably) it did not call Mr. Webster because having initially given a statement to Mr. Flowerdew, Hanson's solicitor, Mr. Webster attempted largely to retract it.   Hanson contends that Mr. Webster and Mr. McCarthy got on well together. There was no reason why Mr. Webster could not have been called to give evidence if his evidence would have supported J.P. Mac's case.  Mr. Webster could cover every aspect of Mr. McCarthy's case, including the initial invoices, crucial conversation where Mr. McCarthy alleges that Mr. Webster said that it would be "simpler and easier" for Mr. McCarthy to be paid by AAL, and the CD-R which was created in February 2003 and to which I shall refer in due course.  I shall refer to this issue, having reviewed the available evidence.
i)	THE FACTS
14.	In September 2001 J.P. Mac was working on another highway project - the repair of the A38 - under a sub-contract with Hanson.   In September 2001, when Hanson was assembling sub-contractors for the M27 project, Mr. Elms, Hanson's project manager, and Mr. Doyle, his deputy, spoke to Mr. McCarthy about J.P. Mac undertaking work on the M27.  On, or soon after 1 October, 2001, J.P. Mac started to work on site on the M27 project.  There is no dispute that at this stage J.P. Mac was working as sub-contractor for Hanson.  At this stage Mr. Elms and Mr. Doyle were not clear who J.P. Mac's work would ultimately be contracted with.   
15.	As early as September 2001 Mr. Elms and Mr. Doyle were aware of the existence of the joint venture, but it is accepted that at this stage they were negotiating with Mr. McCarthy for J.P. Mac on behalf of Hanson.  There was a very short time for them to get the project up and running, and they wanted Mr. McCarthy to start work urgently on the new project.  I accept that, as between Hanson and Stenoak, the compound work initially to be undertaken by J.P. Mac was, under the terms of the joint venture, the responsibility of AAL/Stenoak.  I also accept the evidence of Mr. Elms that around 14 September, 2001 Mr. Elms and his opposite number, Mr. Shires, together with Mr. Castle of Hanson and Mr. Jones of Stenoak, agreed informally that Hanson would organise and pay for the setting up of the site compound and offices, and that the cost involved would be treated as money due to Hanson under the joint agreement.  As I understand it, the work involved clearing a field so that it could be used to house temporary offices in which materials could be stored.
16.	Mr. Elms estimated that the cost of this work would be £20,000.  He discussed the question of cost with Mr. Shires, and they agreed that there would be a ceiling on the cost of the work of £20,000.  Mr. Elms said that if the figure had been exceeded, he would have raised a supplementary order with AAL.  There was no discussion with Mr. McCarthy about the cap on the cost of the work for which Hanson was prepared to pay.  Equally, there is no dispute that by the time when Mr. McCarthy received a sub-contract from Hanson on 10 December, 2001, that he had done work on the M27 motorway to a value substantially in excess of £20,000.  The work which J.P. Mac had undertaken by that date had gone far beyond the setting up of the site compound. 
17.	Mr. Elms said that he left to others the responsibility for explaining to Mr. McCarthy, and obtaining his agreement, that his sub-contract for work in excess of the £20,000 cap was with AAL/Stenoak.  He understood that this task would be undertaken by Mr. Webster, a quantity surveyor who, until May 2002, was a Stenoak member of the team.   Mr. Elms and Mr. Doyle would only be directly involved if there was a problem.  
18.	There is no doubt that if J.P. Mac's work on the M27 project was to be contracted with Stenoak/AAL rather than Hanson, this could only happen with Mr. McCarthy's knowledge and consent.  Otherwise, Mr. McCarthy/J.P. Mac was entitled to assume that the contract continued to be with Hanson.  
19.	In the absence of much evidence that could have been made available, it is particularly important to consider the evidence from the witnesses in the context of the contemporaneous documents.   
20.	On 28 October, 2001 Mr. McCarthy signed his agreement to the site rules on the M27 project, identifying the company for which he was working as Hanson.  
21.	A spreadsheet, showing time sheets for Mr. McCarthy and other J.P. Mac employees has Week 1 starting on 1 October, 2001 with a value of £4,796; Week 2, £4,796; and Week 3, £9,246.72 making an overall total for the three weeks of £18,838.72 (plus VAT).  The entries for the two following weeks, starting on 22 October, 2001, amounted to £29,236.54.  These were struck through in red by someone at J.P. Mac.  This spreadsheet accompanied invoice no. 202, addressed to Hanson. J.P. Mac's evidence is that it was sent on about 22 October, 2001.  Hanson contends that it was sent later, in November 2001, and that deletion of Weeks 4 and 5 represented an acknowledgement that after the first three weeks the contract was with AAL/Stenoak and not with Hanson.
22.	On 5 November, 2001 Mr. Webster sent Ms Kehoe, the sub-contracted administrator at AAL, a fax with the message, "Please find sub-contract for J.P. Mac Ltd.  If you would do the necessary, I would be obliged".  There followed, under AAL letterhead, a brief description of the sub-contract works to be undertaken by J.P. Mac.  This was followed by Mr. Webster's signature and the date of 5 November, 2001.  
23.	Ms Kehoe said that 'doing the necessary' was an instruction that she should raise the sub-contract for authorisation by a director, and that once it had been authorised and returned, she would send out the sub-contract to J.P. Mac in the general post.   I have seen a copy of the sub-contract order duly signed by the AAL/Stenoak director.  
24.	I accept Ms Kehoe's evidence in her written statement that this document would normally be sent out in the ordinary course of post in duplicate to the addressee.  One copy would sent to the accounts department, and one copy would be kept on file. The accounts department would normally insert the account number on the sub-contract order form, and it appears that the accounts department sent Ms Kehoe a copy of the sub-contract as so endorsed for her file.  Ms Kehoe said that the sub-contract, together with the billing form issued by AAL, would normally have been sent in the course of business either on 5 November, 2001 or shortly thereafter.  Mr. McCarthy's case is that he never received these documents.  
25.	There is a copy of the pro forma consent to sub-contractor self-billing arrangements signed by Mr. McCarthy.  It is dated 14 January, 2002.  Mr. McCarthy says that he did not receive the document until the lack of a signed document was noted and chased up by Mr. Webster, who took a copy from his filing cabinet on site and handed it to him.  The explanatory notes included procedure for self-billing: "(1)  You must not issue tax invoices in respect of sub-contract work under the self-billing system.  You may still submit applications for payment on account, or invoices, but should you issue either, it must be endorsed 'THIS IS NOT A TAX INVOICE' and must not show any amount of VAT".  
26.	Mr. McCarthy was asked by Mr. Palmer, QC, for Hanson, how the endorsement came to be written on November 2001 invoices addressed to AAL/Stenoak from No. 205 onwards if Mr. McCarthy had not seen the self-billing details.   Although dated 5 November, 2001, it appears from the attached documents that Invoice No. 205 was probably issued soon after 18 November 2001.  Mr. McCarthy was wholly unable to give a plausible explanation, despite being given every opportunity to do so. These invoices were not produced by Mr. Webster, but probably by Mrs. McCarthy.  The only explanation in the evidence is that even if the contractual documents were not signed until January 2002, they were received in the ordinary course of posting in early November 2001, and were acted upon.
27.	I now turn to the invoices in detail.  Invoice No. 202 is dated 22 October, 2001.  It is addressed to Hanson Construction Projects for the attention of Mr. Elms.  It is in the sum of £18,949.72 plus VAT, which makes a total of £22,265.92.  This sum is attributable to the first three weeks' work according to the time sheets. The invoice is endorsed "Okay to pay.  Ian Elms".    The date, which has been hand-written, appears to have been altered or corrected.  It is either 26.10.01 or 26.11.01.  The hand-written note contains the direction to Mr. Webster and others to book the invoice to Hanson's account and then transfer it to Stenoak. The invoice has the Hanson stamp with the date of 3 December, 2001, indicating that it was paid on that date.  There is no reference to it not being a tax invoice, and it does have a figure for VAT.
28.	Since Hanson's copy of the invoice had attached to it the spreadsheets, including Weeks 4 and 5, i.e. week ending 5 November, it would appear from the documentary evidence that the correct date for the invoice is on or after 5 November, 2001, and not earlier as contended for by Mr. McCarthy.    This invoice, of course, refers to the initial work which, in due course, was the subject of a sub-contract order limited to £20,000, dated 10 December, 2001, drafted by Mr. Hobbs, under Mr. Elms' direction.
29.	There is no doubt that Invoice No. 202 was paid by Hanson, and Invoice Nos. 203 -220 were paid by AAL.  Invoice Nos. 221 - 230 were left unpaid by AAL.  From about 14 January, 2002 the invoices were prepared by Mr. Webster.  
30.	The contemporaneous documentary evidence shows that Mr. Webster well knew  that the contract was to be with AAL rather than Hanson.  As we have seen, on 5 November, 2001 Mr. Webster wrote the fax to Ms Keyhoe, "Please find sub-contract for J.P. Mac Ltd."  It may well be that the reason why Invoice AAL 203 does not include the words, 'THIS IS NOT A TAX INVOICE' was because Mr. McCarthy received the contract and the self-billing form after 5 November, i.e. the date of Invoice No. 203 and before 21/27 November, 2001, the date when Invoice No. 205 was sent.
31.	On 9 January, 2002, as Miss Harman confirmed in evidence, Mr. Webster sent her a fax on AAL headed notepaper, enclosing a list of sub-contractors to whom both draft sub-contracts and starter packs had been sent and had not been returned, signed.  They included J.P. Mac.  On 10 January, 2002 Miss Harman sent a fax to Mr. Webster, enclosing a new account pack as he had requested.  
32.	I find on the evidence therefore that Mr. Webster knew on 5 November, 2001 that the sub-contract for J.P. Mac was to be with AAL/Stenoak, except for the initial work.  His understanding was confirmed by the faxes in January 2002 to which I have just referred.  His conduct relating to Mr. McCarthy must be seen in this context.  
33.	I now consider Mr. McCarthy's evidence in the light of this documentary evidence.  Mr. McCarthy said in his statement that on about 22 October, 2001 J.P. Mac produced Invoice No. 202, addressed to Hanson.  He handed this to Mr. Webster.  He said that at some time during the week of 29 October, 2001 he asked Mr. Webster when he would be paying it.  He was told that Hanson was preparing a formal order and that he would be paid shortly.  
34.	He said that on about 5 November, 2001 he handed to Mr. Webster, on site, Invoice No. 203, addressed to Hanson. Mr. Webster told him Hanson was preparing a formal order and that payment would be made shortly.  Mr. McCarthy said that he also handed Mr. Webster Invoice No. 205, addressed to Hanson, on about 19 November, 2001.  It was dated, in error, 5 November, 2001, but related to work in the week ending 18 November, 2001.    Invoice No. 204, dated 21 November, 2001, addressed to Hanson, related to the Ivybridge A38 project, and was passed by Mr. Elms for payment on 26 November, 2001.  It included VAT.  It did not include the words 'THIS IS NOT A TAX INVOICE.
35.	Mr. McCarthy said in evidence that he was making constant inquiries of Mr. Webster as to why he was not being paid, and that towards the end of November 2001 he had a conversation with Mr. Webster who told him that while Invoice No. 202 had been processed for payment 'he would be paid a lot quicker if our invoice is directed to AAL'.  Mr. Webster said that this was because AAL would be receiving all of the payments from the Secretary of State for the works carried out on the M27 project, and that therefore it would be simpler and easier if all J.P. Mac's applications for payment were made direct to AAL.  If Mr. Webster did say this to Mr. McCarthy, he was acting contrary to his specific instructions, which were by then to ensure that J.P. Mac's sub-contract was with AAL/Stenoak, apart from the initial work.  I cannot see why he should have acted in such a way.  Mr. McCarthy went on to say that it did not matter to him who actually paid J.P. Mac, so long as J.P. Mac was paid. He said that he re-issued Invoice Nos. 203 and 205 in the name of AAL/Stenoak and handed them to Mr. Webster on site.  On about 5 December, 2001 he handed Invoice No. 206 to Mr. Webster.  By mistake it was addressed to Hanson, and when Mr. Webster pointed out the mistake, it was amended to be addressed to AAL. The AAL invoices (but not Hanson's) are endorsed by Mr. Webster 'Okay to pay'.  
36.	Mr. McCarthy was cross-examined about the invoices (after 202) which were addressed to Hanson on the basis that they came into existence after, and not before, the AAL invoices, and that they were manufactured later to give support to Mr. McCarthy's case. The Hanson invoices did not have written on them 'THIS IS NOT A TAX INVOICE'.  Mr. Webster would have known that for this reason alone, they would not have been paid.
37.	Having considered the forensic evidence which points clearly to the conclusion that the Hanson invoices were brought into existence later to add support to Mr. McCarthy's case, and the detailed submissions of both parties, I conclude that the Hanson invoices were produced later in order to attempt to bolster Mr. McCarthy's case.  On receipt of the first Hanson invoice, Mr. Webster would have known, and would have told Mr. McCarthy, that the invoicing would have to be with AAL and in accordance with its billing procedure, or on J.P. Mac's case that it would be simpler and easier if Mr. McCarthy billed AAL.  If Mr. McCarthy had queried the procedure, Mr. Webster would either have dealt with it himself, or referred the matter either to Mr. Rudman or to Mr. Elms or to Mr. Doyle.  It is likely on Mr. McCarthy's own evidence that this would not, in any event, have been necessary.  He said clearly that he did not mind with whom he contracted so long as he was paid.
38.	Even leaving aside all the forensic evidence, I found Mr. McCarthy's evidence on this aspect of the case, as on other aspects of the case, to be wholly unreliable and unsatisfactory.  
39.	The conclusion that Mr. McCarthy knew and acknowledged that his contract was with AAL and not Hanson received some further support from the evidence of Mr. Goodman. When cross-examined by Miss Ansell, he was firm in his evidence that on site he had heard Mr. McCarthy moaning about the fact that even after his work on the project had finished, he had not been paid by Stenoak/Associated Asphalt, and that he wanted to see Mr. Shires.  When pressed, Mr. Goodman was quite sure that Mr. McCarthy mentioned AAL/Stenoak.
40.	The Hanson invoices were produced later to support J.P. Mac's case.  I reject Mr. McCarthy's evidence in relation to these invoices.  I find that Mr. Webster knew by 5 November, 2001 that J.P. Mac's sub-contract was to be with AAL/Stenoak. I find that soon after, the documents for a sub-contract with AAL/Stenoak were sent to Mr. McCarthy. Either Mr. McCarthy received them or, less probably, as Mr. Webster told Mr. Flowerdew in a later conversation, he complained that although he knew that the paymaster was AAL and not Hanson, and that the contract would be with AAL and not Hanson, he had not received the contract document.  Mr. Webster did not say words to the effect that Mr. McCarthy would be paid a lot quicker if he invoiced Stenoak/AAL.
41.	I find also that Mr. McCarthy had no reason to object to having his contract with Stenoak, and agreed to do so.  I find that Mr. McCarthy did invoice AAL/Stenoak for work after Invoice No. 202. He could have only have known to put 'THIS IS NOT A TAX INVOICE' on the AAL/Stenoak invoices if he had read the self-billing instructions.  In the circumstances, this was an acknowledgement that he agreed that after the initial work, his contract would be with AAL/Stenoak and not Hanson.
42.	Having rejected Mr. McCarthy's explanation as to why he made the change in the billing arrangements (that it was “quicker and easier”) I conclude that the change was made because Mr. McCarthy agreed with Mr. Webster that his contract for work after the initial work would be with Stenoak/AAL.  This view is reinforced by the fact that he received the Hanson sub-contract in early December 2001 for work limited to £20,000, and made no objection to it.   
43.	I reach these conclusions without considering what, if any, inferences I should draw from the fact that neither Mrs. McCarthy, nor Mr. Webster gave evidence.  I can only conclude that their absence tends to reinforce the conclusions which I have already reached.
44.	I now deal with the evidence of what occurred subsequent to January 2002.  It is agreed that the invoices after January 2002 were prepared with the assistance of Mr. Webster and passed for payment. I note that on 22 February, 2002 one Irene Bailey produced a fax on Hanson notepaper with weekend contact numbers.  It listed Mr. McCarthy under Hanson Construction Products. I do not regard this as of any significance.  Mr. Doyle explained - and I accept - the document came from an outside source with no knowledge of the contractual relationship, and contained significant errors.  
45.	I note that the statement of accounts prepared by Mr. Webster as of 20 June, 2002 starts with Invoice No. 203.  It refers to Stenoak certificate numbers.  If this document shows anything, it tends to support the case that Invoice No. 202 was with a different contractor, i.e. Hanson, or, to put it another way, that invoices from No. 203 onwards were with the same contractor. Since Mr. Webster prepared the documents, it indicates that he knew this to be the case.
46.	In due course, Mr. Broughton, of Henry Cooper Consultants was consulted by Mr. McCarthy.  He wrote on 11 November, 2002, making a claim against Hanson for £164,816.59 plus VAT.  By a letter dated 27 November, 2002 Mr. Flowerdew, Hanson's solicitor, responded by saying that Mr. Elms agreed with Mr. McCarthy that some initial preparatory works would be done for Hanson, but that once the compound was completed and the job was running, further works would be carried out as sub-contractor to Associated Asphalt.   This response was not correct.  Mr. Doyle made it clear that at the initial meeting between him, Mr. Elms and Mr. McCarthy, this detail was not discussed.
47.	On 29 November, 2002 Mr. Broughton rejected Mr. Flowerdew's contention.  He said that Mr McCarthy was told that because of the joint venture arrangement between Stenoak and Hanson, it would be 'simpler and easier' if payment was made to J.P. Mac directly by AAL.  Mr. Flowerdew contacted Mr. Webster.  Mr. Flowerdew provided the Court with contemporaneous notes of his conversations with Mr. Webster, and with a statement which Mr. Webster was not, in the event, prepared to sign.  Mr. Flowerdew gave evidence himself and subjected himself to cross-examination.   I accept his evidence.
48.	On 14 January, 2003, Mr. Flowerdew made two telephone calls to Mr. Webster.  Mr. Webster said: (1) that he would have given J.P. Mac the AAL self-billing forms and got him to sign them, and he would then have sent them with the sub-contract order form to AAL's head office at Henley.  In relation to the suggestion that Mr. Webster told Mr. McCarthy that it would be 'simpler and easier' if payment was made to J.P. Mac direct to AAL, Mr. Flowerdew's note is as follows: 
"Re. Broughton letter of 29-11.
I would not have told Mac that the new arrangements were to make payment easier - I knew that his (Hanson) work was over and his sub work was for AAL.
AAL did not pay Hanson bills to make it easier - Hanson paid Hanson bills.  AAL paid  AAL bills.  Forms were because future work was on civils side, not the black."
   This account would support the conclusions which I have already reached.
49.	On 13 March, 2003 Mr. Flowerdew again contacted Mr. Webster.  In the course of this telephone conversation, Mr. Flowerdew's note included the following:  
"I knew paymaster was AAL - as he did.  I gave him the pack for the sub-contractor.  McCarthy said that he hadn't had the sub-contract doc, so RW rang Henley and asked if sent - they said 'Yes'.  I said he hadn't had it; could they send another.  They said they had.  JPM said he didn't get that either.  He was expecting a sub-con form from AAL.  I  'phoned four or five sub‑contractors and asked if they'd been sent sub-con form, and they said they hadn't (Henley said they'd been sent)".
50.	On 17 March, 2003 Mr. Flowerdew sent Mr. Webster a draft statement.  On 28 March, 2003 Mr. Webster wrote to Mr. Flowerdew contradicting some matters in the draft statement, and concluding that he was not prepared to be involved in the dispute.  In his oral evidence Mr. Flowerdew made it clear that his letter was contradicting directly something which he had been at pains to explain and to explore fairly with Mr. Webster on the telephone. I accept Mr. Flowerdew's evidence on this.
51.	Much of the remaining evidence relates to the computer investigation of the 'Hanson invoices' (after No. 202). There was a certain amount of fencing on behalf of J.P. Mac as to how they were created.  By a letter dated 11 December, 2003 J.P. Mac's solicitors said that the invoices were not on the hard drive of Mr. McCarthy's computer as the invoices were created on a CD-rom and that the relevant invoices were saved over with later invoices.
52.	On 5 February, 2004 the CD-rom was received from Mr. McCarthy by Henry Cooper Consultants.  It was received by Fenwick Elliott on 9 February, 2004.  The response to the request for further information provided on J.P. Mac's behalf in writing on 10 June, 2004 was not very satisfactory.  It was thought that Mrs. McCarthy had prepared the relevant invoices, but she could not remember doing so. They were created on the CD-RW using a computer.  
53.	The experts' evidence was agreed in the course of the trial. The CD-RW was created on 19 December, 2003.  The weekly labour costs on the CD-R were created by a computer on 18 February, 2003 when the Excel software was licensed to Mr. Webster.   The hard copy of Invoice Nos. 202, 203, 205, and 206 use the same fonts, but have different fonts to the later invoices. This applies both to the Hanson and AAL versions.  Any computer on which Invoice Nos. 202, 203, 205, 206, or 207 were created would need to have the correct font specially installed. They were not in a standard font. This finding confirms the evidence that the later invoices were compiled by Mr. Webster.  The experts agreed that it would be a fairly easy task for someone with relatively basic computer knowledge to alter a computer's clock to ensure that creation, modified, and printed dates were synchronised.
54.	In relation to Mrs. McCarthy's computer, there is no evidence that any invoice addressed to Hanson, or relating to AAL or the M27, or a copy of such invoice ever existed on her computer. Mr. McCarthy was J.P. Mac's only witness and he, of course, was unable to give any explanation or evidence in relation to the computer evidence.
        CONCLUSION
55.	In summary, I find that J.P. Mac's Invoice No. 202, relating to M27 works, was issued not before 5 November, 2001.  It was paid by Hanson.  Invoice Nos. 203, 205, 206, and 207, sent to AAL, were in sequence the next invoices issued by J.P. Mac on the M27 project.  The Invoice Nos. 205, 206, and 207 were endorsed 'THIS IS NOT A TAX INVOICE'.  Invoice No. 205, dated 5 November, 2001, was issued on or after 19 November, 2001, probably after 21 November, 2001.  Invoices purporting to be addressed to Hanson (other than Invoice No 202) came into existence at a later date.  
56.	On 5 November, 2001 Mr. Webster knew that apart from initial work, J.P. Mac's sub-contract was to be with AAL/Stenoak, and be in accordance with AAL/Stenoak's sub-contract and billing procedure.  
57.	On the balance of probabilities, Mr. McCarthy received the sub-contract pack soon before he issued Invoice No. 205.  This is why he was able to endorse that invoice 'THIS IS NOT A TAX INVOICE' on the AAL invoice.  
58.	I reject Mr. McCarthy's evidence that he was told by Mr. Webster towards the end of November 2001 that he would be paid a lot quicker (“simpler and easier”) if he invoiced AAL direct.  By this time he had almost certainly received the sub-contract pack. He certainly had agreed with Mr. Webster that apart from the initial work to the value of £20,000, his contract was to be with, and he was to be paid by, AAL.  As he himself said, he did not mind provided he was paid.   In November 2001 there was no suggestion that he would not be paid by Stenoak.
59.	As Mr. Webster indicated to Mr. Flowerdew, Mr. Webster did not say that it would make payment easier if Mr. McCarthy invoiced AAL.  
60.	If I was deciding this case only on the burden of proof, I remind myself that the burden of proof is on Mr. McCarthy to prove his claim on the balance of probabilities.  Having been wholly unimpressed with the truthfulness of his evidence, and having reviewed the evidence without Mr. Flowerdew's conversation with Mr. Webster, I should have reached the conclusion that J.P. Mac's claim should fail.  Putting it another way, I only take account of the hearsay evidence relating to Mr. Webster given by Mr. Flowerdew insofar as it supports my conclusions on the existing evidence.
61.	In all the circumstances in this case I find for the Defendant.