Williams v Roffey Bros & Nicholls (Contractors) Ltd
|England & Wales
|LORD JUSTICE GLIDEWELL,LORD JUSTICE RUSSELL,LORD JUSTICE PURCHAS
|23 November 1989
|Judgment citation (vLex)
| EWCA Civ J1123-4
|Court of Appeal (Civil Division)
|23 November 1989
 EWCA Civ J1123-4
Lord Justice Purchas
Lord Justice Glidewell
Lord Justice Russell
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE KINGSTON-UPON-THAMES COUNTY COURT
MR. ASSISTANT RECORDER RUPERT JACKSON Q.C.
Royal Courts of Justice
MR. FRANKLIN EVANS (instructed by Messrs John Pearson & Co) appeared on behalf of the Appellants (Defendants).
MR. MR. CHRISTOPHER MAKEY (instructed by Messrs Terrence W. Lynch & Co.) appeared on behalf of the Respondent (Plaintiff).
This is an appeal against the decision of Mr. Rupert Jackson Q.C., an assistant recorder, given on 31st January 1989 at Kingston-upon-Thames County Court, entering judgment for the plaintiff for £3,500 damages with £1,400 interest and costs and dismissing the defendants' counterclaim.
The plaintiff is a carpenter. The defendants are building contractors who in September 1985 had entered into a contract with Shepherds Bush Housing Association Ltd. to refurbish a block of flats called Twynholm Mansions, Lillie Road, London S.W.6. The defendants were the main contractors for the works. There are 28 flats in Twynholm Mansions, but the work of refurbishment was to be carried out in 27 of the flats.
The defendants engaged the plaintiff to carry out the carpentry work in the refurbishment of the 27 flats, including work to the structure of the roof. Originally the plaintiff was engaged on three separate sub-contracts, but these were all superseded by a sub-contract in writing made on 21st January 1986 by which the plaintiff undertook to provide the labour for the carpentry work to the roof of the block and for the first and second fix carpentry work required in each of the 27 flats for a total price of £20,000.
The judge found that, though there was no express term providing for payment to be made in stages, the contract of 21st January 1986 was subject to an implied term that the defendants would make interim payments to the plaintiff, related to the amount of work done, at reasonable intervals.
The plaintiff and his men began work on 10th October 1985. The judge found that by 9th April 1986 the plaintiff had completed the work to the roof, had carried out the first fix to all 27 flats, and had substantially completed the second fix to 9 flats. By this date the defendants had made interim payments totalling £16,200.
It is common ground that by the end of March 1986 the plaintiff was in financial difficulty. The judge found that there were two reasons for this, namely:
(i) That the agreed price of £20,000 was too low to enable the plaintiff to operate satisfactorily and at a profit. Mr. Cottrell, a Surveyor employed by the defendants said in evidence that a reasonable price for the works would have been £23,783.
(ii) That the plaintiff failed to supervise his workmen adequately.
The defendants, as they made clear, were concerned lest the plaintiff did not complete the carpentry work on time. The main contract contained a penalty clause. The judge found that on 9th April 1986 the defendants promised to pay the plaintiff the further sum of £10,300, in addition to the £20,000, to be paid at the rate of £575 for each flat in which the carpentry work was completed.
The plaintiff and his men continued work on the flats until the end of May 1986. By that date the defendants, after their promise on 9th April 1986, had made only one further payment of £1,500. At the end of May the plaintiff ceased work on the flats. I will describe later the work which, according to the judge's findings, then remained to be done. Suffice it to say that the defendants engaged other carpenters to complete the work, but in the result incurred one week's time penalty in their contract with the building owners.
The plaintiff commenced this action by specially endorsed writ on 10th May 1987. He originally claimed the sum of £32,708.70. In a re-amended statement of claim served on 3rd March 1986 his claim was reduced to £10,847.07. It was, I think, at about this time that the matter was transferred to the county court.
It is not necessary to refer to the statement of claim. On every important issue on which the plaintiff's case differed from that of the defendants, the judge found that the plaintiff was mistaken, and preferred the evidence for the defendants. In particular, the plaintiff denied the defendants' promise of 9th April 1986 to pay him an additional £10,300, instead alleging an earlier and different agreement which the judge found had not been made.
In the amended defence the defendants' promise to pay an additional £10,300 was pleaded as part of paragraph 5 in the following terms:
"…In or about the month of May 1986 at a meeting at the offices of the defendants between Mr. Hooper and the plaintiff on the one hand and Mr. Cottrell and Mr. Roffey on the other it was agreed that the defendants would pay the plaintiff an extra £10,300 over and above the contract sum of £20,000. 9 flats had been first and second fixed completely at the date of this meeting and there were 18 flats left that had been first fixed but on which the second fixing had not been completed. The sum of £10,300 was to be paid at a rate of £575 per flat to be paid on the completion of each flat".
The defence then alleged that neither the balance of the original contract sum nor the £10,300 addition was payable until the work was completed, that the plaintiff did not complete the work before he left the site, and thus that no further sum was due to him. By their amended counterclaim the defendants claimed that the plaintiff was in breach of contract in ceasing work at the end of May 1986, as a result of which they had suffered damage to the extent of £18,121.46.
The judge's conclusions
The judge found that the defendants' promise to pay an additional £10,300, at the rate of £575 per completed flat, was part of an oral agreement made between the plaintiff and the defendants on 9th April 1986, by way of variation to the original contract.
The judge also found that before the plaintiff ceased work at the end of May 1986 the carpentry in 17 flats had been substantially (but not totally) completed. This means that between the making of the agreement on 9th April 1986 and the date when the plaintiff ceased work, eight further flats were substantially completed.
The judge calculated that this entitled the plaintiff to receive £4,600 (8 x £575) "less some small deduction for defective and incomplete items". He held that the plaintiff was also entitled to a reasonable proportion of the £2,200 which was outstanding from the original contract sum. (I believe this figure should be £2,300, but this makes no practical difference) Adding these two amounts, he decided that the plaintiff was entitled to further payments totalling £5,000 against which he had only received £1,500, and that the defendants were therefore in breach of contract, entitling the plaintiff to cease work.
Before us Mr. Evans for the defendants advances two arguments. His principal submission is that the defendants' admitted promise to pay an additional £10,300, at the rate of £575 per completed flat, is unenforceable since there was no consideration for it. This issue was not raised in the defence, but we are told that the argument was advanced at the trial without objection, and that there was equally no objection to it being argued before us.
Mr. Evans' secondary argument is that the additional payment was only payable as each flat was completed. On the judge's findings, 8 further flats had been "substantially" completed. Substantial completion was something less than completion. Thus none of the 8 flats had been completed, and no further payment was yet due from the defendants. I will deal with this subsidiary argument first. Does substantial completion entitle the plaintiff to payment?
The agreement which the judge found was made between the parties on 9th April 1986 provided for payment as follows:
"The sum of £10,300 was to be paid at the rate of £575 per flat to be paid on the completion of each flat".
Mr. Evans argues that the agreement provided for payment on completion, not on substantial completion, of each flat. Since the judge did not find that the work in any additional flat was completed after 9th April 1986, the defendants were under no obligation to pay any part of the £10,300 before the plaintiff ceased work at the end of May.
In his judgment the judge does not explain why in his view substantial completion entitled the plaintiff to payment. In support of the judgment on this issue, however, Mr. Makey for the plaintiff, refers us to the decision of this court in . In that case the plaintiff was engaged to decorate and furnish the defendant's flat for £750, to be paid "net cash, as the work proceeds, and balance on completion". The defendant paid £400, moved into the flat and used the new furniture, but refused to pay the balance on the ground that some of the work was defective. The official referee found that there were some defects, but that the contract had been substantially performed. The Court of Appeal held that accordingly the plaintiff was entitled to be paid the balance due, less only a deduction for the cost of making good the defects or omissions.
Somervell L.J. said at page 179G:
"The learned official referee regarded ... as laying down that the price must be paid subject to the set-off
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