"All works to be in accordance with relevant British Standards specifications, codes of practice and engineers' specifications. All works to be in accordance with the Building (Scotland) Regulations 1990 and amendments."

On the right hand side of the drawing there is a provision that the external walls should have a 50X50mm cavity barrier.

[38] All of these matters, and other matters referred to in the notes on the drawing are express terms of the contract which the defenders required to comply with. Compliance with the British Standards specifications, codes of practice and Buildings (Scotland) Regulations were not in this contract implied conditions or part of the general implied condition relating to the competence of the contractor of ordinary skill.

[39] So far as the detailed schedule of works (production 5/1/2) is concerned, this is agreed to be a contract document, but its exact effect is not specifically agreed. I do not consider that this document sets out what was contractually agreed between the parties to be the detailed works to be carried out. It is not a Bill of Quantities in the normal sense, where such a Bill is produced on behalf of the employer and provided to the contractor with a view to (a) defining exactly the works which the employer requires to be carried out and (b) requesting prices in accordance with the Bills. Production 5/1/2 was produced by the defenders some considerable time after the defenders had submitted their written quotation of 18 April 2006 to the pursuers and the pursuers' had accepted that offer on or about 20 April with a condition that the works would take 16 weeks. The schedule of works is what the defender has unilaterally produced after the formation of the contract to show how he has made up his price, and was doubtless useful for invoicing purposes. It takes into account certain modifications relating to the use of existing windows to bring about a reduction of the price, but it is not truly in my opinion a contractual document in the sense of setting out the detailed work which the employers wanted carried out. The work which the employers wanted carried out remained broadly the work which was set out in the plan 001/05.

[40] So far as the time for execution of the works is concerned I am satisfied that from the evidence of Mr and Mrs Ross and in particular the evidence of Mrs Ross that she had a specific requirement that the works be completed within 16 weeks. She said that she had asked Mr Johnston how long the works would take, that he had told her 16 weeks and she had then made that period of time the period of time within which she wanted the contract to be carried out, and that Mr Johnston had accepted this. There was no contrary evidence from Mr Johnston. Mr Ross did talk about the time for the contract being "around 16 weeks" but I am satisfied that Mrs Ross's recollection is to be preferred. She had good reasons for wanting to fix the length of time of the works so that the house could thereafter be decorated and got ready for a family Christmas. The defenders were aware of this.

[41] When Mrs Ross required the defenders to leave the site, 15 of the 16 weeks had been used and at least a further ten would be required to finish the work which would have taken it to 31^st December. Accordingly by 26 October there was no prospect of the building works being finished in time for Mrs Ross to have the house decorated and ready for the family coming for Christmas. In these circumstances, while normally an ultimatum might be required, as counsel for the defenders suggested, to justify rescission on the basis of time alone, I do not consider that an ultimatum is necessary in circumstances where the works simply could not be concluded anywhere close to the contractually permitted period, and could not be realistically completed in time for the event which had caused the pursuer to set the contractual period. Accordingly, had this been the only breach of contract on the part of the defenders I might well have been satisfied on the evidence which I heard that the defenders were entitled to terminate the contract by reason of this breach alone.

[42] The remaining breaches which I have found to be established by the evidence are either breaches of express terms of the contract and breaches of implied terms. Some of them clearly are more serious than others. For example, the erection of roof trusses which were not in accordance with the drawings would have meant that, without rectification a completion certificate would not have been issued. This represents a material breach of the contractual obligation and, on the face of it, a simple disregard of the requirement contained in the drawing. Similarly the problem with cavity barriers represents a clear and material deviation from the contract drawing.

[43] It was a matter of admission by the defenders that it was an implied term of the contract that in providing building services the defenders would use the skill and care reasonably to be expected of building contractors of ordinary competence. I consider that work in conformity with a code of practice specified on drawing 001/05 is an express term of the contract in accordance with the notes to which I have referred. Either way failure to comply with the code is a breach of contract and in the circumstances narrated by Mr Moir a material breach of conduct. The loose fitting of the Celotex insulation is an example of work not being carried out with the skill and competence reasonably to be expected of a building contractor of ordinary competence. It would not be a difficult matter to cut and friction fit a panel of rigid expanded foam to a timber frame. Failure to so amounts to a material breach of the implied condition. The failure to protect those cavity barriers which were fitted with a separate dry proof course is either a breach of building standards, and therefore breach of an express term covered by the general notes, or it is a failure to carry out work to the implied standard of skill and competence. The building of a window aperture in such a way that the block or brickwork is narrower than the window frame is a clear example of a lack of ordinary skill and competence, as is the failure to use appropriately spaced screws or nails in the fixing of the plasterboard. This, it seems to me would be a very simple matter and the failure to comply with it must be seen, in the absence of an explanation from the defenders, to be down to a simple lack of care or ability.

[44] I do not consider that the Schedule of Works contained in No 5/1/2 of process this contains a prescriptive statement of the number of visits to be made to the site to remove debris, but rather that it is a simple estimate of the number of skips which the defenders thought would be needed to remove an estimated quantity of rubble etc. My own interpretation of what it means, in the absence of evidence from the person who produced it, is that a total of 28 cubic metres of debris etc. would need to be removed at a price of £ 24.92 per cubic metre, giving a total price of £697.76. Each skipload would take 4.5 cubic metres, a total of over 6 loads, requiring 7 skips. Whether this is an express condition of the contract or whether it is part of the general duty of ordinary care and competence in respect of leaving the site safe and tidy, and clearing away debris from time to time, does not really matter. The defenders only once provided a skip and thereafter rejected both Mr and Mrs Ross's repeated requests to remove the waste materials. There was a clear breach by the defenders, and their attitude that this was a matter for the pursuers to arrange, pay for and implement, indicates that it was a breach which they were not prepared to remedy. In my view this was a material breach, given that the pursuers were continuing to live on site, and it was a breach which by itself might have justified recission on the part of the pursuers. In addition to this there is the excavation to the new kitchen floor where the wall was to be built in the garage where no steps had been taken to render this area safe, and in addition to the foregoing is the general lack of contract management skills being applied to taking down the pre-existing rear wall and the erection of the extension including the walls, windows etc, and the need to do this in a way to protect the existing living space of the pursuers. These were all matters which were known to the pursuers at the time of the rescission of the contract. In my opinion taken together these matters constituted a material breach of contract by the defenders which justified recission on the part of the pursuers. So far as the clearance of the site outside was concerned, this was not something which could be remedied as they had already declined to do anything about it. So far as the dust and stoor and general mess occasioned by the way in which the defenders took down the rear wall and built the extension without protecting the pre-existing living space it is possible that this could have been put right, but there is no evidence that the defender ever intended to do that, other than through the final completion of the works. Looked at together these matters are indicative of a contractor who was falling far below the levels of skill and competence to be expected.

[45] Many of the matters I have referred to however were matters of which the pursuers were not aware at the time when they rescinded the contract and the question arises as to whether they are entitled to take account of those matters of which they were aware at the time as justifying or supporting in retrospect their decision to rescind the contract.

[46] Mr McNeil, counsel for the defenders submitted that the pursuers could not take them into account. He referred to the report of the Scottish Law Commission on Remedies for Breach of Contract dated 6 December 1999 and in particular Part 4 thereof. In paragraph 4.6, dealing with the question of intimation of rescission to the party in breach, the Commission invited views on the proposition that "it should be made clear that rescission is effected by intimation to the party in breach". In doing this they stressed that the important point is that "the decision to respond to the repudiation or breach by bringing the contract substantially to an end should be communicated to the other party". He submitted that rescission of a contract was effectively an acceptance of the repudiation or breach of contract by the other party, and that one could only accept what one was aware of. That is of course a summary of a longer and deeper submission. It has a logical attraction to it, but Mrs Hunter, the solicitor for the pursuers, dealt with it by reference to authority. The first authority was the Opinion a first instance of Devlin J in the case Universal Cargo v Citati. [1957] 2QB 401. The opinions of Lord Devlin are always going to attract great respect. What he said at page 443 was:-

"In that event can the rescinder having rescinded for the wrong reason, perhaps because he misinterpreted the conduct of the other side, justify his action by relying on the facts which come to his knowledge thereafter and with the aid of which he can prove inability. It is now well settled that a rescission or repudiation if given for a wrong reason or for no reason at all can be supported if there were at the time [my emphasis] facts in existence which would have provided a good reason".

In the Scottish case Lamarra v Capital Bank Plc 2006 SLT 1053 the Opinion of the Court was delivered by Lord Osborne. Having quoted the paragraph from Devlin J the Opinion of the Court continues at para. [77]:-

"With that Opinion we would respectfully agree. Thus it seems to us that the absence of a reference in the letter of 30 March 2001 to some particular defect upon which the respondent now seeks to found possesses no particular significance other than, perhaps, affording to the appellants the opportunity to comment on the absence of such reference in the context of any consideration of the respondents' evidence. So, in our view, the question arising is whether, on the evidence available to him, the Sheriff Principal was entitled to take the view he did regardless of the contents of the letter."

[47] Mrs Hunter referred also to the case of Owen v Fotheringham 1997 SLT (Sh Ct) 28. In that case the pursuers had contended that when the defenders stated a specific ground for holding the contract to be at an end they could not, many months later, advance other grounds, and that as in that case the entire defence to the action was based on grounds for rescission other than those initially stated by the defenders as their reason for holding the contract to be at an end the defence and the merits should be dismissed. Sheriff Paterson held that the defenders are not precluded by the position they took up initially from departing from that position and founding on other relevant matters as grounds for rescilling from the contract. He considered that the important matter was that in the case the pursuer could not have been in any doubt that as from 9 December 1993 the defenders considered that they were no longer bound by the contract, and that that was all the notice that the defenders had to give.

[48] In the case of Glencore Grain Rotterdam v Lebanese Organisation for International Commerce 1997 SLT 2 Lloyd's Reports 386 at 394-395 Lord Justice Evans said:

"It is a long established rule of law that a contracting party who, after he has become entitled to refuse performance of his contractual obligations gives a wrong reason for his refusal does not thereby deprive himself of a justification which in fact existed, whether he was aware of it or not. .... the rule is however subject to a proviso. If the point not taken is one which if taken could have been put right, the principle will not apply."

[49] In all of the circumstances I am satisfied that the pursuers are entitled to rely on the various defects which came to light after the date of the rescission, but subject to the proviso as to whether these defects could have been put right.

[50] This leads to Mr McNeill's submission on the right to cure. Mrs Hunter did not dispute the exixtence of such a right in appropriate circumstances, her point was, both in her first written submissions and in her response to Mr McNeill's submissions, that there was no evidence from the defenders that they would have done anything to cure the defects, indeed it was no part of the defenders' case as pled that they would have been willing to cure the defects in their workmanship. They do not accept in their pleadings that there were such defects. They offered to complete the works but were not permitted to do so. The remedial work which they refer to in their pleadings refers to the need to correct works carried out by others previously on the property. For example, so far as cavity barriers were concerned the defenders say in their pleadings that they intended to install the front door cavity barrier at a later stage, but aver that all other cavity barriers had been installed. They aver that one of the three rear walls was off plumb, but do not say that they intended to repair or fix that. They say, in respect of the materials in the garden, that these would have been removed at the end of the contract, and had left some of the material for use. The evidence from Mr Moir was that it would be inappropriate to use the material which had been left. Whatever the defenders position on record they led no evidence in support of it.

[51] I accept the pursuer's position that there is no basis on which it could be said that the defenders intended to carry out remedial works in respect of any of the defects which were found by Mr Moir.

[52] Mr Moir is a highly experienced building surveyor. His conclusion in respect of the totality of the work which he found when he visited the pursuer's home, and which represented the state of the works when the pursuers instructed the defenders not to return to the site, was that he did not think the defenders were capable of completing the works to a satisfactory standard, on the basis of the standard of work which he could see on the site at the time of his visit. He himself would, in his words "have had difficulties continuing with them" i.e. the defenders. This inability of the defenders to meet acceptable building standards being inherent would not have been immediately capable of being put right.

[53] Mr McNeill referred to Macari v CelticFootball & Athletic Club 1999 SC 628. He submitted that there were breaches of contract and material breaches of contract, and within the concept of material breaches of contract there were those which justified rescission, and those which did not. He submitted that any breaches which might be established in respect of the defenders' work fell within the category of breaches which would not warrant rescission.

[54] Mrs Hunter for her for part accepted that there were different levels of breach and of materiality of breach but submitted that viewing the breaches collectively or individually there were ample grounds for the pursuers to rescind the contract.

[55] I accept that there were a number of breaches of contract which could be considered material, and sufficiently material to warrant rescission of the contract. These would include the refusal by the defenders to carry out the works within the house in a clean and tidy manner in the circumstances which pertained here namely that the works were to be carried out while the pursuers continued to reside in the premises. I consider that the failure to erect the roof trusses in accordance with the approved drawings was a material breach of contract which would have resulted in the pursuers being unable to obtain a completion certificate. I consider that the failure to adequately fix the windows which had been relocated to the rear wall of the new extension, and which inadequacy would not have been discovered had the works not been interrupted and the defenders' contract terminated would constitute such a breach. Similar considerations would apply in respect of the cavity barriers and the block work round the window apertures. The unprotected trench which the defenders excavated in order to place the foundations for the block partition between the kitchen and the garage constituted a serious health and safety hazard and in itself too might have amounted to a material breach of contract warranting rescission of the contract.

[56] Some of the works might have been capable of being remedied, and a decision to rescind may have had to have been delayed if the defenders had offered to carry out remedial works. Their position however, on record, and there was no evidence to any different effect, was that they considered their work to be acceptable.

[57] The defenders were under an admitted duty to carry out the work using the skill and care reasonably to be expected of building contractors of ordinary competence. Similarly it was an admitted term of the contract that the defenders would carry out the works in accordance with the principal contract drawing which required the works to be executed in accordance with Building Regulations, Codes of Practice etc. In respect of both the express terms and the implied terms of the pursuer say at the end of Condescendence 5 and 6:-

"Each and all of said failures to carry out the work in accordance with the express (Condescendence 5) or implied (Condescendence 5) terms of the contract between the parties amounted to a material breach of contract by the defenders."

In my opinion the cumulative effect of the various breaches of contract by the defenders amounted to a material breach of contract of such magnitude that the pursuers could not reasonably be expected to allow the defenders to carry out any further work on their property.

[58] So far as the defenders' counterclaim is concerned the first crave, for £8,975.64, is founded upon an alleged breach of contract by the pursuers in denying the defenders access to the premises to undertake and complete the contract works. The loss on this head amounting to £5,755.64, together with claims for £1,820, £1,000 and £400 for being denied access to the works respectively between 10 and 18 September, for one week from 25 September, and for 12 and 13 October, all 2006.

[59] The second sum counterclaimed by the defenders is the sum of £3,383.65 which relates to works carried out by the defenders on the contract before termination of the contract, but which the pursuers say were defective works.

[60] So far as the first of these matters is concerned, for the reasons which I have set out above I do not consider that the pursuers were in material breach of contract in respect of the access which the defenders were given to the site. In my opinion when works are being carried out on a dwelling house by a building contractor in circumstances where the occupiers of the dwelling house are to continue in residence throughout the execution of the works, these works have to be both programmed and executed in a way which reasonably takes into account the requirements of the occupiers to live in the house with a degree of reasonable comfort. The only evidence I heard on this point was the evidence of the pursuers who found that the scheduling of the works, relating to the kitchen, and the quality of the work in terms of the dust and stoor generally created by the works in the pursuers' living area were such that it was not reasonable to expect them to accept. I prefer the evidence of the pursuers as to the length of time that the defender was unable to work on the kitchen. There was no evidence from the defenders to the effect that there was no other work under the contract which would have been carried out, and indeed it is clear from the evidence of Mr Moir that there were significant areas of work where the defender could either have been progressing the works or, if he had accepted that there were defects, remedying or at least attempting to remedy some of these defects.

[61] So far as the defenders' second crave is concerned, which refers to the defenders' invoices Nos. 123 and 124, I accept that there were defects in respect of at least some of this work, but the defenders may be entitled to payment of the works which they have carried out to the extent that they were not defective. So far as they were defective and capable of being remedied, the defenders may be entitled to payment for the value of the work they have carried out under deduction of the cost of remedials. These matters will require to be decided at proof.

[62] I will accordingly put the case out for a procedural hearing in terms of Rule 40.14 to determine the order which I should make having regard to the findings I have made in this judgment, and also to discuss further procedure in respect of the case.

[63] That hearing will take place in Aberdeen Sheriff Court at 10 am on 29 August 2008.

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Ross & Anor v. Johnston, Joiner And Builders Ltd [2008] ScotCS CA_12 (08 August 2008) URL: http://www.bailii.org/scot/cases/ScotCS/2008/CA_12.html Cite as: [2008] ScotCS CA_12

Scottish Court of Session Decisions

MR ALAN ROSS and MRS PATRICIA ALISON ROSS