Scottish Sheriff Court Decisions

Act. Summers: Alt. Lane

The Sheriff having resumed consideration of the Pursuer's motion No. 7/1 of Process, Grants decree against the First and Second Defenders, jointly and severally, for payment to the Pursuer of the total sum of £17,373.22, being £11,917.77 in terms of Crave 1 and £5455.45 in terms of Crave 2, with interest on these sums at the rate of eight per cent per annum (8%) from the date of citation until payment: Reserves meantime all question of expenses.

Note.

I was greatly assisted by the clear and helpful submissions made by both solicitors.

The Pursuer is a building contractor. It is agreed that in 2002, the third and fourth Defenders asked the Pursuer to provide an estimate for the cost of converting part of a steading into a 5-apartment dwelling house with offices and a garage. That estimate is No. 5/1/4 of Process. The Pursuer's quotation was accepted. The first and second Defenders were to be owners and occupiers of the completed steading. The third and fourth Defenders are the parents of the second Defender. The price quoted for the conversion was £111,528.85. The Pursuer was to produce the necessary to drawings and apply for planning permission and building warrants. The Pursuer's quotation was "for all trades, except painter, to form dwelling house as shown on plans prepared by myself and to the satisfaction of the Building Control Department."

Mr Summers indicated that the motion for summary decree was being made on the pleadings as they are now and as they stood at the time of lodging the motion.

In terms of a verbal contract, the Pursuer undertook the agreed work. During the course of the work, a payment to account of £97,458.85 was made by the first and second Defenders to the Pursuer. In or about May 2004, the Pursuer issued to the first and second Defenders an invoice for the balance due under the contract, viz:- £14,070.00. That amount remains outstanding, and is the sum sued for in the first crave. During the course of the work, the first and second Defenders requested the Pursuer to carry out additional work. He agreed to do that and the cost was £6687.45, the sum sued for in Crave 2 and Crave 3 for £7631 represents the cost of the plans. The Pursuer's motion was for summary decree in respect of Craves 1 and 2, in a total sum of £17,373.22.

The first and second Defenders had moved into the property in August 2003, and the Pursuer had given them a nine months' "defects guarantee". He had submitted an invoice in May 2004, which had been outstanding for a period of 7 months prior to the raising of action. In terms of Answers 2 and 3 of the Record (No. 13 of Process), the Defenders accept that the full price of the contract was £111,528.85 and that they had made a payment to account, leaving the balance, the sum sued for in Crave 1.

However, Mr Summers submitted that what they say in their defences (Answer 3 on pages 5 and 6), viz:- that the Pursuer is in material breach of contract, is a non sequitur.

To assist with his submissions, Mr Summers produced a document headed "Calculation of Minimum Amount Due" showing (i) the amount in the first crave of £14,070, less various deductions amounting to £5304.24 leaving a net figure of £8765.76; and (ii) the amount in the second crave of £6687.45 less various deductions amounting to £1232.00 leaving a net figure of £5455.45.

He proceeded firstly on the assumption that the Defenders receive full credit for the amounts deducted from each of the sums in Craves 1 and 2. In that connection, he referred to Production No 6/1/2 of Process, which is a schedule of works outstanding at 9 October 2004 and Production 6/1/3 an estimate dated 16 September 2004 produced by J Y Contracts showing how the proposed deduction of £3152.01 is calculated. That is dealt with in Statement in Fact 2 in the counterclaim. It is also averred in Answer 4 in the principal action that the Pursuer has overcharged and the sum of £1232 would give the defenders credit for that.

Assuming that the Defenders are given full credit, then in terms of Crave 1, one would deduct (under 1.1, 1.2, 1.3 and 1.4. of the Calculation) the sum of £5304.24 leaving a balance of 8765.76 in terms of that crave, and making the same allowance under 2.1 of the Calculation, that would leave £5455.45 in terms of Crave 2. Adding the net figures for Craves 1 and 2 would make a total of £14221.21. Mr Summers submitted that that sum, ought to have been paid in May when the action was raised and certainly at the time that the motion that was intimated. The motion for summary decree should not have been opposed.

However Mr Summers submitted that the Pursuer's position was better than that, because one should not deduct and hence should add back the sum of £3152.01 in 1.1 of the Calculation, a figure referred to in Answer 3 and Statement in Fact 2. He referred to the Defenders' pleadings. They say in Answer 3 that the plans, which the Pursuer drew up, had to meet with the approval of the Building Control Department, and that it was an express term of the contract that that would be the case. The Defenders' position is that some work was done, but some was not. However, it is clear from the productions that the plans did conform with the requirements of the Building Control Department. David Birtwhistle of the Aberdeenshire Council, Building Control Department, had inspected the building. In a letter dated 9 October 2003, to the Pursuer, he had pointed out a number of matters which required attention. (see No. 6/1/1 of Process). Following upon a re-inspection, a Completion Certificate had been issued (No. 5/1/7 of Process) Accordingly, the Pursuer was entitled to add back the sum of £3152.01. If that were done, the total due under Crave 1 becomes £11,917.77. Adding that to the sum in the second crave with the deduction, i.e. £5455.45 that left a total of £17,373.22. The Pursuer was therefore entitled to summary decree for that sum.

Ms Lane for the Defenders accepted and that if I were not have persuaded in relation to the structural engineers' report to which she would refer, I would be entitled to grant summary decree under Crave 1 for £8765.76 and under Crave 2 for £5455.45 a total of £14,220.21. She submitted that I should not add back the £3152.01.

Although Mr Summers for the Pursuer had referred to a 9 months' "defects guarantee," there are no averments supporting that. Furthermore, the Pursuer was founding upon the issuing of the Completion Certificate, but that was not conclusive in relation to the contract, and it was clear from the Defenders' pleadings that there were defects. In that connection, she referred to Keating on Building Contracts. (7th ed. para. 10.28) That passage refers to the period of limitation under English Law for a contract such as this and she submitted that the corresponding period under the law of prescription was 5 years, calculated from the date of the cause of action.

The Defenders' Answer 3 on page 5 of the Record states that the Pursuer has not completed certain work contracted for. Both the Building Warrant (No. 5/1/5 of Process) and the Certificate of Completion (No. 5/1/7 of Process) make it clear at the foot that the issuing of the latter is not a guarantee of the standard of workmanship.

Ms Lane therefore submitted that merely because a Completion Certificate had been issued does not mean that the terms of the contract had been fully implemented. There were express terms in the Pursuer's quotation and terms implied by law, in respect of materials and workmanship. She then referred to Keating op. cit para. 5.26 and the Standard Form of Building Contract 1998 para. 30.9.1, relating to Architects' Certificates. Keating indicates that the question whether a Completion Certificate is conclusive depends upon the terms of the contract. The contract in this case does not have the wording in para. 30.9.1 of the SBC.

The Defenders had instructed structural engineers, Messrs. Massie, (Massie) Aberdeen, and although there was nothing on record for that, she referred to Macphail on Sheriff Court Practice (2nd ed. 14.74) and indicated that both parties accepted that an oral motion can be a bar in relation to matters not covered in the pleadings.

Massie carried out an inspection of the roof space, looked at photographs and had examined the terms of the contract between the Pursuer and the first and second Defenders. In a letter dated 9 December 2004 addressed to the first Defender, Massie had produced a detailed account of what had not been done properly, what required to be put right, and at what cost. For example, they had identified that the building does not have underpinning, or a damp proof course (DPC). Furthermore, in a letter written by the first and second Defenders to their solicitors, they say that the central heating system had been poorly installed, and, in particular, that piping was inappropriate, as was clear, for example, in relation to the heated towel rail. It follows therefore that the Defenders have a stateable case that the Pursuer had not carried out the work required under the contract. He had omitted to do certain work, e.g. the foundations and a DPC and further that, in relation to the central heating system, the contract had not been done with the skill and required of a reasonably competent heating engineer.

The Defenders' position is that the Pursuer is in material breach of contract, and accordingly, he cannot insist on performance by the Defenders of their obligation to pay. The Defenders are counterclaiming for £17,000 plus VAT which virtually wipes out the sum sought by the Pursuer in his motion. I should therefore take cognisance of the Defenders' amended position and recognise that they have a substantial defence to the action and therefore refuse the motion for summary decree.

Mr Summers responded by inviting me to ignore the letter from Massie and to grant summary decree for £17,373.22 which meant adding back the sum of £3152.01 above referred to.

He accepted that there was no contractual term about the 9 months' guarantee; it was referred to merely as an indication of the length of time which the first and second Defenders had taken to draw defects to the attention of the Pursuer.

He referred to the Pursuer's estimate (No. 5/1/4 of Process) which states inter alia that the Pursuer undertook to "form dwellinghouse as shown on plans prepared by myself and to the satisfaction of the Building Control Department." The Defenders had submitted that only the plans had to meet the requirements of the Building Control Department, but Mr Summers responded by drawing attention to the Specification (No. 5/1/3 of Process) page 2 of which contains the following statement, "All works to be done to the Satisfaction of the Building Inspector & in accordance with the Building Standards (Scotland) Regulations 1990/93." He submitted that it was clear from that that what the Pursuer had undertaken, and all that he had undertaken was to produce a building which had to reach the standard above referred to, and because a Certificate of Completion had been issued, the Pursuer had complied with the contract. Furthermore, that is precisely what the Defenders say in their Answer 3 (page 5 of the Record.)

He submitted that the letter from Massie dated 9 December 2004 is irrelevant and speculative. It is irrelevant because the plans and the building clearly complied with the Regulations, and that was all that was required of the Pursuer. It was speculative in that the letter does not state in terms that the building does not have a DPC, because the word "missing" appears in inverted commas and what Massie propose is to carry out a costly inspection in order to find out what, if anything, is not there which, in their opinion, should be.

Their report is not based on anything other than photographs taken as the work was in progress. They refer to underpinning, but there is nothing in the letter from David Birtwhistle about that, or about a DPC (No. 6/1/1 of Process) If one looks at the plans which were approved, in particular No. 5/1/6 of Process, plan No. 5, no underpinning is shown on that. Mr Summers submitted that paragraphs 2 to 9 of the letter from Massie are pure speculation.

So far as the central heating was concerned, the Pursuer instructed reputable engineers whose account had been paid. Mr Summers referred to the Invoice from North East Boiler Sales & Services Limited dated 29.7.03 attached to which is the Job Sheet/Report dated 24.7.03 which does not contain anything adverse about the installation. If the house is damp as is contended, Mr Summers submitted that it is interesting to observe that there is no written or verbal report from Rentokil which is referred to in the letter dated 11 December 2004 from the first and second Defenders to their solicitors.

Mr Summers invited me to ignore the Massie report and grant decree in the sum of £11,917.77 in respect of Crave 1 and £5455.45 in respect of Crave 2, making a total of £17,373.22.

It is not appropriate for me at this stage to reach a concluded view on the construction of the contract entered into between the Pursuer and the Defenders. Even if it is correct to say, as the Defenders contend, that it was only the plans which had to meet with the approval of the Building Control Department and that the Certificate of Completion is not conclusive in relation to what work should have been carried out and to what standard, the plans which received that approval are those attached to the Building Warrant No. 5/1/5 of Process. Accordingly, the plans with Massie's "overmarking" are irrelevant. It follows therefore that the Pursuer was required to comply only with the plans as approved and not the plans with Massie's suggestions on them. In particular, while Massie's plans show underpinning, there is no reference to that on the approved plans. Furthermore, although Massie speculate that there is no DPC, there is a reference to a DPC on the plans, Nos. 5/1/6(5), 5/1/6(6) and 5/1/6(8) of Process, which are among the plans approved by the Building Control Department. I therefore regard that material from Massie as irrelevant, and as Mr Summers said, speculative. Even although I am not restricted to the pleadings when considering whether or not to grant summary decree, (Macphail loc. cit.), material which is irrelevant has obviously to be left out of consideration. Ms Lane accepted that, if I rejected that material, I would be entitled to grant decree for £8765.76 in terms of Crave 1 and £5455.45 in terms of Crave 2.

That being so, the only matter remaining is whether or not to add back the £3152.01. That is the cost of alleged defective work as set out in Answer 3 and Statement in Fact 2. I have no difficulty in accepting that this figure ought not to be deducted. The details of this sum are set out in No 6/1/3 of Process which is an estimate from J.Y. Contracts dated 16 September 2004. It refers to works to be completed (1 and 2), replacement of broken slates (3), and "other misc. items" to be completed (5). If these were things which ought to have been done under the original contract, the averments in Statement in Fact 2 cannot be reconciled with the Certificate of Completion issued on 12 January 2004. Item 4 refers to a leaking master bedroom door, but there is nothing to suggest when that "problem" arose and furthermore, there is a reference to doors which needs to be sealed in the letter from Mr Birtwhistle to the Pursuer dated 9 October, 2003 (No.6/1/1 of Process). Because of the existence of the Certificate of Completion, I am entitled to assume that that work was done to the satisfaction of the Building Control Department. It is not clear what relationship there is between the copy estimate dated 16 September 2004 and the Schedule of Works Outstanding as at 9 October, 2004 (No. 6/1/2 of Process). Furthermore, it is not clear from that estimate or the Schedule (nor was it clear from the submissions) that the matters identified in these documents are different from those identified by Mr Birtwhistle in his letter of 9 October 2003. So far as item 5 is concerned, it is also lacking in detail and so there is nothing which would permit me to conclude that that too was something excluded from what is covered by the Certificate of Completion. Again, it was not stated in submission that this was a matter which was covered by the contract, but which is outstanding, despite that Certificate.

In all the circumstances, I shall grant decree in favour of the Pursuer in the sum of £17,373.22 made up as above indicated, with interest. I was asked to reserve the question of expenses.