A2594/05

 

SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN

 

 

 

		JUDGMENT   of   SHERIFF DOUGLAS J CUSINE
		in causa
		ABERDEEN JOINERY WINDOWS AND DOORS LIMITED, a company registered under the Companies Act formerly having a place of business at 582 George Street, Aberdeen and now having a place of business at Unit 4, Wood International Centre, Craigshaw Drive, West Tullos, Aberdeen AB12 3AG PURSUERS
		against
		Mr. A. SALAAM, residing at 7A The Chanonry, Old Aberdeen, AB24 1RN. DEFENDER

 

ABERDEEN, 30^th April, 2009.

 

The sheriff, having resumed consideration of the whole cause:-

 

(a) finds the following facts to be admitted or proved:

 

(1) The parties are designed in the instance.

 

(2) On 9^th December 2004, the Pursuers contracted with the Defender to supply and fit eighteen replacement windows at the Defender's property at 7A The Chanonry, Old Aberdeen ("the premises"). The total contract price was £23,341.37 inclusive of VAT.

 

(3) Prior to the contract, the Pursuers' director, Graham Irvine, visited the premises and took measurements. He passed the matter on to their sales manager, Richard Dempsey, who also visited the premises, took measurements and produced a price based thereon.

 

(4) The price was acceptable to the Defender.

 

(5) The contract is signed on behalf of the Pursuers by Richard Dempsey and is signed by the Defender.

 

(6) The contract is on two pages, printed back to back. The first page has details of the windows, it provides for a five year guarantee and also states, "When Planning Permission or Building Warrant is required, local authority fees are payable direct to the architect."

 

(7) Also on the front page, immediately above the space for the signature, the following statement appears, "I the undersigned do hereby agree to purchase from Aberdeen Joinery Windows & Doors Limited a glazing installation as specified in the schedule of work, to be carried out in accordance with the Terms and Conditions set out overleaf of which I am in receipt of a true copy."

 

(8) The terms and conditions include, "3" which states, "Any variations to the Contract can only be made by agreement in writing by both parties; "9" which states, "Where Planning Permission or Building Warrants are required, these will be the responsibility of the customer. Completed works are due for payment regardless of the issue of a completion certificate from the local authority; and "12" which states, "If there is a genuine complaint with regard to the installation, the Customer is entitled to retain 10% of the total purchase price pending investigation of the complaint. As soon as the complaint is rectified, the 10% balance becomes due immediately."

 

(9) Mr Dempsey went over the terms and conditions with the Defender prior to the contract being signed. The Defender understood the terms and accepted them.

 

(10) The installation of the windows was completed in early June 2005 and on 8^th June 2005, the Pursuers rendered an invoice in respect of the original contract price added to which was the cost of an additional window in the cellar. The figure in the invoice is £24,282.55 inclusive of VAT.

 

(11) The invoice states "7 day invoice," but on receipt of it, the Defender requested further time in order to find the necessary finance.

 

(12) When the invoice remained unpaid, a reminder was sent out. No payment was made in response to that and the matter was then drawn to the attention of Mr Irvine who, in turn, raised the matter with Mr Dempsey. Mr Dempsey contacted the Defender who told Mr Dempsey that he was happy with the work and had no issue with the invoice. At that point, the Defender did not mention any problems which he had with the installation, nor did he offer to pay any part of the price.

 

(13) Some weeks later, the Defender mentioned things which he required the Pursuers to remedy ("snagging"). Having snagging problems is not uncommon in this type of work. The Pursuers' employees visited the premises on at least ten occasions to rectify these matters. They put right all of what had been required by the Defender. Mr Dempsey was overseeing the work being done by the Pursuers' employees in respect of the snagging. When the work had been done, the Defender said that he was happy with what had been done.

 

(14) Among the work done by the Pursuers in relation to snagging was re-balancing of the windows, the replacement of a broken balance, the re-attaching of a balance, replacement of fifteen latch fasteners (which were replaced because the Defender did not like the original ones), internal and external painting and cleaning of the glass.

 

(15) The Defender continued to complain about work which he said had not been done. After these numerous visits, the Pursuers eventually decided in July 2005 not to return to the premises, despite the Defender still saying that things required to be done. That was partly because the Defender had not paid anything towards the price, but principally because the Pursuers were satisfied that the work had been done properly and that the Defender's concerns had been met, there being no contrary indication at that time from the Defender. Had the Defender made a partial payment, the Pursuers would have returned to the premises.

 

(16) Any snagging work which required to be put right would be covered by the Pursuers' five year guarantee.

 

(17) On the Defender's instructions, Mr Gordon Hamilton, a chartered building surveyor with Messrs D M Hall, visited the premises on 30^th October 2006 and produced a report dated 10^th November 2006. It indicates that an amount of snagging work requires to be carried out, but he was unable to say what the cost of that would be.

 

(18)          According to him the main faults were:-

(a)          A number of windows, (seven out of eighteen) required to be re-balanced.

(b)          The decoration was poor.

(c)          The latches did not work because the windows required to be balanced.

(d)          Some meeting rails did not actually meet.

 

(19) On the Pursuers' instructions, a report was commissioned from Mr James Johnstone of Messrs. F G Burnett, Surveyors, Aberdeen. He inspected the premises with a colleague on 17^th October 2007 and produced a report dated 19^th October 2007. He was of the opinion that when the windows had been installed in June 2005, the job had reached the stage of practical completion, but that snagging work still required to be put right and he estimated the cost to be £3,000 exclusive of VAT. The main faults were the same as those identified by Mr Hamilton.

 

(20) The main conclusion of his report was that the work had reached the practical completion stage in June 2005 which meant that only minor problems had to be put right.

 

(21)          The Pursuers agreed to deduct from the original contract price the sum of £3,525 being the estimated cost of the snagging work identified by Mr Johnstone inclusive of VAT which at the time was at the rate of 17.5%. They also deducted the cost of the extra window, because they accepted the Defender's argument that this was a variation to the original contract which in terms of clause 3, ought to have been in writing, and it was not.

 

(22)          The Defender obtained two quotations for replacement of all of the windows. These quotations included work which the Pursuers had not contracted to do, including putting up scaffolding and work on the shutters.

 

(b) finds in fact and in law:-

 

(1)    That the Pursuers' installation of the windows at the premises was of satisfactory quality, subject to snagging;

(2)    That a reasonable estimate of the cost of that snagging is £3,525 inclusive of VAT, at the then applicable rate.

 

(c) finds in law:-

 

(1) That the Pursuers entered into a written contract with the Defender on their standard terms and conditions of which the Defender was aware and agreed to;

(2) That none of the terms and conditions in said contract breached the provisions of the Unfair Contract Terms Act 1977, or the Unfair Terms in Consumer Contracts Regulations 1999;

(3) That the Pursuers were not in breach of any obligation incumbent on them in terms of the Supply of Goods and Services Act 1982;

(4) That the Defender's purported rejection of the goods was unjustified and untimely;

(5) That the Pursuers are entitled to payment of the contract price of £23,341.37, under deduction of the said sum of £3,525, i.e. £19,816.37, (but they crave only for £19,816.27).

(6) That a reasonable estimate of any damages due to the Defender, had the Pursuers been in breach of contract, would be £3525.

(7) That in the event that there was no contract between the parties, the Defender was unjustifiedly enriched by the work done by the Pursuers and a reasonable remuneration for that work would be £19,816.37.

 

 

THEREFORE quoad the counterclaim, Repels the Defender's 1^st and 2^nd pleas-in-law, and Sustains the Pursuers' 2^nd, 3^rd and 4^th pleas-in-law; Dismisses the counterclaim; quoad the principal action, Sustains the Pursuers' 2^nd plea-in-law and Repels the Defender's 3^rd, 4^th, 5^th and 6^th pleas-in-law; Grants decree against the Defender for payment to the Pursuers of the sum of Nineteen thousand, eight hundred and sixteen pounds, twenty-seven pence (£19,816.27) with interest thereon at the rate of 8% per centum per annum from the date of citation until payment; Certifies Mr James Johnstone, Associate Building Surveyor, Messrs F.G. Burnett, Aberdeen as a skilled witness for the Pursuers; Finds the Defender liable to the Pursuers in the expenses of the action; Allows them to give in an account of same and remits the same when lodged to the auditor of court to tax and to report.

 

 

 

NOTE

This case went to proof on 23^rd and 24^th February 2009 with submissions on 25^th February. Evidence was given for the Pursuers by Graham Irvine, Richard Dempsey, Andrew Rennie, Graham Somers and James Johnstone. The Defender gave evidence and on his behalf evidence was given by Gordon Hamilton and Shaheed Salaam. The Pursuers were represented by Ms Fox and the Defender by Mr Mullen, both solicitors.

 

Background

On 9^th December 2004, the Pursuers and the Defender entered into a written contract whereby the Pursuers agreed to supply and fit eighteen replacement windows at the Defender's house at 7A The Chanonry, Old Aberdeen. The contract was entered into on the Pursuers' standard terms and conditions which were explained to the Defender by Richard Dempsey, the Pursuers' sales manager.

 

The contract price was £24,282.55, but the Pursuers sue for £19,816.27, the difference being the cost of putting right some defects which still exist, and of an extra window (for which, the Pursuers later accepted they could not charge). The Defender has paid nothing towards the contract price, despite the installation of these windows having been completed in June 2005. By letter dated 19^th November 2007, the Defender purported to reject the windows. The Defender counterclaims for £35,419.20 which is said to be the difference between the Pursuers' contract price and the lower of two quotations obtained by the Defender for replacement of all of the windows.

 

 

1.                  Pursuers' submissions

(a) The principal action

Following upon the evidence, the Pursuers submitted that the following averments of fact had been substantiated:- (a) in Article 3 of Condescendence, "That the said Richard Dempsey produced a costing for the Defender which was then issued in the form of the Pursuers' standard contract dated 9^th December 2004 which forms No. 5/2/1 of process and that this was signed by both parties and in particular the Defender accepted by his signature thereof to be bound by the Pursuers' standard terms and conditions overleaf on the contract (forming No. 5/2/2 of process) of which he acknowledged he was in receipt of a copy and that said terms and conditions had been brought to his attention by the said Richard Dempsey all in accordance with Clause 2 of the Pursuers' terms and conditions." Evidence led in support of that submission came primarily from Richard Dempsey during his examination-in-chief. He stated that the Defender read over the entire contract in the Pursuers' showroom in the presence of his grandson. Mr Dempsey drew the Defender's attention to the terms and conditions and asked him to read the same before signing the contract and was satisfied that he did not have any doubts. In addition to that, there was evidence from Mr Irvine during his examination-in-chief of the procedure adopted in the signing of No. 5/2/1 of process.

 

In Article 3 of Condescendence, "That the works were completed by the Pursuers with some difficulty. The Pursuers' workmen having returned to the Defender's premises for snagging on at least ten separate occasions after practical completion." Mr Dempsey, Mr Irvine, Mr Rennie and Mr Somers all spoke to the fact that, firstly, as far as they were concerned, the works were complete and, secondly, that the Pursuers' workmen returned on numerous occasions for snagging after practical completion. In detail, during his examination-in-chief, the Pursuers' first witness, Mr Irvine, stated that the workmen had returned "ten or fifteen times." In cross-examination, he confirmed that he himself went to the premises, "a couple of times because of the size of the invoice". He was aware that primarily "Richard Dempsey was supervising the work." He reiterated during cross-examination that the joiners returned to the site between ten and fifteen occasions, something which he said was unusual. Again in cross-examination, Mr Irvine stated that the works were completed satisfactorily and that the job was complete. Additionally he stated in cross-examination that, "after we left the job was one hundred per cent."

 

Turning to the evidence of Mr Dempsey, in examination-in-chief, he explained that he attended with the joiners on one final occasion in an attempt to, "rectify any problems more on the Mr Salaam's behalf than the company's." According to him, when they left on that occasion, the Defender was described as happy with the work and that the work was completed satisfactorily dealing with all the Defender's complaints.

 

In cross-examination, Mr Dempsey's evidence was, "to the best of my recollection everything was attended to." When the outstanding items contained in the Defender's schedule No. 6/3/1 of process were shown to him, Mr Dempsey's reply was that items 1 to 7 were completed with the exception of the shutters. On further questioning, Mr Dempsey further confirmed that when he went to supervise the joiners, all snagging work was completed and he had left there with everything completed satisfactorily and in relation to the list in the Defender's letter of 10^th August 2005 (No. 6/3/1 of process), he said that these items had already been fixed when he was on site.

 

In the Pursuers' submission, the most credible of the Pursuers' witnesses was Mr Andrew Rennie. During examination-in-chief, he indicated that he could recollect returning on at least, "a dozen" occasions purely for snagging" to the Defender's home. He was, "satisfied that they had done all they could do" and that as far as he was concerned the job was, "complete". When he left the site, there were, "no major issues or any concern that they still had to complete". During cross-examination, Item 6/1 of process was put to Mr Rennie. He disagreed with the schedule and his evidence was that, "we had finished the job."

 

The most telling part of his evidence, it was submitted, was when he was asked to comment on the Defender's letter No. 6/3 of process which he indicates he had never seen before. On being directed to page 2 of the letter namely Items 1 to 7, he stated as far as Item 1 was concerned that the windows were balanced. As far as Item 2 was concerned, the bathroom window was fixed. So far as Item 3 he could not remember that. Item 4 was highly unlikely because the first set of latches were ones with which the Defender was not happy and they were changed to a style that was more to his liking and Mr Rennie could not see how fifteen of the new ones could therefore not be working. Item 5, there was a small amount of paint work needed. As far as Item 6 is concerned, his evidence was that they cleaned the glass as they went along and they cleaned it when they were finished installing that particular window. As far as Item 7, he said that these items were fitted when each window had been completed.

 

Turning finally to the evidence of Mr Somers, he indicated during examination-in-chief that they had visited the premises ten to fifteen times and as far as he was concerned when they left, the job was complete, nothing at all outstanding, everything was finished. During cross-examination, and on being shown Item 6/1 of process, his opinion was that nothing was outstanding and on being pressed further, he said that painting gets finished after they leave, all the windows were opening and closing and everything worked as it should have. In the Defender's pleadings at page 6 of the Record, it is stated that upon completion of the work, the Defender noted a number of mistakes and intimated these to the Pursuers.

 

As far as the evidence of Jim Johnstone, a chartered building surveyor, is concerned, he spoke primarily to the report prepared by him, and in particular, the Pursuers submitted that the following material averments have been established. Page 3 of the Record from lines 8 onwards, "There is produced herewith amended report of Jim Johnstone MRICS, Associate of FG Burnett Limited, 33 Albyn Place, Aberdeen, AB10 1LY dated 19^th October 2007." Mr Johnstone spoke to his conclusion in the amended report, (No. 5/5 of process) and again the following material averments, it was submitted, have been established by him, for example, paragraph 2 on page 3 of the Record where it states, "It is our opinion that whilst practical completion of the window installation had been achieved there is a significant amount of snagging/repair items which required to be rectified. It is estimated that the snagging/repair work required would cost in the region of £3,000 exclusive of VAT." He confirmed in his evidence in examination-in-chief that, (page 3 of the Record, paragraph 3 from line 3) "I have been informed Aberdeen Joinery are unwilling to revisit the premises prior to receiving at least partial payment." Item 12 of Aberdeen Joinery's terms and conditions state if there is a "genuine complaint" with regard to the installation, "the customer is entitled to retain 10% of the whole purchase price pending investigation of the complaint. As soon as the complaint is rectified the 10% balance becomes due immediately." He also confirmed during his examination-in-chief in relation to page 3, paragraph 4 of the Record, "It is suggested that a programme of snagging work is agreed between the parties along with a bench mark agreement regarding an acceptable standard of finish." Mr Irvine, Mr Dempsey and Mr Johnstone spoke to the fact that on page 3, paragraph 5 of the amended Record it is stated, "In particular Mr Johnstone estimates the value of the snagging items as at 17^th October 2007 in the region of £3525 (inclusive of VAT)." Mr Irvine and Mr Dempsey spoke to the fact that paragraph 5 on page 3, line 3 and onwards of the amended Record it is stated, ""The sum now sued for represents the contract price of £23,341.37 less the estimated snagging costs of £3,525."

 

Mr Johnstone spoke to the Pursuers esto case on Record which can be found at the foot of page 3 of the amended Record. This was an element of evidence which was heard under reservation.

 

Mr Dempsey spoke to the fact that in accordance with normal practice, he asked the Defender to read the terms and conditions of the contract before signing. Accordingly, it can be held that (page 4 of the amended Record, lines 7 onwards), "In addition, in accordance with the Pursuers' Clause 9 of said terms and conditions all planning permissions and building warrants are the responsibility of the customer." The Pursuers submitted that the action was necessary that if the evidence of Mr Dempsey is preferred in relation to the formation of the contract, all fifteen terms and conditions of the contract (No. 5/2/2 of process) form part of the contract between the parties and it was submitted that the court should find in particular in terms of the remainder of Article 4 of condescendence 7 of the amended Record that, "In the circumstances therefore in terms of the written contract between the parties the Defender, if he felt he had a genuine complaint with regard to the installation, should have intimated same and retain 10% of the total price of £23,341.37 in other words £2,334.13. "

 

It was submitted that the support, if any, which was needed for the fact that the contract was firstly a written contract and secondly governed by the Pursuers' terms and conditions, No. 5/2/2 of process can be found in the evidence of the Defender himself. During cross-examination in relation to condition 3 of the Pursuers' terms and conditions, he accepted that he had used that condition to have the cost of the additional cellar window removed from the total due. In the light of the foregoing, the evidence of the Pursuers' five witnesses was commended and the court was invited to hold that the admitted facts together with the Pursuers' material facts on Record have been held to be proved.

 

Objections

The first and main objection of the Pursuers was taken during the cross-examination of Mr Dempsey on day 1 of the proof, in particular when the Defender's solicitor wished to put the report of Mr Hamilton to the witness (No. 6/2/1 of process). At that stage, the objection was sustained and Mr Mullen, agent for the Defender, sought leave of the court to amend his pleadings to formally incorporate the report into the Record. That leave was, however, refused and at that stage, Mr Mullen did not put the report to the witness. However, on day 2, and immediately at the start of the cross-examination of Mr Johnstone, Mr Mullen sought to put the report of Mr Hamilton to this witness. The Pursuers' objection was re-iterated and it was agreed that the matter had been ruled on the day previously and none of the witnesses from day 1 had had the opportunity to be questioned on this report. Accordingly, the Pursuers' agent submitted that it was extremely prejudicial to the Pursuers and indeed was a matter on which the court had already ruled. It was determined that this should be put to the witness and dealt with at the conclusion of the proceedings.

 

The Pursuers sought a ruling that the evidence led in relation to the report on Mr Hamilton be struck from the record of the proceedings for the following reasons.

 

(1) Timeous objection was properly taken on the first point. The report was sought to be entered into proof.

 

(2) Relevant objection to the evidence was sustained by the court as a result of which the Defender sought leave to amend at the bar which was refused.

 

(3) The Pursuers' case continued under the impression that the objection had been sustained. No evidence led from any of the Pursuers' witnesses on the report of Mr Hamilton.

 

(4) The Defender then attempted to revisit the matter during his cross-examination of the Pursuers' expert.

 

(5) There are no pleadings of any nature whatsoever contained in the principal action or the counterclaim of the Defender which make any reference to the report. To that extent, the Defender's pleadings are fatally flawed. In support of that, reference was made to paragraph 9.67 of Macphail, Sheriff Court Practice, 3^rd edition.

 

The next objection which was reserved was in relation to a question put to Mr Johnstone in re-examination along the lines of, "If you deduct your £3525 snagging from the original invoice would that represent a fair value for the works?" At that point, the Defender's agent objected on the basis that there are no averments. It was submitted that the Record for this is in the Pursuers' esto case at the foot of page 3 and the top of page 4 of the amended Record.

 

The Defender's case.

Turning to the Defender's case, the Pursuers submitted that the primary averments are contained in Answer 3, but the Defender does not appear to have led any evidence of misrepresentation (lines 12 onwards of page 4).

 

Furthermore, the Defender does not appear to have led any evidence regarding the averment on line 15 to the effect that the Pursuers would obtain all relevant consents. In Answer 4 of the Record, the Defender avers that the Pursuers are in breach of contract in not having obtained the listed building consent required for the replacement windows. However, no evidence was led of this breach from the Defender's witnesses.

 

It seems that the Defender is basing his case on averments contained at the foot of page 7 and top of page 8. At the foot of Answer 4 on page 8, the Defender seeks to rely on rejection of the windows and termination of the contract.

 

The Pursuers' submission was that if the Defender seeks in the principal action to reject the windows, he must do so by proving to the court that the breach of contract was a material breach and reference was made to section 11(F) of the Supply of Goods and Services Act 1982 ("the 1982 Act"). It was submitted that at no point in the averments in the principal action, or in the pleas-in-law for the Defender in the principal action is there any averment of material breach. Furthermore, neither during the evidence of the Defender, the Defender's son, nor Mr Hamilton was evidence led of any material breach of contract. The Pursuers' submission therefore was that not only the documents, but the evidence of the Defender is fatally flawed.

 

It was submitted that if no material breach is pled or evidence led thereon, then the only remedy open to the Defender is in terms of section 11F(1)(a) of the 1982 Act, namely to claim damages. It was submitted that the guarantee takes effect when the goods are delivered in terms of The Sale and Supply of Goods to Consumers Regulations, (SI.2002/3045) Regulations 2 and 15(1).

(b) The Counterclaim.

Turning to the Defender's counterclaim which is for the sum of £35,419.20, it is stated in Article 3 of Statement of Facts for the Defender, "The loss to the Defender as the result of the Pursuers' breach of contract is £35,419.20 being the difference between the lower of the two quotes obtained and the contract price between the Pursuers and the Defender. This is the sum sued for." In substantiation of the Defender's counterclaim, evidence was led from only one source, namely the Defender. No one from Scullion Bruce and Company or John R Craig (Kintore) Limited spoke to their quotations nor could any questions be asked of them. Taken at its highest therefore, the evidence can only be that of the Defender to having obtained these two quotes. There was no substantiation during the evidence of any of the Defender's witnesses nor in the pleadings for the need for a complete replacement of the windows. Indeed, the quotations received seem to be beyond the original contract between the parties in many respects.

 

Calculation of Loss.

The next issue is how one determines loss. The Pursuers' submission was that section 53(A) of the Sale of Goods Act 1979 applies and that states that the buyer's remedy is damages and that the measure of damages for a seller's breach is the estimated loss directly and naturally resulting in the ordinary course of events from the breach and that where the seller's breach consists of delivery of goods which are not of the quality required by the contract and the buyer retains the goods such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had fulfilled the contract.

 

The Pursuers' submission was that the Defender's case for damages, taken at its best, could be determined only on the valuation by Mr Johnstone. The Defender offered no other evidence to allow the court to measure the damages and provided no valuation of the goods at the time of delivery. The value, had the contract been fulfilled, would be £23,341.37. In the Pursuers' submission, even if the evidence of the Defender was to be believed, the Defender accepted in cross-examination that he still retains the windows. The issue was how the court could quantify the Defender's loss except by reference to Mr Johnstone's valuation of snagging, a sum which had already been deducted from the contract price. The Pursuers therefore submitted that in the principal action, I should find in favour of the Pursuers in the sum sued for with interest from the date of citation at the rate of eight per cent per annum in terms of craves 2, 3 and 4.

 

Furthermore, in terms of crave 5, I should find that the Defender's rejection of the goods was not timeous and repel all the Defender's pleas-in-law and in particular, pleas 4 and 6. So far as the counterclaim was concerned, I should repel the Defender's pleas-in-law 1 and 2 and sustain the Pursuers' pleas-in-law 2, 3 and 4. I was asked to certify Mr Johnstone as an expert witness and to make a finding of expenses to follow success except in so far as expenses had already been dealt with.

 

2. The Defender's Submissions.

As far as the Pursuers' 2^nd, 3^rd and 4^th pleas were concerned, it was submitted that the Pursuers' case as pled did not afford the Pursuers any remedy. The Pursuers seek the contract price under deduction of £3,000. The evidence of the Pursuers' four witnesses was that the work was complete. That, however, did not sit easily with the pleadings in that the Pursuers seemed to accept that there is some snagging which requires to be put right. As far as the evidence of Mr Johnstone is concerned, his position was that practical completion equates with the windows being in place. Practical completion, however, is not a term of the contract.

 

The contract provides that the customer can retain 10% if there is a genuine complaint. There is no basis upon which the 10% figure is reached and it is not clear who decides whether the complaint is genuine or not. As the Pursuers are not seeking payment of the price, they are not entitled to insist on their second plea-in-law.

 

Pleas 3 and 4 deal with unjustified enrichment, a matter which is covered by McBryde on Contract at paragraph 20 - 132 to 147. The issue for the court is on what basis does one calculate enrichment. It is possible that it could be valued on the basis of quantum lucratus, or the contract price less the £3,000. The £3,000 calculation of Mr Johnstone's was, however, a rough and ready calculation.

 

The Defender's submission was that £3,000 is a substantial amount in relation to the total contract price and even on that basis, the Defender was entitled to reject the installation in terms of the 1982 Act, section 11(D)(2) and (3). The Act makes reference to "satisfactory quality" as defined in the Sale of Goods Act. Satisfactory quality includes fitness for purpose in terms of Section 11 (D)(6) and the test is an objective one. The Defender's submission was that 15% of the value of the contract was outstanding which in this case is the £3,000 figure. It follows that the goods are not satisfactory and not fit for purpose.

 

In the Defender's submission, he was entitled to reject the goods in terms of section 11(F)(2). This was a consumer contract as defined in the Unfair Contract Terms Act, 1977 section 25(1).

 

The Defender was entitled to reject the goods, because there had been a material breach. 15% of the work required to be redone and the Pursuers had refused to return to do any further work on the Defender's property. Reference was made to section 17(1) of the Unfair Contract Terms Act.

 

In the Defender's submission, the Pursuers could not succeed because they had refused to complete the contract. The Defender posed a rhetorical question--what incentive was there on the Pursuers to complete the task even if 10% had been retained? Reference was made to The Unfair Terms in Consumer Contracts Regulations, (SI1999/2083) Regulation 5(1)(2)(4) & (5).

 

It was submitted that what is an unfair contract term depends upon the circumstances. Reference was made to the case of Fiat Auto Financial Services v. Connelly 2007 SLT (Sh.Ct.) 111 which was authority for the view that one has to have regard to the whole facts and circumstances in order to determine that matter.

 

The evidence of the Pursuers' four witnesses was that the Defender was difficult and that explained their having to return on ten to fifteen occasions. It was submitted that that is not necessarily evidence that the Defender was being difficult; it may simply have been that the snagging was not being corrected as the Defender requested.

 

It was submitted that I should accept the evidence of the Defender and his son which was to the effect that there were lots of problems. As at 6^th July 2005, most of the items which had been listed by the Pursuers had not been done and that is supported by the report of Mr Johnstone.

 

It was submitted that the Defender's remedies are governed by the 1982 Act. If the Defender was the subject of a material breach on the part of the Pursuers, the court does not need to scrutinise what he did in great detail. The evidence was that it was difficult to get other contractors to finish a job where contractors had been involved. In these circumstances, all the Defender had managed to do was to get two quotations and Mr Irvine's evidence was, that apart from No. 7, the quotations were reasonable albeit at the high end of reasonable.

 

It was submitted therefore that I should sustain the Defender's third, fourth, fifth and sixth pleas-in-law in the principal action and repel the Pursuers' second, third and fourth pleas-in-law. In the counterclaim, I should sustain the Defender's first and second pleas and repel the Pursuers' second and third pleas and grant decree in favour of the Defender in respect of the sum of £35,000.

 

3. Pursuers' response

It was indicated that the applicable legislation was agreed between the parties. It was submitted that the term "practical completion" is referred to on page 6 at line 30. As far as retention is concerned, there is no plea to that effect. A particular difficulty faced by the Defender is that there are no averments and there was no evidence in relation to material breach. In that event, the Defender is entitled only to damages and the only evidence of the amount came from the report of Mr Johnstone. The Defender had not led any evidence from Messrs Scullion Bruce & Company or John R Craig (Kintore) Limited and the report from Mr Hamilton, even if admitted in evidence, indicated that the work was capable of being repaired.

 

As far as Clause 12 of the contract is concerned, it does not strike at retention and it was accepted that the 10% figure is one within the Defender's power because he could actually ask to retain any sum. The case of Fiat Auto was distinguished on the basis that the car was returned.

 

I should apply judicial interpretation of loss within the meaning of the 1982 Act.

 

 

Decision.

 

I found all of the Pursuers' witnesses to be credible and reliable. Mr Dempsey, who was in charge of the contract, stated that because of the number of windows involved, he took particular care to go over the contract with the Defender and explain its terms to him. The Defender is an intelligent man who used clause 3 of these terms to his advantage to avoid paying for the "extra" window, because there was nothing in writing, and I am not in any doubt that he familiarised himself with all of the terms prior to signing the contract. In any event, his signature is immediately below the statement that he has read the terms and agrees to them.

 

So far as the remedial work is concerned, the two joiners spoke to going to the premises on a number of occasions immediately following the installation of the windows and ultimately coming to the conclusion that the Defender was simply looking for faults. Mr Dempsey's conclusion in relation to that matter, which I accept, was that the Defender was unable to pay, was seeking funds and as a means of avoiding paying, he was finding faults where none properly existed. He and others stated that when they left the premises, they and the Defender were satisfied that all that needed to be done had been done. I do not accept the Defender's evidence that, at that point, he drew matters ( "mistakes") to their attention about which he was still concerned

The Defender's position in relation to planning permission and a building warrant in the pleadings is that the Mr Dempsey represented to him that the Pursuers would obtain the necessary permissions (Answer 3 in the principal action, p. 4 of the Record). No evidence was led on that point and Mr Dempsey was not asked about it. The Defender's evidence was that the clause on the front of the contract meant that the Pursuers were responsible for obtaining the necessary permissions, but that he, the Defender, would require to pay the architect's fees. I have already stated that the Defender was familiar with the terms and conditions which make it quite clear that the responsibility for all such permissions lies with the customer. However, if the Defender's interpretation is correct, it would mean that the Pursuers would instruct an architect who would have to accept on the basis that payment would come, not from those instructing the architect, but from a third party, who may not be a person known to the architect. That is stretching the interpretation of the clause to an extent which borders on the unworkable, but it is certainly unrealistic. I therefore do not accept that the Pursuers were guilty of any misrepresentation to the effect that they would obtain these permissions.

 

The Defender's contention that the work done by the Pursuers was so unsatisfactory that they were in material breach, and the work would have to be done again, is untenable. In the first place, there are no pleadings to that effect and secondly, not even his expert says that. Thirdly, the Defender chose not to bring any witnesses to support that stance, but rather lodged only estimates without any additional information about what instructions were given to the two firms who provided these estimates, and thus depriving the Pursuers the opportunity of putting questions about the quotations. Without going into detail, it was accepted that the two quotations included work which the Pursuers has not undertaken to do, e.g. put up scaffolding. The Defender apparently sees no inconsistency between claiming on the one hand that there is material breach and on the other retaining the windows while refusing to pay the price or any part of it. He did not say that he would be at any disadvantage were he to pay the price, and rely on the Pursuers' guarantee, but, of course, that is inconsistent with his stance that the Pursuers are in material breach.

 

The Defender's son who gave evidence was not present during some of the installation work and he spoke, in the main, to problems of windows not capable of being opened, but in the opinion of both experts, that is down to the need to have them re-balanced. Nothing which that witness said supported the view that the work done by the Pursuers amounted to a material breach of contract. He did not say anything to suggest that the work could not be put right, or about the cost of so doing.

 

I accept the evidence of the Pursuers' witnesses that the windows had been properly installed, and that although the Defender had drawn some snagging to their attention, they had put it right, and that the Defender had either expressed the view that he was happy with the result, or, if not, had not said that he was not happy. Against that background, the Pursuers' refusal to return to the premises was not only understandable, but justified, given that the Defender was not willing to make payment. I do not accept that there is any snagging work, other than that identified by Mr Johnstone.

 

In dealing with the matter, I shall consider firstly the objections, then the Counterclaim, and then the principal action.

 

 

(A) Objections

The Defender's expert, Mr Hamilton, produced a report which is No. 6/2 of process. In cross-examination of Mr Dempsey, the Defender sought to put that report to the witness. The Pursuers objected on the basis that there is no reference on Record for the report, an objection which I sustained and refused leave to the Defender to amend the pleadings. At a later stage, the Defender sought in cross-examination of Mr Jim Johnstone, the Pursuers' experts, to refer again to this report. It was agreed that the report could be put to the witness and that the matter be re-visited. In my view, the report was being founded upon by the Defender to counter the evidence of Mr Johnstone about the extent of the snagging and possibly the cost of putting it right and ought therefore to have been the subject of averment. I find support for that view in the passage in Macphail on Sheriff Court Practice 3rd ed. para. 9.67. The Defender referred to Whitehead's Legal Representative v Graeme John Douglas, an Outer House decision of Lord Carloway (2006 CS0H 178) in which his Lordship held that the lodging of a report has no special significance, but that it may assist a party in adducing evidence if the expert has a report to hand. The report, however, is not a substitute for the evidence actually given. I accept that proposition, but in this particular case, the report was to be used by the Defender in order to challenge any conclusion drawn by Mr Johnstone and while that could have been done by asking the witness questions, in my opinion, it could not be done by referring to the report in the absence of any averments to that effect. Accordingly, in so far as Mr Hamilton's evidence refers to his report, it falls to be excluded.

 

However, even if I am incorrect, leaving the report aside, the evidence of Mr Hamilton did not assist the Defender: rather the opposite, in that he was also of the opinion that there were snagging problems, but he could not say that the figure indicated by Mr Johnstone was too high or too low. He certainly did not say that the work done by the Pursuers was such a poor quality that the job would have to be redone.

 

The final objection was to the Pursuers' the re-examination of Mr Johnstone about whether, after deducting the £3525 for the snagging, the figure in the original invoice is a fair value for the work. The Defender's objection is without foundation, in that the Pursuers have a case based on unjust enrichment and to establish that, evidence about a fair value for work done is essential.

 

(B) The Counterclaim

The Defender seeks payment from the Pursuers of £35,419.20. The Defender lodged in process a quotation dated 14^th December 2007 (No. 6/5/4 of process) from Scullion Bruce & Company, Cabinet Makers & Joiners, Aberdeen. The figure quoted for them for work including supplying and installing new windows was £50,810 exclusive of VAT. No. 6/5/5 of process is a quotation from John R Craig (Kintore) Limited, Building Contractors etc., dated 13^th December 2007. Their quotation for the same work is £67,104.25 exclusive of VAT. The sum in the counterclaim is the difference between the lower of these two quotations and the Pursuers' contract price.

 

The Defender's first plea-in-law in the counterclaim states, and his sixth plea-in-law in the principal action relates to the proposition, that the Pursuers are in material breach of contract.

 

Material Breach

 

Based on the averment in Answer 4 in the principal action and Statement in Fact 2 in the counterclaim that the Defender rejected the windows, one must assume that his position is that the Pursuers were in material breach of contract and accordingly, the windows had to be replaced. There is no averment about material breach, there is no plea-in-law in the principal action to that effect and for that reason alone, the Defender cannot now claim in the principal action, that the Pursuers were in material breach. The first plea-in-law in the counterclaim is that of material breach. A number of points can be made. In the first place, apart from the Defender, no one gave evidence about the quotations which he had obtained. In particular, no one from Scullion Bruce & Company or John R Craig gave evidence that the workmanship of the Pursuers was so bad that the windows had to be replaced. The quotations from these companies include work for which the Pursuers did not contract, e.g. scaffolding, and for what these quotations may be worth, they are not an exact comparison with the work for which the Pursuers contracted.

 

The contention that the Pursuers were in material breach is inconsistent with the evidence given on behalf of the Defender by Gordon Hamilton, a chartered building surveyor with D M Hall. He inspected the premises on 30^th October 2006. I also found him to be a credible witness, whose position was that although there were defects, these could be put right. He was, however, unable to provide any information about the cost. Mr Hamilton's opinion was that the work done by the Pursuers could be remedied and that is consonant with the evidence given by the Pursuers' witness, Mr Johnstone. The Pursuers have led evidence that there were snagging problems, against a background of practical completion at the latest in July 2005, a position supported by the Defender's own witness. The Defender has not led any evidence to counter that.

 

Furthermore, one has to wonder why in November 2007, the Defender rejected the windows and yet did not do so in July 2005 when the Pursuers, having made numerous visits to the premises to put right matters which the Defender says was not done, then refused to return. Accordingly, even if the Pursuers were in material breach, the rejection must be timeous and any rejection two years after the installation would not be timeous unless there was some problem which had not manifested itself at an earlier stage and there is no evidence to that effect.

 

For all of these reasons, the counterclaim falls to be dismissed.

 

(C) The Principal Action

The sum sued for is the original contract price, i.e. £23,341.37, under deduction of the estimated cost of putting right the defects i.e. £3,525 inclusive of VAT which at that time was 17.5%.

 

(i) The Sum Sued For

The Defender's position was that as the Pursuers are not seeking payment of the whole contract price, they are not entitled to insist upon their second plea-in-law. I do not accept that. There is no reason in principle or in law why a pursuer whose claim is for £X cannot decide to limit that to £X - £Y, provided always that there is proof that £X is a sum which could be awarded. It is not uncommon for persons to decide to sue for less than they are entitled to, for example, to get the benefit of the rules on expenses in small claims or summary causes.

 

In this case, the Pursuers are suing for the contract price under deduction of the cost of remedial work identified and costed by somebody instructed by them. It seems unlikely that they would have instructed that person for any reason other than a desire on their part to settle the action without the need for a proof. While it was suggested by the Defender that the figure was on the low side, the Defender's own expert could not provide any other figure and I assume that he was not asked to do so. His opinion was that the £3,000 was on the low side, but even if he is correct in that, it was open to the Defender to counter that and the only "countering" is in the form of a purported rejection of the windows, and two estimates for their replacement. These estimates relate to the Defender's claim that the Pursuers are in material breach, a contention which I have rejected, but, in any event, no one, part from the Defender, spoke to the estimates and they are therefore of little value.

 

There is no dispute about the contract price and in the absence of any other evidence about the cost of any remedial work, I cannot do anything other than accept the £3,000 as being a reasonable estimate given that I found Mr Johnstone to be a credible and reliable witness.

 

 

(ii) Breach

 

The Pursuers' witness, Mr Johnstone's evidence, which I accept, was that "Practical Completion" of the window installation "has been achieved," at the point of installation. (No. 5/3 pf process, para. 6.00). The Defender criticised the use of the term "practical completion" which he equated to the windows being in place. The Defender's position is, correctly, that practical completion is not a term of the contract. That said, there has to be some way of describing a situation where work is done which is of a nature that, despite apparent completion or completion, further work may be necessary. A common situation is encountered in house construction. The local authority is required to issue a certificate to the effect that a house has been constructed in accordance with the building warrant which reflects the building regulations. In common parlance, it is called a "completion certificate" and only once that has been issued can the house be used for human habitation. If the building or part of it is new, it is generally recognised that snagging work may be required. Completion or practical completion is therefore a term which is apposite to describe the position where the house can be lived in, albeit other work may be required. I therefore see no basis for criticising the use of the term "practical completion". Mr Johnstone then says that there is a "significant amount of snagging/repair items." It is obvious that in preparing his report, he had to assume that the condition of the premises when he inspected them was what it would have been in July 2005, immediately after the installation. For example, his report at para. 3.15, states, "If the damage was caused during the installation...." At para. 3.22, he identifies a "possible...historic defect." That said, the Pursuers have agreed to the cost of remedying the snagging whenever it was caused. I do not accept the proposition that because there is snagging to be done, the Pursuers are in breach, and even if, as the Defender contends, the cost of remedying the snagging would be 15% of the contract price, it still does not follow that the Pursuers are in breach, far less material breach.

The Defender made submissions about the term of the contract which states that if the Defender were dissatisfied with the work, he could have retained 10% of the purchase price in the event of a "genuine complaint" (Clause 12). I am not clear about the relevance of this, given that the Defender has not paid anything. However, I shall deal with the matter.

 

The Defender submitted, correctly, that it is not stated who would determine whether a complaint in genuine and secondly, it is not clear how that 10% figure was reached. While it may be that the contract could have said in terms, "In the event of the customer having a genuine complaint...," the reality is that the customer could retain 10% and leave it to the Pursuers to argue that the customer's complaint was not genuine. In any event, had the installation of the windows been so unsatisfactory as to amount to a material breach, it is arguable that the terms of the contract could not exclude the Defender's entitlement at common law to reject the windows and refuse to pay any of the price. Any clause which purported to exclude the Defender's remedies at common law might very well violate the Unfair Contract Terms Act 1977.

 

While it may not be clear how the 10% was reached, I do not see how allowing the Defender to retain 10% puts him at any disadvantage. He would, as I have said, have a remedy available to him at common law in the event that the breach was material. Even if it were not a material breach, and the Defender retained 10% but the Pursuers then refused to put right what the Defender claimed was wrong, the Defender could have instructed others to carry out the remedial work and there is nothing in the contract nor, in my opinion, could there be, which would have prevented the Defender from recovering from the Pursuers any sum required to carry out that remedial work even if it exceeded 10%.

 

 

 

(iii) Pursuers' Guarantee

 

The Pursuers' contract provides for a "Five Year Guarantee (Hardwood)" which appears on the front page of the contract (No. 5/2/1 of process). I can deal with this briefly. The Sale and Supply of Goods to Consumers Regulations, (SI.2002/3045) Regulations 2 and 15(1) provide as follows:- "2. 'consumer guarantee' means any undertaking to a consumer by a person acting in the course of his business, given without extra charge, to reimburse the price paid or to replace, repair or handle consumer goods in any way if they do not meet the specifications set out in the guarantee statement or in the relevant advertising;" "15(1) Where goods are sold or otherwise supplied to a consumer which are offered with a consumer guarantee, the consumer guarantee takes effect at the time the goods are delivered as a contractual obligation owed by the guarantor under the conditions set out in the guarantee statement and the associated advertising."

The Pursuers' submission, which was not disputed, was that the guarantee is governed by these Regulations. I agree. I was also submitted that the guarantee did not come into effect until the price was paid, and I agree with that also.

 

(iv) The Legislation.

 

There was no dispute about the relevant legislation. As this is a contract for the supply of both goods and services, the Supply of Goods and Services Act 1982 applies. The general purpose of the Act is to imply into such a contract terms comparable to those which are implied by the Sale of Goods Act 1979. Thus, implied terms relating to inter alia quality or fitness apply (1982 Act, Section 11D) and similar remedies for breach of contract, are available (Section 11F).

 

In terms of section 11D, there is no implied term of the quality or fitness except as provided for in that section and section 11E (which deals with samples and has no bearing on the present case.) Section 11D(2) provides that where the transferor transfers the property in goods in the course of a business (and the Pursuers in this case did so), there is an implied term that the goods are of satisfactory quality. The test is objective and requires a consideration of all relevant circumstances.

There is no dispute that this was a consumer contract and the definition of that term as set out in the Unfair Contract Terms Act 1977, section 25(1) applies. (section 11D(10) and 11F(3) of the 1982 Act).

 

I do not accept the Defender's argument that clause 12 of the contract which permits the Defender to retain 10% of the purchase price is an unfair term within the meaning of 1977 Act. The Defender posed a question about what incentive there would be for the Pursuers to complete the work, even assuming that the Defender had retained 10%. In my opinion, the incentive was to receive the balance of the purchase price. Reference was made to the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) which deal with unfair terms and Schedule 2 gives as an example of such a term as one which limits the legal rights of the consumer in the event of non-performance or partial non-performance, or unsatisfactory performance by the seller/supplier. In my opinion, the question whether the clause is unfair has to be determined objectively by looking at the clause, but without reference to what may have occurred in a particular case. If that were not the correct approach, a clause in any one contract might be unfair, but the same clause on another contract might not be, and that cannot be the intention of the legislation.

 

However, even if the clause were unfair, the whole contract is not thereby rendered unfair, unless the "offending" clause cannot be severed from the rest of the contract which is clearly not the case here. Were the clause not there, the Defender's remedy, if the Pursuers were in material breach, would be to retain the whole price as the Defender did, or if they were in breach, but not material breach, to pay the price and sue for damages in respect of that breach.

 

(v) Satisfactory Quality

The issue which remains is whether the Pursuers' work was of a satisfactory quality. In my view, there is no doubt about that. I agree with the approach taken in Fiat Auto Financial Services viz: that in determining that matter, the whole circumstances need to be considered. Both the Pursuers' witness, Mr Johnstone and the Defender's witness spoke of snagging matters. They accept that as at November 2006 and October 2007, some snagging work remained to be done. However, Mr Johnstone's position, which I accept, is that such snagging work is not uncommon. While the Defender's expert was of the opinion that the problems were more significant than the Pursuers' expert suggested, he was unable to say that the £3,000 estimate was inaccurate or was an under-estimate. I accept the opinion of the Pursuers' expert that as at June 2005, when the windows were installed, the work had reached the stage of practical completion. That position is supported by the Pursuers' employees. Using the objective test, the question would be, would the reasonable person, looking at the work immediately on installation of the windows, or at the stage in July 2005, when the Pursuers had remedied all that the Defender had asked to be put right, have regarded the work as satisfactory. In my view, such a person would have answered that in the positive. I therefore conclude that the Pursuers were not in breach of contract, entitling the Defender to claim damages. At that point, therefore, the contract price became payable. I observe, in passing, that had the Defender paid at that point, he would have had the benefit of the five year guarantee covering any snagging problems.

 

However, even assuming that the Pursuers were in breach, that would have entitled the Defender to claim damages. (section 11F(1)(a) of the 1982 Act) Section 53A(2) of the Sale of Goods Act 1979 provides, "Where the seller's breach consists of the delivery of goods which are not of the quality required by the contract and the buyer retains the goods, such loss [i.e. that directly and naturally resulting] is prima facie the difference between the value of the goods at the time of delivery...and the value they would have had if they had fulfilled the contract."

 

Given that the Defender did not produce any evidence that the £3,000 figure was not reasonable, and given that the Pursuers' witnesses, Mr Irvine and Mr Dempsey, accepted that that figure was reasonable, I have no difficulty in concluding that it is a reasonable estimate of any remedial work which still requires to be done. There is no dispute about the contract price and so, the Pursuers are entitled to payment of the price under deduction of the cost of the snagging. At the time of raising the action, the applicable rate for VAT was 171/2%. The rate is now 15%. However, the sum sued for in based on VAT at 17.5% and so, the Pursuers are entitled to the payment of £19,816.37, being the contract price, less £3525.

 

Even if I were persuaded that the standard terms and conditions did not apply to this contract, (and they either apply in whole or do not apply at all, unless any clause is "unfair") there is still a contract for the supply and installation of windows at a price of £23,317.37 and I would have granted decree for that sum, again under deduction of £3525.

 

Little was said, in submission, about unjustified enrichment. If the contract did not exist, a claim based on unjustified enrichment would exist. There is no evidence to allow me to conclude that the figure of £19,816.37 is not a fair and reasonable remuneration, taking into account the cost of the snagging and on that basis, I would have granted decree for that amount had the claim been based on unjustified enrichment.

 

I am willing to certify the Pursuers' witness, Mr James Johnstone, as a skilled witness. Given the Pursuers' success, they are entitled to expenses.