Scottish Sheriff Court Decisions

A1267/08

SHERIFFDOM OF NORTH STRATHCLYDE AT PAISLEY

 

JUDGMENT

of

SHERIFF PETER G. L. HAMMOND

in causa

RALSTON BUILDERS (RENFREWSHIRE) LTD. 83 High Street, Millbrae Industrial Estate, Johnstone, PA5 8SN.

PURSUERS

against

BARBARA ADAMS, residing at 26 Hunterhill Road, Paisley, PA2 6ST.

DEFENDER

 

PAISLEY, August 2009.

The Sheriff, having resumed consideration of the cause:

FINDS IN FACT:

(1)    The parties are as designed in the instance.

(2)    The pursuers are building contractors. The defender as an individual is a property developer. She also carries on property development activities through a limited company, AA BB CC Properties Limited. She is a director of that company.

(3)    In or about October 2007, the pursuers were approached by the defender in connection with her proposals for the conversion of a Nursery School at Marshalls Lane, Paisley, into three residential flats.

(4)    The property at Marshalls Lane is owned by AA BB CC Limited.

(5)    The defender sought and obtained loan funding from Clydesdale Bank for the project. The application was made on behalf of, and funds lent to, AA BB CC Limited. The Clydesdale Bank officer processing the loan documentation, Alison McCoid, did not see the building contract at any time.

(6)    At no time did the defender give any indication to the pursuers that she was contracting as agent or director of AA BB CC Ltd. She mentioned to the pursuers that she was seeking funds from her bank but did not suggest that she was doing so on behalf of AA BB CC Ltd. She did not mention the existence of this company to the pursuers at all. The pursuers were not aware that AA BB CC were involved, and had no reason to believe that they were.

(7)    The first payment of £10,000 to the pursuers in November 2007, and the last payment of £5,000 were made by the defender. The intervening payments were made by AA BB CC Ltd.

(8)    The defender, as an individual, appointed Hickey and Hickey, Paisley, as architects. Ian Hickey of that firm dealt with the defender's project. The purpose of their appointment was to monitor the works, issue architect's instructions on her behalf for variations of the work which arose, and to issue certificates certifying the sums due and payable to the contractors from time to time as the work progressed.

(9)    The defender asked the pursuers to consider drawings for the project and submit a quotation for the building works involved.

(10) By letter dated 24 October 2007, the pursuers provided a written estimate to the defender (production 5/5). The estimate was for the sum of £130,000 plus VAT.

(11)The estimate specifically did not make any allowance for a number of items which required to be costed as extras. These items were listed as (a) electric and (b) gas meters, (c) a new drainage line, (d) new wet rooms, (e) white goods, (f) "renewal of any floor areas and solum areas after foundations for new walls", and (g) carpets and lino. The pursuers estimated that a provisional sum of £15,000 should cover these extras.

(12)Shortly thereafter the defender telephoned John Wingate, the principal of the pursuers' company, and accepted the quotation. Hickey & Hickey were not involved in the appointment of the contractor.

(13) The project works commenced in about November 2007.

(14)During the course of the works Ian Hickey, as architect on behalf of the defender, issued nine formal variations to the contract by way of architects instructions (A.I's). These all refer to the defender as "the employer"

(15)Production 5/12 is architect's instruction 1 dated 21 November 2007.

(16)Production 5/13 is architect's instruction 2 dated 29 November 2007. This included additional work in respect of duplex plasterboard. This instruction added £7,400 to the estimated cost of the project.

(17)Production 5/14 is architect's instruction 3 dated 29 November 2007.

(18)Production 5/15 is architect's instruction 4 dated 20 February 2008. This included additional work in respect of excavating a trench in the driveway for utilities at an estimated cost of £7,800. It also included additional works in forming the car park area at an estimated cost of £4,600.

(19)Production 5/16 is architect's instruction 5, which was superseded by later architect's instructions.

(20)Production 5/17 is architect's instruction 6 dated 21 February 2008 This included additional work in respect of re-roofing , installation of mains water, support to roof beams, velux windows, partitions for shower area, pipework and upgrading fire resistance of ceilings. These works added a total of £18,600 to the estimated cost of the project.

(21)Production 5/18 is architect's instruction 7 dated 21 February 2008 This included additional work in respect of smoke alarms, wiring, door entry systems and floodlights. These works added a total of £4,990 to the estimated cost of the project.

(22)Production 5/19 is architect's instruction 8 dated 27 March 2008 This included additional work in respect of fitting showers, washer/drier units, plumbing, formation of cupboards and storage space, and fitting structural restraint straps in accordance with a structural engineer's advice. These works added a total of £4,980 to the estimated cost of the project.

(23)Production 5/20 is architect's instruction 9 dated 8 May 2008 This included additional work in respect of supplying and fitting new laminate flooring, ceramic tiles and shower screens. It also included dismantling of scaffolding and costs relating to an earlier architect's instruction which were not known at the time of instruction. These works added a total of £8,180 to the estimated cost of the project.

(24)During the course of the works Ian Hickey, as architect on behalf of the defender, issued seven Certificates of Progress Payment (CPP's). These all refer to the defender as "the employer". The purpose of the CPP's was to certify that costs invoiced by the contractor were due and payable by the employer, and to instruct the employer to make payment to the contractor to the value of the certificate.

(25)VAT at 17.5% was due on all payments to be made to the pursuers.

 

(26)CPP certificate 1 (production 5/21) was issued on 10 December 2007 for payment by 24 December 2007. The certified value of work executed and goods on site to that date, exclusive of VAT, was £35,000.

(27)CPP certificate 2 (production 5/22) was issued on 19 December 2007 for payment by 2 January 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £62,840.

(28)CPP certificate 3 (production 5/23) was issued on 30 January 2008 for payment by 13 February 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £102,840.

(29)CPP certificate 4 (production 5/24) was issued on 19 March 2008 for payment by 2 April 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £157,840.

(30)CPP certificate 5 (production 5/25) was issued on 8 May 2008 for payment by 22 May 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £185,000.

(31)CPP certificate 6 (production 5/26) was issued on 5 August 2008 for payment by 19 August 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £194,195.

(32)CPP certificate 7 (production 5/27) was issued on 21 August 2008 for payment by 4 September 2008. The cumulative certified value of work executed and goods on site to that date, exclusive of VAT, was £195,495.

(33)CPP certificate 8 (production 5/28) was issued on 24 November 2008. The final sum certified therein as due to the pursuers for the contract works is £195,495. VAT due thereon amounts to a further £34,211.63. The total is therefore £229,706.63. The pursuers have received payments totalling £207,188.90. The balance due to the pursuers is £22,517.73.

(34)The local authority certificate of completion was issued in July 2008. This allows the property to be occupied.

(35)Production 5/29 is the Practical Certificate of Completion issued by Hickey & Hickey on 24 November 2008. The effect of practical completion is that this is when the employer takes over responsibility for the building from the contractor. The date of practical completion of the works was 10 October 2008.

(36)Production 5/39 is a manuscript "snagging list" dated 5 August 2008 prepared by Mr Hickey. The defects listed therein were carried out prior to the stage of practical completion.

(37)The only outstanding work at the time practical completion was the renewal of defective locks to main door houses.

(38)The defective locks were renewed by the pursuers around the date of practical completion or soon afterwards.

(39)At no stage prior to the acceptance by the defender of the pursuer's estimate did either party raise the issue of a retention. There was no agreement to provide for a retention of the contract price against outstanding works.

(40)The CPP's show a retention of 5% or 2.5%. Hickey & Hickey's computer software did not allow certificates to be issued without showing a retention. This could not be bypassed by Mr Hickey irrespective of the parties wishes.

(41)Had there been an agreed retention, it would have been due for release to the pursuers after 6 months upon issue of a Certificate of Making Good Defects. Such a certificate would have been due on 10 April 2009.

(42)The parties did not agree a completion date for the project. A timescale of 16 weeks had been discussed initially. This could not be achieved for a number of reasons.

(43)The pursuers had to come off site for a period because of late payment by the defender of various sums due.

(44)The project was delayed by utilities suppliers. Scottish Water refused to accept the drainage layout, and insisted on a new drainpipe for the sewer connection. This caused a significant delay from mid May to early June.

(45)Scottish Power required that ducting be removed and a new power supply installed. This contributed to the delay.

(46)There was also a delay with the Gas supply. Scaffolding had been erected for work on the walls of the building and the pipework could not be put in until the scaffolding was removed.

(47)The extra works instructed in Mr. Hickey's A.I's contributed to the timescale of the project being extended. This included slating of the roof, provision of showers, tiling bathrooms, and providing laminate flooring. Works to the driveway were required following the installation of services.

(48)The pursuers did contribute to delay in that they took a trade holiday week at Easter. Mr. Wingate of the pursuers was also on holiday for two weeks during the summer. Work stopped on the site at these times.

(49) No Bill of Quantities had been prepared by a Quantity Surveyor. In providing their quotation, the pursuers had worked from building control drawings provided by the defender.

(50)A.I.'s issued by Mr. Hickey were done so either with the express authority of the defender, or with his implied authority on her behalf as project architect. It was his job to give the instructions for necessary work to be carried out. For items over £2,000 he would always confer with the defender beforehand. For smaller matters he would sometimes obtain the defender's approval retrospectively.

 

FINDS IN FACT AND LAW

1.             The contract entered into by the pursuers was with the defender as an individual.

2.             No provision entitling the defender to withhold sums due to the pursuers by way of retention was incorporated into the contract, either expressly or by implication.

3.             The pursuers completed the contract works within a reasonable period. Any delay, in so far as attributable to the pursuers, did not give rise to a breach of contract entitling the defender to withhold payment of the balance of the sums due to the pursuers.

4.             The costs charged by the pursuers are in respect of works instructed by the defender, or her architect on her behalf, and certified as due and payable in terms of the contract. The escalation in the final cost does not arise as a result of any breach of contract by the pursuers entitling the defender to withhold payment of the balance of the sums due to them.

5.             All snagging items which the pursuers were obligated to rectify in terms of the contract were duly completed, and no deduction for outstanding snagging items falls to be deducted from the sums due to the pursuers.

6.             The pursuers are entitled to payment of the balance of the certified contract price, in the sum of £22,517.73.

FINDS IN LAW

1.      The parties to the contract are the parties to the action.

2.      The pursuers are not in breach of contract.

3.      The defender is personally barred from challenging the certification of her architects, Hickey & Hickey.

4.      The pursuers have completed the works required under the contract and are entitled to be paid therefor.

5.      The sum due to the pursuers is the balance of the amount certified as due by the architects, namely £22,517.73.

THEREFORE sustains the pursuers' 1^st plea-in law to the extent of excluding from probation the defender's averments in the following sentences in Answer 4 at page 8 of the Record: (a) "no carpets or floor covering to the stairs or bedrooms and no lino in the bathrooms, no fridges, were supplied (the pursuers having agreed to supply these items)..", (b) "The pursuers owed a duty to the said development company to provide a realistic tender and to carry out the work with reasonable expedition and reasonably within budget allowing for contingencies", and (c) "The said development company has also suffered inconvenience as a result of the pursuers' actions"; sustains the pursuers' 2^nd, 4^th and 5^th pleas-in-law; repels the pursuers' 3^rd and 6^th pleas-in-law; repels the defender's pleas-in-law; grants DECREE against the defender for payment to the pursuers of the sum of TWENTY TWO THOUSAND FIVE HUNDRED AND SEVENTEEN POUNDS AND SEVENTY THREE PENCE (£22,517.73) STERLING, with interest thereon at the rate of eight per cent (8%) per annum from 10 October 2008 until payment; refuses the pursuers' motion to certify Ian Hickey, architect, as a skilled witness for the pursuers; FINDS the defender liable to the pursuers in the expenses of the action, and allows an account thereof to be submitted to the Auditor of Court to tax and report.

 

NOTE

[1]          This case went to proof before me on 19 May and 17 June 2009. Evidence was given for the pursuers by John Wingate, Steven Hartrupp and Ian Hickey. The defender gave evidence herself, and further evidence on her behalf was given by Alison McCoid. The pursuers were represented by Mr. Grant, solicitor. The defender was represented by Mr. Simpson, solicitor.

Background

[2]          The pursuers are a building company. The defender is a property developer. In about October 2007, the pursuers provided a quotation to the defender for the conversion of a nursery at Marshalls Lane, Paisley into three residential flats. She appointed Hickey & Hickey, architects, Paisley, to protect her interests and supervise the project. Work began in November 2007 and reached the stage of practical completion on 10 October 2008. The pursuers sue for the balance of sums due to them under the contract. The defender maintains that she has no contract with the pursuers, as the contracting party was a Limited company operated by her, namely AA BB CC Properties Ltd. The defender also maintains that no further sums are due to the pursuers in respect that the project overran unreasonably in terms of time and cost, and in any event the contract contained a provision for retention against certain outstanding "snagging" works which were never completed by the pursuers.

With whom were the pursuers contracting?

Pursuers' submissions

[3]          It was submitted on behalf of the pursuers that I should accept that the pursuers were contracting with the defender as an individual. Mr Wingate gave evidence about dealing with the defender throughout. The critical time is at the point of the acceptance of the offer. Even on the defender's own evidence, there was nothing to suggest that at that point she had communicated expressly or impliedly anything from which it could be inferred that she was acting as an agent for a Limited company of which Mr. Wingate was aware. Even on the defender's evidence, the pursuers would not have been aware of the existence of the development company until some time afterwards, which she suggested would be in November 2007.

[4]          The defender explained in evidence that she had instructed Hickey and Hickey as an individual and gave reasons for that, but her evidence was confused. She gave evidence that Mr. Wingate must have known that she was contracting on behalf of the company, but cannot point to any evidence to justify this conclusion.

[5]          Mr Grant submitted that the fact that AA BB CC Properties Ltd had borrowed the money to fund the development was irrelevant. There is sometimes a misunderstanding in people's minds that if money is coming from a third party, a party to a contract is not liable for the obligation, but that is clearly wrong in law. In law, after conclusion of a contract, if a third party is to become an obligant, there requires to be novation. This requires the informed consent of the parties to the contract and release of the party originally bound. Thus the pursuers would have to have been told and understand that they were being asked to deal with the Limited company in lieu of the defender, accept that limited company as the new debtor and release the defender from her obligations under the contract. None of that had happened here, and that is not a case which is pled on Record. Just because the company made a number of payments to the pursuers does not mean that the pursuers accepted the company as the party obligated to make the payments.

[6]          The defender had personally appointed Hickey & Hickey as her architects. They had issued numerous instructions and certificates on her behalf. Throughout, in each and every single one of these, the defender is named as the "employer". In a building contract, the employer is the party on whose behalf instructions are issued and on whom the obligation falls to make payment upon completion.

Defender's submissions

[7]          Mr. Simpson submitted that if the court finds that the defender is not a party to the contract, the pursuers cannot succeed in the present action. He queried whether the pursuers were paying enough attention to the question of with whom they were actually contracting.

[8]          It was also relevant to look at the payment arrangements. Although the first and last payments had been made by the defender as an individual, all the other payments had been made by AA BB CC Ltd. He accepted that he was unable to point to any letter from the company confirming they were to be a party to the contract, but the court had to look at the whole circumstances. The architects certificates and instructions were not conclusive. The defender had the same address as the limited company.

[9]          The court was entitled to have regard to a number of other factors which pointed to the Limited company rather than the defender personally being the contractual obligant. The property at Marshalls Lane was owned by the development company, who had granted a standard security over it. The Clydesdale Bank was providing funding, and their customer was the company, not the defender. The work was for the benefit of the company.

[10]      He referred me to passages from McBryde: The Law of Contract in Scotland, 3^rd ed ("McBryde")at paragraphs 8-22 and 8-23, where it is suggested that contracts do not exist in isolation, and in construing contracts it would be foolish for a court to ignore the circumstances in which the contract was created. It is also stated that the court can have regard to the conduct of the parties at the time of entry into the contract, what the parties said or did at the time, and all relevant contemporary circumstances. I do not consider that these propositions are controversial in any way, and indeed there has been a full inquiry into the circumstances. However, a consideration of all the relevant circumstances does not, in my view, point to the conclusion contended for by the defender.

[11]      Mr Simpson submitted that although the position might not be clear, it was for the pursuers to establish their case on a balance of probabilities. The pursuers would have to accept the consequences if I took that view, as I would be bound to find against the pursuers.

Decision

[12]      The pursuers' submissions are to be preferred. The evidence points overwhelmingly towards the defender as the party bound by the pursuers' contract. I found Mr. Wingate to be credible and reliable in relation to his dealings with the defender. I accepted his evidence that he had not heard of AA BB CC Ltd. at the time of acceptance of his quotation for the work. It is significant that the first payment and last payment, in the sums of £10,000 and £5,000 respectively were made by the defender as an individual.

[13]      The defender is named on all the architects' instructions, certificates and correspondence as the "employer". Mr. Hickey copied all of the documentation to the defender and she did not do anything to contradict or correct this position. Most telling of all was Mr. Hickey's (her own architect) evidence that it was news to him that the propery at Marshalls Lane was owned by AA BB CC Ltd. He had been instructed by the defender as an individual, which is admitted on Record.

[14]      The defender stated that Mr Wingate would have been aware that he was dealing with the development company but was unable to say why he ought to have been so aware. Mr. Grant objected, on the basis of no Record, to a question directed to elicit from the defender whether there was any specific point at which the pursuers became aware that the development company were involved. Mr. Simpson submitted that he should be allowed some latitude to explore this. I allowed the evidence to be led under reservation, and having allowed that matter to be explored, the objection now falls to be sustained. In any event, the defender's evidence which did emerge did not assist her as she was unable to specify any such point in time. She stated that Mr. Wingate would have been aware of the involvement of the company no later than mid November, which of course is some time after the contract was entered into.

[15]      Alison McCoid of Clydesdale Bank gave evidence that the bank were funding the development by advancing funds to AA BB CC Ltd under the comfort of a security over the property. However, it is significant that at no time did she see any contract documentation between the parties.

[16]      On 27 August 2008, the defender signed an irrevocable mandate (5/4) instructing her solicitors to make payment of £5,263.92 to the pursuers from the proceeds of the three residential units at Marshalls Lane. This is signed by the defender and makes no reference to the limited company. Furthermore, her solicitors' covering letter to the pursuers dated 28 August (5/3) enclosing the mandate, is headed up with the defender's name. The opening sentence of that letter states, "We ...would advise that we act for Mrs (sic) Adams in relation to the sale of the three residential units...."

[17]      I did not accept the defender's evidence that pursuers knew they had entered into a contact with a limited company, and I have little difficulty concluding that the defender as an individual is liable to the pursuers.

Did the contract include a provision for retention of sums due against completion of works ?

Pursuers' submissions

[18]      On behalf of the pursuers, Mr Grant submitted that the only appearance anywhere of a reference to a contractual retention of 5% or 2 1/2% was in the CPP's issued by Mr. Hickey. There was no evidence that either of the parties had agreed to, or even discussed, the matter of a retention prior to the acceptance of the quotation.

Defender's submissions

[19]      On behalf of the defender, Mr Simpson submitted that if there was a valid retention, the whole sum would not be due to the pursuers. He accepted however that he was left with Mr. Hickey's evidence which did nothing to support his submission.

Decision

[20]      There was no evidence of any agreement between the parties of a contractual retention, and no sufficient basis to hold that such a condition was implied into the contract by operation of law.

[21]      The explanation from Mr. Hickey for the appearance and calculation of retention figures on the CPP's was simply that his computer software processed this automatically and he could not bypass the sections of the form dealing with retention.

[22]      One feature of a contract is that its terms are made by, and subject to the agreement of, the parties to it. A third party cannot retrospectively import into the contract conditions which are not the subject of consensus between the parties. It was not pled or argued that any such condition had come to be incorporated into the contract by the parties' subsequent course of dealing .

[23]      Accordingly, I prefer the submissions of the pursuers on this point. It has not been established that retention was a condition of the contract.

[24]      In any event, had a retention been agreed this would have involved a six month defects liability period from the date of practical completion on 10 October 2008. Any sums retained under such a provision would have fallen to be released upon completion of outstanding works by 10 April 2009.

Time overrun on the contract?

Pursuers' submissions

[25]      It was submitted that the arguments on delay are muddied by the amount and extent of variations to the contract, and the difficulties in dealing with third party utility suppliers. If the contract has to be completed within a particular time, but is varied, time is at large, and the work falls to be completed within a reasonable time. Mr. Hickey was qualified to give evidence on this matter. He felt that "things had run on a bit", but the job was not unduly late in completion. In any event, no quantification, set-off or counterclaim had been pled to provide a basis for determining how this could be dealt with.

Defender's submissions

[26]      It was submitted that there had been a time period of 16 weeks agreed for completion of the project, but it ran on well beyond that, and the final certificate had not been granted until October 2008. It was accepted by Mr Simpson that the defender was unable to show any loss as a result of delay. However he submitted he was entitled to argue that, although no time scale had been "set in stone", the parties had proceeded on the understanding that delivery of the project in 16 weeks or so would be achieved. This had not happened, and the eventual completion was delayed far beyond then. Accordingly there was a breach of contract by the pursers.

[27]      I was referred to McBryde at paragraph 20-96. where it is stated:

"Whether or not a breach is material is primarily a question of fact. The answer depends on circumstances at the time of the contract and also subsequently. It is not to be decided solely by looking within the four corners of the contract, although what the parties had in contemplation is obviously important. What has happened is also significant."

I was invited to find that no further sums should be found due to the pursuers in respect of the delay.

 

Decision

[28]      I am satisfied from the evidence of the Mr. Wingate and Mr. Hickey that the contract was not subject to an agreed completion date. It was accepted that there had been discussions about a 16 week time scale, and Mr Wingate had given an indication of that on the basis of the drawings he had been provided with. In my view this falls far short of an agreed contractual timescale. I preferred their evidence to that of the defender, who stated that a timescale of 16 weeks had been agreed.

[29]      In any event, as Mr Grant pointed out, there were numerous variations and difficulties with third parties which conspired to extend the duration of the contract. Once the contract was varied, then any original agreed completion date would cease to apply, and completion would be due within a reasonable period having regard to the circumstances.

[30]      Although the pursuers and Mr Wingate himself had been off site for a few weeks during Easter and Summer holidays, that did not seem unreasonable to me. Mr. Hickey felt there was only a slight delay so far as the pursuers were concerned, and the main difficulties related to unforeseen difficulties with Scottish Water, Scottish Power and Scottish Gas.

[31]      Scottish Water insisted on a new drainage layout. Scottish Power required new ducting, the removal of the previous supply and installation of a new one. There were difficulties with Scottish Gas putting in pipework, and with scaffolding in the way at the time.

[32]      Further works instructed on behalf of the defender as employer included re-slating of the roof, provision of showers, tiling bathrooms and providing laminate flooring. Works to the driveway had also to be undertaken.

[33]      Mr Hickey felt the utilities were all slow and were difficult to move on. Although the works did drag on, he did not criticise the pursuers for any significant contribution to the delay. He thought the difficulties could not have been foreseen, and an indication of a 16 week timescale was in any event somewhat optimistic.

[34]      For these reasons I am of the opinion that the pursuers are not in breach of contract in relation to the timescale for completion of the works.

Cost overrun on the contract?

Pursuers' submissions

[35]      The pursuers' submission was that the purpose of Mr. Hickey's appointment as architect was to tell the contractor what to do from time to time as reflected in the A.I's, and to issue certificates of value so that payment of the contractor's accounts could be paid and vouched to the bank. All of these matters were conceded in cross examination. The defender reluctantly accepted Mr Hickey's evidence about the extensive instructions varying the work according to the A.I.'s.

[36]      The architect duly issued payment certificates in the exercise of his professional responsibility to protect the defender's interests. When in doubt he would refer to a Quantity Surveyor. Mr. Hickey, with the benefit of such further advice as he took, was obviously satisfied that the work had been properly instructed and was due for payment or he would not have issued the certificates. The CPP's are standard documents which are perfectly clear and understood by everyone dealing with building contract documentation.

Defender's submissions

[37]      Mr. Simpson argued that although the intitial quotation was an estimate, that had to be reasonable. The price was not "set in stone", but the quotation letter had to be given important weight. That only estimated £130,000 plus VAT, and an allowance of £15,000 for the other specified matters referred to at paragraphs (a) to (g) of the letter.

[38]      He submitted that there was a gross overrun in costs between what was quoted to the defender at the outset and the eventual figure now being claimed. This was not the fault of the defender. He accepted that the overrun may not be the fault of the pursuers, but in order for the court to make a finding that the pursuers were in breach of contract there did not need to be any such fault. He referred me in this connection to McBryde at paragraph 20-88, wherein the learned author quotes from Lord Neaves in the case of Gregory v Hill (1869) 8 M 282 at page 288 as follows:

"An action for breach of contract does not necessarily imply blame; it merely assumes that the party sued has contracted to do something which he has failed to do, and is therefore liable in damages for non-fulfilment."

[39]      Although he did not suggest the quoted figures had to be adhered to "slavishly", the pursuers ought to have taken more care in preparing the estimate. The defender had been presented with a fait accompli, and he questioned whether she really did have a choice about the extra costs involved. The issue was whether the pursuers were entitled to pass on these additional costs to the defender. At what point, he argued, is a person penalised for something outwith her own control? For example, the pursuers could have put in a caveat about the building being old.

Decision

[40]      This was a contract where the pursuers quoted for a project on the basis of drawings which had been prepared for building warrant purposes. According to Mr. Hickey, they were not sufficiently detailed to give the contractor all the technical information he needed. Mr Wingate had to visit the site and was in regular contact with him over technical queries.

[41]      Mr. Hickey was appointed by the defender to instruct works and issue certificates for payment on her behalf. His evidence was that he issued architects instructions for work which had to be done, either with the express authority of the defender, or with his implied mandate on her behalf as architect in charge of the project. He considered all the contractors' invoices and validated them only after going on site, ensuring that the work had been done, and satisfying himself that the charges were fair and due for payment. On occasions he would confer with a Quantity Surveyor to confirm values he was not sure about. Where larger sums were concerned, he would always confer with the defender beforehand. He would then issue the CPP's to the defender instructing payment.

[42]      In my opinion, in a question between her and the pursuers, it is not open to the defender to challenge the validity of the certificates issued by her own architect. If I am wrong about that, there is in any event no factual basis upon which any challenge could succeed.

[43]      In my opinion, based on the evidence of Mr. Hickey, the additional works which led to the escalation of costs were unforeseeable. Furthermore, they were authorised by the defender, instructed by her own architect, carried out by the pursuers and certified by Mr. Hickey as due for payment.

[44]      For these reasons, I prefer the pursuers' submissions. I am unable to conclude that the pursuers were responsible for the escalation in costs as the job progressed, or that the difference in costs between the original estimate and the final figure is due to a breach of contract on their part.

[45]      Against the foregoing background of the facts I have found to be proved, there is no room for a duty upon the pursuers "to provide a realistic tender and to carry out the work with reasonable expedition and reasonably within budget allowing for contingencies" as is averred in answer 4 at page 8. These averments are irrelevant and fall to be excluded.

Snagging Items

Pursuers' submissions

[46]      The manuscript snagging list 5/39 containing a number of outstanding items was issued by Mr. Hickey on 5 August 2008. On 10 October 2008, the only outstanding snagging item noted by Mr. Hickey on the certificate of practical completion 5/29 was "renew defective locks to main house doors". Mr Wingate and his joiner, Mr Hartrupp, confirmed these items had all been completed; although Mr Hartrupp was clearly muddled about the date when the door locks had been repaired.

[47]      The defender disputed this, but no quantification or vouching has been provided. The specification is far too vague and unsubstantiated and falls to be ignored. The defender, on her own admission, did not give the pursuers intimation that any other works were outstanding. It follows that the pursuers have therefore not been given any opportunity to undertake any other snagging work.

Defender's submissions

[48]      The defender's explanation for not allowing the pursuers to complete the snagging was that, by then, court action had been raised. However, Mr Simpson accepted that this was an argument which might not find favour with the court. Nevertheless there were outstanding matters which the pursuers had not completed. The locks had not been attended to. The pursuers had agreed to provide carpets and had not done so.

[49]      I was referred to a passage in McBryde at paragraph 20-104, where it is stated:

"On a material breach there is not an automatic termination or cancellation of the contract. The "innocent party" may or may not continue with performance of the contract. With any breach other than a trivial breach, the innocent party may withhold performance until the party in breach performs. That is the result of the mutuality principle".

If the breach was material, the defender was justified in not looking to the pursuers to perform the contract. Otherwise, the defender was at least entitled to withhold payment until the pursuers had fulfilled their obligations.

Decision

[50]      It is clear from the certificate of practical completion issued by Mr Hickey that, as at 10 October 2008, the only outstanding matter was the renewal of the door locks. I accepted the evidence of Mr Wingate and Mr Hartrupp that the locks were attended to. Mr Wingate stated that this was done more or less contemporaneously with the issue of the certificate on 10 October.

[51]      In relation to other outstanding matters, the defender avers in Answer 4, that there remained a number of snagging items after the issue of the practical certificate of completion. She further avers that other tradesmen had to be employed due to the breakdown in her relations with the pursuers. In addition to the door locks, she avers that all doors had to be re-fitted, all the properties had to be re-cleaned, and the re was an unresolved water leak and a defective radiator. According to her own position on Record and her evidence, she had not asked the pursuers to undertake the work, or even told informed them of these other matters. The pursuers cannot be faulted for failing to put things right of which they were not informed. They ought to have been given the opportunity to address these matters themselves. As this did not happen, I therefore find that that the defender has failed to establish that the pursuers are in breach of contract in respect of uncompleted snagging works. I am unable to hold that any deduction from the sums due to the pursuers should be made in respect of snagging works.

Carpets, lino and fridges

[52]       In Answer 4, at the top of page 8 of the Record, the defender avers that "...no carpets or floor covering to the stairs or bedrooms and no lino in the bathrooms, no fridges were supplied (the pursuers having agreed to supply these items)...". Mr Simpson submitted on behalf of the defender that the cost of these items should be deducted from the sums due to the pursuers. Productions 6/8 and 6/9 are receipts from J & W Carpets. Mr Grant, for the pursuers, argued that these averments were irrelevant in respect that nowhere was it explained how the pursuers came to agree to such provision.

[53]       The pursuers' submission is well founded. These averments are vague and only partially vouched. There are no averments as to the manner in which the pursuers became obliged to provided these items. Indeed the original quotation letter 5/5 specifically states that no allowance in the estimated cost has been made for any of these items, so the pursuers clearly envisaged that these would be extra items the defender would have to pay for.

[54]       Accordingly, these averments are irrelevant and fall to be excluded.

Inconvenience

[55]       This matter can be dealt with briefly. The defender avers in answer 4, towards the bottom of page 8 of the Record, that "the development company has also suffered inconvenience as a result of the pursuers' actions". Mr. Grant took objection to a question put to the defender designed to elicit evidence of inconvenience. I allowed the evidence to be led under reservation, which amounted to an assertion of "terrible inconvenience and hardship". The defender stated that it was a very stressful time, and the delay in completing the project had caused her to have to pay additional interest in respect of the company's borrowings.

[56]       Mr. Grant argued that the averments of inconvenience were too vague and inspecific, and in any event the defender avers inconvenience to a limited company, and indeed a party which is not a party to the action.

[57]       Mr Simpson accepted he was in difficulties in relation to this chapter of his case.

[58]       I will sustain the objection and will further hold that the averments are irrelevant and lacking in specification, and so fall to be excluded.

Parties Closing submissions

Pursuers' submissions

[59]      In closing his submissions on the evidence, Mr Grant invited me to sustain the pursuers' plea-in-law 1 (in part), and numbers 2,4, and 5; to repel pleas-in-law 3 and 6; and to repel the defender's pleas-in-law.

Defender's submissions

[60]      In closing his submissions on the evidence, Mr. Simpson invited me to sustain the defender's plea-in-law 1; failing which, plea-in-law 2; and to sustain plea-in-law 3. In relation to plea-in-law 4, he made it clear that he was restricting this to the matters of inconvenience, the floor coverings and the mandate.

[61]      He further submitted that if I were to find that the sum sued for is due and payable, I should reduce that amount by the sum covered by the mandate 5/4 (£5,263.92). The mandate held by the defender's solicitors was "almost a guarantee of payment" It is irrevocable . The pursuers had no need to seek a decree for that part of the sum as their position was secure. I am able to dispose of this submission shortly as it seems to me to be plainly wrong, and overlooks that the mandate is conditional and unrestricted in time. In my opinion the pursuers are plainly entitled to the decree they seek now, and ought not to have to await the occurrence of uncertain future events.

Decision

[62]      My decision is as set out in the interlocutor. My reasons are as set out in this Note.

Certification of skilled witness

[63]      Mr. Grant moved me to certify Mr. Hickey as a skilled witness. Mr. Simpson submitted that Mr. Hickey was principally a witness to matters of fact. I prefer the defender's submissions on this point. Although Mr. Hickey, as an architect, was clearly a skilled person, he did not require to carry out further investigations prior to the proof to qualify him to give evidence. He was essentially a witness to matters of fact observed by him as the contract progressed. Accordingly, I shall refuse the motion to certify Mr. Hickey as a skilled witness.

Interest

[64]      Mr. Simpson submitted that the action had been raised somewhat prematurely, in September; whereas the certificate of practical completion did not take effect until 10 October 2008. Also, the original sum sued for has been slightly reduced by amendment, but he accepted that this might not have made a difference.

[65]      In the circumstances, I am prepare to accept the defender's argument to the extent of awarding interest on the decree from 10 October 2008 rather than the date of citation.

Expenses

[66]      Both parties were agreed that expenses should follow success. The pursuers are accordingly entitled to the expenses of the action.