On too great expectations

The judge said: “He seemed to me to be an old‑fashioned builder who found the defendant – as a professional, assertive woman – rather difficult to deal with when things were not going well and, as a consequence, tended to avoid doing so.” No, no, this is not a story about family law, husband and wife falling out. It’s an ordinary, everyday story about an £85,000 house extension, which I have seen repeated time and time again. The judge added: “I don’t think that the building company particularly covered itself with glory on this contract, but equally I do not accept that its performance was anything like as bad as the defendant contended.” The upshot is that the builder cleared off before completing the works and wanted his balance of account. It was, according to the judgment (Cartwright Pond Ltd vs Ms Louise Wild [11 June 2021] TCC), “a project that drifted for far longer than it ought to have done until it was brought to an acrimonious and unsatisfactory end”. Ordinary, ever so ordinary!

The builder’s account claimed for the works done, the umpteen variations, and compensation for being booted off site and loss of profit. His customer claimed for defects, for additional costs for completion by others, for late completion liquidated damages and for being obliged to live in a tent. She hinted at loss of earnings too.

Some years ago, a pal of mine decided to put an extension on his house. He got himself an architect, even a structural engineer. His team drummed out the drawings and specification. He went out for bids. He then asked me what to be careful about. My unhelpful advice: double the time the builder says it will take, and add 50% to the price in the contract. My pal was very happy at the end of the day; he got exactly what he and I expected.

The serious and sad mistake in the story above is that the client really did expect the works to take the contracted 14 weeks and move in on the due date of 12 October. According to my rule of thumb, Ms Wild would get her house back at about the end of January. By then our builder apparently felt so badgered by the client that he became a tad fed up. Ms Wild, said the judge, was “perfectly pleasant and genuine and had clearly convinced herself that she was the wronged party throughout”. The judge was not so convinced, however.

In hindsight her first mistake was deciding not to appoint her architect as contract administrator and instead to deal with the builder herself. She then overlooked arranging the RIBA Home Contract document. Then, oh dear, she began changing things. You and I call them variations. Varied works are the bane of the building industry. The builder agreed he was in delay; it was, he said, 11 particular variations that had caused disruption.

If that architect had still been on board, they would have quietly explained to the client that the builder was doing his best. by now, on this job, it is likely the builder believed he was being bullied

He started on site on 9 July. Complaints about progress started in the September. But by this time there had already been a significant number of variations – a total of 27 by 6 September! It was “true”, said the judge, “that the overall increase in value of the contract works was relatively modest […] nonetheless these changes had a cumulative impact in terms of programming”. For example, the instruction of a new Velux window had a more general disruptive effect in terms of labour planning and allocation.

The variations continued. Ms Wild, who is an IT consultant, apparently had little experience of the pain in the neck that such multiple variations tend to cause, or of their detrimental effect on progress. The builder, on the other hand, was of course used to such disruption. It’s the way of things in the industry. I suspect he shrugged, and was unsympathetic. He knew, I presume, that his programme had soon become redundant and he simply worked hand to mouth.

If that architect had still been on board, I bet they would have quietly explained to the client that the builder was doing his best in the face of trying to give the customer what she wanted. Some, even most, architects are good at calming the client down. By now, on this job, it is likely that the builder believed he was being bullied.

The judge had then to decide whether it was the builder or the customer who had announced to the other: “Clear off – I’ve had enough!” Ms Wild said that progress was so bad that the builder was no longer willing to complete. The builder accused Ms Wild of preventing him from completion. The judge decided that Ms Wild was not entitled to make a complaint of repudiation. Rather, the builder had barked the word at her and said he quit. The judge then had the task of evaluating the works done and all the variations … precisely the adjudicators’ everyday job, and he did his best, saying he would not deal with each and every item in detail because “the total sums in dispute would require a disproportionate amount of time”. In the end he ordered Ms Wild to stump up £51,000 to the builder.

There is a final item not mentioned in the judgment. It is the question of who pays for the legal costs of a five-day trial. Ms Wild lost. At worst she will be liable for her opponent’s legal fees and court costs. My guess is these will top £100,000.

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple