The recent case of Struthers v Davies (trading as Alastair Davies Building)  places emphasis on the importance of expert evidence in a case where homeowners were seeking recovery from a former building contractor of the additional costs incurred in completing and remedying works following termination of a building contract.
The claimants, Mr and Mrs Struthers, brought a claim against their former building contractor relating to building works carried out at their home. The building contract was entered into around 31 March 2015 and the contract price was £150,000 + VAT.
There was a provision in the building contract allowing for a notice of termination to be issued by the claimants if the building contractor was in a relevant default, with the contract setting out a specific procedure to be followed. The claimants sent a notice of termination to the building contractor dated 11 January 2016.
Whilst the contractual termination in this case was not valid as the correct process was not followed, the court nevertheless found that the termination notice was the claimants’ acceptance of repudiatory breach by the building contractor, entitling the claimants to terminate the building contract.
The court found that the defendant building contractor had carried out no further work after 10 December 2015. The judge was satisfied that as at 10 December 2015 and if not then, certainly by 11 January 2016, the defendant had abandoned the works in the sense of his refusal to perform the contract and had given up any attempt to comply with his obligations to continue and complete the works.
The judge had no hesitation whatsoever in concluding that the defendant was in repudiatory breach of the contract with the claimants as at 11 January 2016 at the latest. In addition, the judge accepted that the defendant’s approach to work on site was a failure to regularly and diligently progress the works and was in no doubt in this case that this was also a repudiatory breach.
There were some notable points in the judgment relating to the behaviour of the claimants, which the judge found to be reasonable and sensible, and the behaviour of the defendant, which the judge was less than impressed with. The court’s overall impression was that the failures by the defendant were self-caused and not failures for which the claimants were at all responsible.
The importance of expert evidence
The judge was of the view that the parties’ respective expert evidence was key to the determination of this case because the majority of issues between the parties as to the existence and extent of defects and incomplete works, including the amount attaching to the same, required expert input.
One of the most significant issues between the parties was whether it was necessary to demolish the extension built by the defendant and reconstruct the foundations and steelwork. The judge accepted the claimants’ expert evidence as to the inadequacy of the work done by the defendant.
Even if the defects which existed in the defendant’s work did not necessitate the demolition or rebuild of the extension (which was contrary to the judge’s view), the judge agreed with the claimants that the relevant question as a matter of law was whether the claimants in relying on the opinion of their expert had failed to act reasonably or mitigate their loss.
The relevant principle of law is as set out in the judgment of HHJ Newey QC in the Great Ormond Street case where Judge Newey QC said “The plaintiff who carries out either repair or reinstatement of his property must act reasonably. He can only recover as damages the costs which the defendant ought reasonably to have foreseen that he would incur and the defendant would not have foreseen unreasonable expenditure. Reasonable costs do not however mean that the minimum amount which with hindsight it could be held would have sufficed. When the nature of the repairs are such that the plaintiff can only make them with the assistance of expert advice the defendant should have foreseen that he would take such advice and be influenced by it”.
The judge found that the claimants’ decision to demolish and reconstruct the extension was necessary and appropriate and in any event was not an unreasonable decision to take on proper expert advice.
The judge preferred the evidence given by the claimants’ expert. The claimants’ expert had visited the site several times before and during the carrying out of the remedial works and thus had first-hand knowledge of the state of the project. The judge found the defendant’s expert evidence at times positively unhelpful, lacking in persuasive weight and there were doubts cast on his impartiality. The claimants’ expert clearly set out his figures and supported them with objective reasoning and his own expertise, whereas the defendant’s expert’s figures were less than transparent.
In respect of works which were incomplete, as far as issues of mitigation and reasonableness were concerned, the court reiterated that the position of the claimants’ expert was to be preferred to the defendant’s. The judge found that reference to the original costs of the building contract was of little assistance and that the claimants were not to be criticised for a lack of competitive tendering. The judge acknowledged that it is well known that the costs of completing another person’s work can often, if not always, be much higher than the work would have cost had the original person completed it. The question was whether the completion costs incurred by the claimants were objectively reasonable and the court was satisfied on the basis of the claimants’ expert evidence that they were.
The claimants were awarded damages in respect of the defective work and completion costs, other losses consequent on termination as well as liquidated damages for delay and general damages for inconvenience and suffering. The total awarded to the claimants was £349,913.67, which included approx. £60,000 worth of credit given to the defendant for an unpaid part of the contract price and a prior settlement with another defendant.
The case highlights the importance of obtaining expert evidence when undertaking remedial works following the termination of a construction contract. Where substantial and costly remedial works are required, expert involvement at an early stage may subsequently assist in persuading the court that the option taken and the associated costs incurred are reasonable in all the circumstances.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.