Hayes (t/a Tudor Rose Windows) v Stewart & Anor

In a contract for building or installation work, defective or incomplete performance amounts to repudiation only where, having regard to the contract and all the circumstances, the breaches are sufficiently grave to show that the contractor does not intend, or cannot, substantially perform. The threshold is especially demanding where the employer ends the contract before the contractor has had the usual opportunity to rectify defects. Conduct such as refusing access and rejecting an offer to complete may itself evince an intention to terminate. Even where termination is unjustified, entitlement to the contract price cannot be determined without resolving material disputes about defects, value, rectification and set-off. Liability may therefore be upheld while quantum is remitted for retrial.

Hayes (t/a Tudor Rose Windows) v Stewart & Anor concerned a contract to supply and fit windows and a door and to replace exterior fittings at the defendants’ home. The work began late and was left incomplete. The defendants treated the contract as ended, relying on delay, alleged abandonment and defective workmanship.

The Burnley County Court gave judgment for the claimant for £5,850 plus interest and dismissed the counterclaim. The defendants appealed, challenging the finding that they had terminated the contract, the court’s treatment of the alleged defects, and the award of the contract balance without resolving the expert evidence. The central issues were liability for termination and whether the amount payable required further determination.

Lady Justice Hale gave the leading judgment, with Lord Justice Simon Brown agreeing. The appeal was allowed only on quantum. The finding that the defendants, rather than the claimant, had brought the contract to an end was upheld.

1. Termination by conduct. The trial judge was entitled to find that the defendants’ refusal to permit further work, their letter of 3 December, the subsequent telephone conversation and their later correspondence objectively evinced an intention to bring the contract to an end. The claimant’s attendance to continue the work and later proposal to complete it showed that she had not abandoned the contract.
2. Defective work and repudiation. The court proceeded on the common ground that a party alleged to have repudiated a contract may later rely on a defence not advanced at the time, subject to the possibility of rectification and estoppel. However, omissions or bad workmanship during performance ordinarily do not amount to repudiation unless, having regard to the construction of the contract and all the facts and circumstances, their gravity shows that the contractor does not intend or cannot substantially perform. That was a substantial hurdle here because the contract had been ended before the claimant had the normal opportunity to remedy defects. The alleged defects did not justify a retrial on liability.
3. Quantum. The judge had not resolved the material dispute between the experts. The evidence accepted the existence of many defects, but differed on their significance and on the value of the work completed. Other issues included whether some work had been agreed to be covered rather than replaced. Those matters could affect the claimant’s entitlement to the contract balance and any counterclaim or set-off. A retrial confined to quantum was therefore required.

The matter was remitted to the county court before a different judge. It was not to be relisted until the parties certified that legal negotiations or alternative dispute resolution had failed. The order for costs below remained. There was no order for costs on the appeal, subject to detailed assessment, with the appellants’ costs assessed under the legal aid scheme.

• Court of Appeal (Civil Division) — The appeal was allowed on quantum only. Liability was upheld and the quantum issues were remitted for retrial.
• Burnley County Court — On 15 May 2001, His Honour Judge Appleton gave judgment for the claimant for £5,850 plus interest and dismissed the counterclaim.