Skinner v Crest Nicholson Residential (South) Ltd.

A contract to build and sell a house ordinarily contains an implied term that the house, when completed, will have been constructed in a good and workmanlike manner. It does not ordinarily impose an accrued right of action for every defect occurring during construction. A contractual reference to specifications and drawings must be construed in its documentary and contractual context. Where the contract permits reasonable variations which do not diminish the property’s value, an alternative remedial construction will not breach the contract merely because it differs from the originally contemplated method. The relevant question is whether the completed house satisfies the contractual standard and whether any permitted variation has diminished its value.

The claimant contracted to purchase a house under construction from the defendant, a residential developer. Damp-proofing defects were discovered in the terrace containing the house. The defendant applied a proprietary internal tanking system and constructed protective inner walls. The claimant contended that the remedial works departed from the contractual drawings and specification, diminished the property’s value, and meant that the house would not be completed in a good and workmanlike manner. He treated the defendant’s refusal to undertake further works as repudiatory, declined to complete, and claimed damages. The defendant denied repudiation and counterclaimed for the unpaid balance of the contractual deposit.

1. Implied term. The proper term to imply was that the house, when completed, should have been constructed in a good and workmanlike manner. It was not a term that every departure from good workmanship during construction immediately accrued as a cause of action. The authority of Lintest Builders Ltd. v Roberts (1980) 13 BLR 38 concerned a contractor’s obligations under a JCT 1963 building contract and did not govern this contract.
2. Contractual documents. Clause 3.2, construed against the Legal Handbook supplied before contract, referred only to specifications and drawings intended to be, and actually, provided to the purchaser in the Home Manual. The CSI drawing showed the perimeter walls conventionally. It was not a construction or engineering drawing and did not require the originally contemplated damp-proofing construction.
3. Permitted variation. The remedial tanking scheme therefore did not vary or alter a specification or drawing to which clause 3.2 applied. Alternatively, if it did, it was permitted because the evidence did not establish any diminution in the value of the house. The claimant’s valuation evidence was rejected. The remedial works did not materially impair the accommodation, its use or function, or its market value.
4. Workmanship and outcome. The evidence of the structural waterproofing expert established that the Hey’di system had been satisfactorily applied, that the risk of damp rising to the floor joists was remote, and that the remaining concern did not make the completed house unworkmanlike. The defendant had not repudiated the contract. The claim was dismissed. Judgment was entered for the defendant on the counterclaim for £19,250, with interest. The defendant was declared discharged from its obligation to sell, and the claimant forfeited the deposit already paid.

First-instance judgment in the High Court (Technology and Construction Court). No prior appellate decision is stated in the judgment.