Tombs v Wilson Connolly Ltd.

A contractual payment becomes enforceable according to the agreed payment regime, including any contractual period allowed for payment. A contractor cannot treat non-payment as repudiatory before the contractual final date for payment, particularly where the application is invalid or remains subject to proper checking.

Where a contract permits suspension for non-payment, the contractual or statutory notice requirements must be observed. Failure to do so may itself amount to repudiation. A single unpaid interim payment will not ordinarily constitute repudiation. Loss-of-profit damages require proof that the particular work which was not completed would probably have produced an actual profit.

Mr Tombs, a bricklaying sub-contractor, claimed payment for work and damages for alleged repudiation of several sub-contracts by Wilson Connolly Ltd. The defendant denied liability, alleged that Mr Tombs had repudiated the contracts by withdrawing his labour, and counterclaimed for defective brickwork and inadequate wall ties at properties in Pine Lea, including the Bull property.

The court determined the operative contractual terms, the effect of a payment made by the defendant, the alleged repudiations, the loss-of-profit claim, the contractual wall-tie requirements, and the proper measure of remedial damages.

1. The sub-contracts incorporated WCL’s new short-form terms and conditions. The written acceptance preceded the later confirmatory order, so the old conditions printed on the order were not incorporated. The case was therefore not a true battle of the forms of the kind discussed in Butler Machine Tool v Ex-Cell–O Corporation [1979] 1 WLR 401.

2. The £7,872.68 payment had to be credited against the agreed value of outstanding work. The sum due to Mr Tombs before the counterclaim was therefore £26,847.90.

3. The Caldecote applications were invalid because they did not comply with clause 31. In any event, clause 39 allowed WCL 14 days from receipt of a valid invoice to make payment. The applications dated 27/28 March 2003 were not payable by 7 April 2003, so WCL was not then in breach.

4. Mr Tombs’ withdrawal of labour was unjustified and amounted to wrongful repudiation, which WCL accepted by engaging others to complete the work. The decision to allocate new plots to another sub-contractor was mutual and did not cause the withdrawal. The court distinguished Sweatfield Ltd v Hathaway Roofing Limited (1997) CILL 1235.

5. Even if non-payment had been a breach, one unpaid interim instalment would not ordinarily amount to repudiation. Further, the statutory payment and suspension regime required seven days’ notice before suspension. No notice was given. This provided an additional reason why the withdrawal was wrongful.

6. The loss-of-profit claim failed. It wrongly included work on plots not yet started, and there was no evidence that the completion work would probably have produced an actual profit. The claimed 17 per cent margin was unsupported by the accounts.

7. The contractual wall-tie requirement was varied by an instruction to install 2.5 ties per square metre with ties in the vertical studs at 600mm spacing. The bricklayers failed to comply even with that less onerous specification. WCL recovered £25,092.62 for remedial wall-tie works.

8. The brickwork at the Bull property was defective. Demolition and rebuilding of the outer brick skin were reasonable. The court rejected arguments based on inspection failures, alleged employer fault, and lack of an opportunity to undertake remedial work. Following Pearce and High Ltd v Baxter [1999] BLR 101 and William Tomkinson v Parochial Church Council of St Michael [1990] CLJ 319, denial of an opportunity to remedy affected the measure of loss, not liability. The recoverable sum was £56,112. The principle in Great Ormond Street v McLaughlin and Harvey [1987] CLJ 245 was distinguished.

   After set-off, judgment was entered for WCL in the sum of £54,356.72. Interest and costs were left for further determination if not agreed.