HDK Ltd (t/a Unique Home) v Sunshine Ventures Ltd & Ors

A building contract is not repudiated merely because work is delayed, incomplete or affected by minor defects. Repudiation requires conduct objectively evincing an intention no longer to be bound. Where an original completion date has been waived, a notice making time of the essence must clearly state what must be done, specify a reasonable date for compliance and make clear that failure will result in termination. A client who wrongfully terminates before completion cannot generally claim damages for incomplete or defective work which the contractor would have been obliged to complete or rectify. Minor defects ordinarily form part of the final snagging process. A contractor claiming further payment must prove the contractual entitlement and the value of the work performed.

The claimant company was mistakenly used to bring claims concerning three building projects, although the contracts had been made by Hussein Kurdieh, who was subsequently joined as a third party. The original claim was struck out, leaving the defendants’ Part 20 claims and Mr Kurdieh’s counterclaims.

The disputes concerned works at a flat, a nursing home and a house. The court had to determine the contractual parties and terms, whether the contracts had been repudiated or validly terminated, the consequences of incomplete or defective work, and whether any further sums were due to Mr Kurdieh.

1. Claims and counterclaims dismissed. The claims by Sunshine Ventures Ltd and Rashmi Thakar against Mr Kurdieh failed. Mr Kurdieh’s counterclaims for further payment also failed.
2. The evidence did not establish that the alleged regular fortnightly payment arrangements had been agreed. The original completion dates for the flat and nursing-home works had been waived, but the contracts continued in force.
3. The communications requesting completion urgently did not make time of the essence. A valid notice had to make clear the consequences of non-compliance and, at least ordinarily, specify the date by which compliance was required. The communications were appeals to complete promptly and did not threaten termination.
4. The termination letter concerning the flat works was itself a repudiation. The alleged abandonment was not proved, the defects were not sufficiently serious to evince an intention no longer to be bound, and the other complaints did not establish repudiatory breaches. There was no general implied contractual term of good faith and fidelity in this ordinary commercial building contract.
5. The nursing-home contract was also wrongfully terminated. The client could not complain in damages about incomplete or defective work at the date of wrongful termination. Building work ordinarily had to reach the required standard at completion, with minor disconformities capable of being addressed during final snagging. The defendants also failed to mitigate by giving Mr Kurdieh an opportunity to remedy alleged defects.
6. Mr Kurdieh had to prove any entitlement to payment beyond sums already received. The court assessed the flat works, as varied, at £36,650, but could not establish the agreed scope or price of the nursing-home works sufficiently to support a further award. The evidence likewise did not establish a further entitlement for the house works.

not stated in the judgment.