Cometson & Anor v Merthyr Tydfil County Borough Council & Anor

A local authority administering a building-repair scheme may contract with participating owners to organise and supervise the works without assuming the obligations of a main building contractor. The contractual scope depends on the documents and surrounding circumstances. Where the authority supplies organisational services in the course of business, Supply of Goods and Services Act 1982, sections 13 and 14, imply terms requiring reasonable care and skill and performance within a reasonable time. Those terms concern the service of arranging the works, not the quality, progress or completion of the building works themselves.

The claimants owned shops and a flat in property included in a repair scheme arranged by the first defendant local authority and carried out by the second defendant contractor. They alleged that the authority had contracted to procure building works of proper quality and within a reasonable time, and claimed damages for defective works and consequential loss.

The preliminary issue was the nature and extent of the contractual relationship created by the Scheme Consent Form and Agreement to Pay dated 8 November 2004, including whether the authority was responsible for the contractor’s performance.

1. The documents dated 8 November 2004 had contractual effect. They required the claimants to participate in the scheme, permit the works to be carried out and pay the specified contribution to the Council. The Council also undertook contractual obligations.

2. The Council was not acting as the claimants’ agent in entering into the building contract. That contract was between the Council and the contractor. The claimants were not parties to it and were not undisclosed principals.

3. Reading the documents with the surrounding circumstances, the Council undertook to organise the implementation of the scheme, including arranging and supervising the works to the claimants’ property. The Council did not undertake responsibility for procuring the works so as to be liable for their quality and progress as a main contractor with the builder as subcontractor. Such a wider obligation was unnecessary to make the arrangements work and would impose substantially more onerous liability.

4. The contractual service was the organisation of the building works, including supervision of the contractor. The works themselves were not the service supplied by the Council.

5. Under sections 13 and 18 of the Supply of Goods and Services Act 1982, the Council was required to provide that service with reasonable care and skill. Under section 14, the service had to be performed within a reasonable time. These implied terms did not require the Council to carry out the building works, or make it responsible for the contractor’s workmanship or the time taken by the works.

6. The pleaded terms concerning proper workmanship, satisfactory materials, completion of the works within a reasonable time, compliance with regulations, improvement of the premises and the remedying of defects were not implied. The parties were to consider whether the claimants needed to amend their pleading to identify any breach of the contractual obligations found.