AJ Building and Plastering Ltd v Turner & Ors

Consumer contracts must first be construed by ordinary principles, including consideration of relevant background and commercial common sense. The consumer-favourable rule in regulation 7(2) of the Unfair Terms in Consumer Contracts Regulations 1999 operates only as a tie-breaker where construction leaves genuine doubt. A mandate signed by an insured householder permitting an insurer-appointed contractor to carry out approved remedial works does not, without clear language and context, make the householder primarily liable for the insured cost. The householder remains liable for the policy excess and authorised work outside the insurance cover. Payment by the insurer to an intermediary in the contractual payment chain discharges liability for the insured works.

The claimant building contractor carried out remedial works at three insured properties after Zurich instructed Rok, which subcontracted the works to the claimant. Zurich paid Rok, but Rok entered administration before paying the claimant. The claimant sued the householders, relying on signed “Works Authority & Mandate” documents as creating direct obligations to pay the full cost.

The defendants disputed that construction and raised further arguments based on consumer-contract interpretation, misrepresentation, cancellation rights for contracts made in the home, and unfair commercial practices. The central issues were the true meaning of the mandates, the effect of payment by Zurich to Rok, and whether the additional statutory defences applied.

1. The claims were dismissed. The mandates did not make the householders liable for the insured cost of the remedial works. Their payment obligations were limited to the policy excess and additional works authorised by them but not covered by insurance.
2. The mandates had to be construed objectively in their factual context. Relevant matters included that Zurich had approved the works, the claimant had been selected through the insurer’s arrangements, the householders had not agreed or been told the price, and the works document stated that the cost was “met by insurer”. The word “employ” did not itself determine the scope of the payment obligation.
3. The ordinary principles of construction applied. Regulation 7(2) of the Unfair Terms in Consumer Contracts Regulations 1999 had the same practical effect as the contra proferentem rule and operated only where ordinary construction left genuine doubt. It was unnecessary to invoke that tie-breaker.
4. Payment by Zurich to Rok discharged the householders’ liability for the insured works. The commercial purpose was that the insurer would settle the approved claim by arranging and paying for the works.
5. The cancellation argument succeeded against Mrs Munday. Her contract was concluded when she handed the signed mandate to the claimant’s representative during a visit to her home, and was unenforceable because the required cancellation notice had not been given under regulation 7 of the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008. The point did not assist Miss Turner, whose mandate was concluded by post, and was abandoned as against Mr Dalling.
6. The alleged misrepresentation was not pleaded and could not be relied upon at trial. The Consumer Protection from Unfair Trading Regulations 2008 created no private-law right making the agreements void or unenforceable merely because of breach.

First-instance decision. No prior appellate decision is stated in the judgment.