Gartell & Son (a firm) v Yeovil Town Football & Athletic Club Ltd

A total failure of consideration depends on the contractual performance promised, not merely on whether work was carried out or materials supplied. Where the agreed performance includes reasonable skill and care, and a treatment capable of producing the contemplated improvement, failure to deliver any part of that performance may justify withholding the price.

A party discharged from paying the contract price cannot also recover the full cost of substitute performance. Damages are limited to the loss caused by the breach, ordinarily the reasonable excess cost of obtaining equivalent performance, with credit for costs that would have been incurred in any event.

Gartell carried out renovation and top-dressing works on Yeovil’s football pitches. Yeovil refused to pay the final invoice, alleging breach of the implied term to use reasonable care and skill, and counterclaimed for remedial works and staff overtime.

HHJ Harington dismissed Gartell’s claim on the basis of a total failure of consideration and awarded Yeovil £21,494 plus interest. Gartell appealed, arguing that work had been performed and that the counterclaim over-compensated Yeovil. Yeovil accepted errors concerning VAT and overtime. The central issues were whether the contractual performance had wholly failed and what damages were recoverable if Yeovil was discharged from paying the price.

1. Appeal allowed. The order of HHJ Harington was set aside and an order dismissing both the claim and the counterclaim was substituted.
2. The starting point in determining total failure of consideration, or failure of basis, is to identify the contractual performance required. The contract required reasonable skill and care and a treatment capable of improving the pitches in the manner discussed. The fact that Gartell’s operatives attended, performed work and supplied materials did not prevent a total failure where none of the bargained-for performance was delivered.
3. Yeovil was discharged from its obligation to pay the price. However, it could not also recover the full cost of renovation works obtained from Ecosolve. On the proper analysis, those works were an alternative treatment aimed at improving the pitches, rather than works merely restoring them to their pre-contract condition.
4. The recoverable loss was, at most, the reasonable additional cost of equivalent substitute performance over the contract price. A party cannot receive substitute performance without paying for it and simultaneously recover its entire cost after being relieved of the original price. Credit also had to be given for annual maintenance which would have been required even if Gartell had performed correctly.
5. The judge’s full award of the Ecosolve invoice therefore over-compensated Yeovil. The evidence did not permit the Court of Appeal to quantify the proper additional cost, and Yeovil had sought only to uphold the original award. The counterclaim was consequently dismissed. Yeovil also accepted that VAT was not recoverable and that the overtime claim lacked evidence sufficient for quantification.

• Taunton County Court: HHJ Harington dismissed Gartell’s claim for the contract price and awarded Yeovil £21,494 plus interest on its counterclaim.
• Court of Appeal (Civil Division): appeal allowed; the first-instance order was set aside and both claim and counterclaim were dismissed.