A & V Building Solution Limited v J & B Hopkins Limited

A contractual right to supplement a subcontractor’s labour arises only after compliance with the contract’s notice requirements. A party cannot rely on its own failure to operate contractual machinery to deny an extension of time which the contract otherwise requires. Conduct must be assessed cumulatively: withdrawing a subcontractor’s access to an essential quality-assurance system may amount to repudiatory breach when combined with other breaches and an intention to prevent completion. A contractor’s failure to pay an adjudicator’s decision may be a breach, but damages require proof of consequential loss. Loss of profit on work the subcontractor could and would have completed was recoverable, whereas speculative losses from discretionary future variations and lost business opportunities were too uncertain or remote.

The claimant was engaged as a labour-only plumbing subcontractor on a student accommodation project. It left the project after disputes concerning delay, labour supplementation, outstanding work, payment, and access to the defendant’s IAuditor quality-assurance system.

The claimant sought payment for measured works, variations, loss and expense, loss of profit, business opportunity and other losses. The defendant counterclaimed for completion costs, alleged stolen materials and adjudicators’ fees. The court determined the parties’ final account and the contractual consequences of the events preceding the claimant’s departure.

1. Contractual breaches. The defendant breached clause 7.4 by supplementing labour before expiry of the seven-day notice period. It breached clause 13 by failing to grant an extension of time for the Covid suspension and continuing acts of prevention. It breached clause 20.3 by failing to treat the first adjudicator’s decision as binding until final determination.
2. Repudiatory breach. The defendant’s removal of the claimant’s access to IAuditor was not contractually justified. In context, the system was central to recording completion and quality assurance. Combined with the labour supplementation, failure to grant time, lack of response to requests for particulars and the defendant’s decision that the claimant would not complete the works, the removal evinced an intention to prevent completion. The claimant was entitled to accept the repudiation by refusing to return to site.
3. The defendant’s case that the claimant had itself repudiated the subcontract was rejected. The defendant had not validly terminated under clause 15.1, and its alleged common-law acceptance of repudiation was not communicated until 16 April 2021.
4. The claimant recovered £407,156.25 for measured works and £53,200 for variations. Claims for disruption and loss and expense failed for lack of sufficient evidence and because clause 11.1 excluded financial recovery for suspension under that clause.
5. The claimant was ready, willing and able to complete the outstanding works. It recovered 15 per cent of their value, £6,096.56, as loss of profit. It recovered nothing for hypothetical future variations, directors’ and consultants’ time, lost business opportunity, damage to business or reputation, or the defendant’s completion costs.
6. The court entered the account at £101,543.17 before interest and adjudicators’ fees, on which further submissions were invited.

The judgment was a first-instance decision following trial. The court referred to earlier interlocutory and enforcement judgments in the same litigation, but those decisions were not under appeal in this judgment.