Possibly unsurprisingly, this article has nothing to do with Yeovil Town FC's recent run of bad luck in their games. Not being a fan of 'the Glovers', nor a follower of the game generally, it is their appearance in the Court of Appeal more than their achievements on the pitch which has attracted my attention recently. The case is not complicated, nor is it about large sums of money, but it is a useful example of how the law works when a contractor completely fails to achieve the purpose for which he was engaged.
Perhaps the Judge was being kind when he described Yeovil Town as 'a successful professional football club'. He may, more accurately, have described it as "unduly ambitious", at the time playing in League 1 but with aspirations to be promoted the Championship. The club currently performs in League 2. In any event, in order to ready itself for its anticipated (in 2012) promotion, the club decided that it needed to upgrade its training pitches to Championship standard.
The judgment contains much technical discussion of the processes for improving the playing surface. Apparently, the training pitch was plagued with the wrong sort of grass.
The Claimant contractor applied various processes to the pitches but, far from improving the surface, the works made the pitches more susceptible to damage during play. The club refused to pay the contractor's invoice. The contractor issued a claim for payment and this claim was met by a counterclaim for the cost of remedying the works (initially at five times the value of the claim, but later reduced to a similar sum).
At first instance, following a four day trial, the County Court decided that the contractor's claim for payment of his invoice should be dismissed and that the club could recover the cost of a subsequent contractor plus overtime for the club's groundsmen for their involvement in the remediation works.
The contractor appealed. He denied that there was a total failure of performance. The contractor's operatives had attended the pitches and carried out the work; the material specified in the contract had been supplied and applied to the pitches. He claimed he was entitled to payment whatever the effect of those works on the playing surface.
The Court of Appeal did not accept this; but neither was the club entitled to the whole of the cost of putting the pitches right. The Court accepted that in damaging rather than improving the pitches, the contractor's breach of contract was so serious that it was not entitled to be paid for the work carried out. However, the Court held that the contractor could not be denied payment and then rendered liable for the entire cost of obtaining a substitute performance. Such a situation would be analogous to the case of non-delivery of goods. The purchaser is not liable for the price but he is only entitled to the additional amount he reasonably has to pay for the goods from another supplier. The purchaser does not get the substitute goods for nothing.
In this case, there was insufficient evidence on the additional element of the remedial costs over the original contract sum and as such the Court dismissed both the claim and the counterclaim,
The principle to be drawn from this case is that where there is a total failure of consideration in works carried out by a contractor (which is, in fact, a very high hurdle to get over) the employer is not entitled to the entire cost of a substitute performance of the contract. The Court of Appeal judgment was, in effect, a no-score draw. Neither party could claim to be either 'sick as a parrot' or 'over the moon' with the result.
The judgment can be found here.