Where a local authority commissions work from a building contractor to properties it does not own and its defective those owners are unlikely to be able to sue that contractor for breach of contract or in tort as the relevant relationship is between the Council and the contractor. Unless the owners benefit from collateral warranbies or rights under the Contracts (Rights of Third Parties) Act 1999.
In Cometson & Anor v Merthyr Tydfil County Borough Council [2014] the Claimants were, the freehold owners of a property at 22 Aberfan Road, Aberfan (“the property”).
Initial procedings against the contractor as second defendant for tort were unsurprisingly unsuccessful and they were claiming damages against Merthyr Tydfil County Borough Council (“the Council”) as first defendant, for breaches of a contract.
At the first hearing the court found “the Council’s obligations:
i) did not consist of entering into a building contract as agent for the Claimants;
ii) did not involve the Council contracting with the Claimants that the Council would procure the doing of the works to the Claimants’ property so as to be responsible for the quality and progress of those works;
iii) did involve the Council contracting with the Claimants to arrange for the carrying out of the Scheme at any rate in relation to the works to be done to the Claimants’ property.”
The Judge considered the effect of sections 12 to 14 of the Supply of Goods and Services Act 1982 and concluded that the contract between the Claimants and the Council obliged the Council to provide the service of arranging the relevant works and that it was an implied term of that contract that the Council would carry out that service with reasonable skill and care and within a reasonable time.
In connection with the Council’s obligation as being an obligation to “arrange” or to “organise” the works. There was an obvious need for the Council to be involved with the arrangement of the works. The works involved in the scheme were being done on a number of properties that the Council did not own. It would be necessary for the Council to plan how the work should be approached.
The service to be provided by the Council to the Claimants included the “supervision” of the contractor.
The Council was found to be in breach of its duties in relation to many of the works. To the extent that these were wider than the Council had previously admitted to there had been no failure by Mr Cometson to mitigate his loss and he recovered damages. In respect of some that the Council had offered to repair Mr Cometson was unable to recover damages as he had declined to afford the Council access so failing to mitigate his loss.
In relation to most of the breaches the Council was found to have its own “back to back” claim against the contractor.
This blog has been posted out of general interest. It does not remove the need to get proper legal advice in individual cases.
Original article: Local Authority Liable to Owners for Bad Construction Work of Its Building Contractor.