Case Summary: Gartell & Son V Yeovil Town (2016)

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A football club which had been discharged from its obligation to pay the contract price for works on its pitches was not entitled to make the contractor pay the full cost of works subsequently carried out on the pitches. It was only entitled to the cost of restoring the pitches to the condition they would have been in had the contractor done nothing.

[2016] EWCA Civ 62

CA (Civ Div) (Laws LJ, Floyd LJ, Bean LJ) 04/02/2016

A partnership (G) specialising in ground works to sports fields appealed against a decision to dismiss its claim for the price of its contract for work on the pitches of the respondent professional football club, and to allow the entirety of the club’s counterclaim.

The club had played in League 1 of the Football League and aspired to be promoted to the Championship. It wanted its main pitch and training pitches to be brought up to Championship standard. G was contracted to do the work. The work was done in wet conditions which meant that the treatment did not work satisfactorily. The club complained that the work had not been done to the requisite standard and withheld payment. G issued proceedings for the contract price. The club denied liability, relying on a breach of the implied term of using reasonable care and skill. It counterclaimed for the cost of remedial works to the pitches, seeking payment of an invoice submitted by a second contractor. The contractor had followed an alternative method of improving the pitches. The judge held that G had been in breach of contract as the club alleged and that, as a result, the pitches’ standard was worse than if G had done no work. He therefore held that there had been a total failure of consideration, meaning that the club was not obliged to pay the contract price. He also gave judgment for the full amount of the counterclaim.

G, while conceding that it had been in breach of contract, argued that the judge had been wrong to

(1) find a total failure of consideration, since G had provided materials and labour as contracted;

(2) allow the counterclaim for a sum greater than that required to restore the club to the position it would have been in without performance of the contract.

HELD: (1) The judge had not been precluded from finding a total failure of consideration. The argument that work had been done on the pitches and materials had been supplied looked at the performance of the contract at the wrong level. The performance the club had bargained for was one where the work was done with reasonable care and skill and was a treatment capable of making an improvement to the playing surface. No part of that performance had been delivered (see para.32 of judgment).

(2) The significance of the total failure of consideration was that the club was discharged from its obligation to pay the price. On a different analysis, there had been a breach of condition, or of an intermediate term where the breach was so serious as to deprive the club of substantially the whole benefit of the contract. Either way, the club had not then been entitled to insist that G pay the full cost of renovation works. G’s primary obligations under the contract had been replaced by an obligation to compensate the club for the loss sustained as a result of their non-performance. Those damages could be assessed by reference to the additional cost to the club of arranging for the work to be done by someone else, but G could not be denied payment and then rendered liable for the entire cost of obtaining a substitute performance. The works done by the second contractor had gone further than restoring the pitches to the condition they would have been in had G done nothing. Those works had been an alternative treatment of the pitches, aiming to improve them. The most the club could recover on the counterclaim was the amount by which the cost of the second contractor’s works reasonably exceeded the contract price. The judge’s award of the full amount of the second contractor’s invoice could not stand. The club had not asked the instant court to substitute a judgment for the amount by which the contract price had been exceeded. Accordingly, the counterclaim would be dismissed (paras 33-39).

Appeal allowed in part.

Summary from Lawtel.com

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