Scottish Sheriff Court Decisions

SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE AT DUNDEE

 

JUDGMENT OF SHERIFF RICHARD A DAVIDSON

 

In Causa

 

ANGUS JOINERY LIMITED, PURSUERS

 

Against

 

JAMES AND VALERIE McKAY, DEFENDERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A102/10

 

Act: Hunter

Alt: Ms. Fyffe

 

Dundee, 4th. November, 2010. The sheriff, having resumed consideration of the case, finds the following facts admitted or proved:-

 

1. The Pursuers are Angus Joinery Limited, a company incorporated under the Companies Acts and having a place of business at Unit 9, Angus Works, Tannadice Street, Dundee DD3 7PT.

 

2. The defenders are James and Valerie MacKay, Spouses, residing at 14 Long Lane, Broughty Ferry, Dundee DD5 1HF. Mr. McKay is an electrical contractor. Mrs. McKay is an administrator.

 

3. The defenders reside within the territorial jurisdiction of Dundee Sheriff Court. In any event the litigation arises out of a contractual dispute and all the obligations under the contract were to be performed within this court's territorial jurisdiction.

 

4. In about October 2009, the pursuers and the defenders entered into a contract for the supply and installation by the pursuers of six hardwood traditional sash and case windows at the defenders' home at 14 Long Lane, Broughty Ferry. The defenders had attended at the pursuer's premises and had selected the particular windows which they wished installed conform to the sample then exhibited to them. A window surveyor thereafter attended at the defenders' home to take measurements for the windows whereafter the windows were manufactured specifically in implement of this contract, as opposed to being available from stock. The price for the windows and the installation, inclusive of VAT, was to be £8,280. The defenders relied upon the pursuers' skill in relation to the measurements for the new windows, for the manufacture of the windows and for their installation in a manner in which they would work properly.

 

5. The process of installation commenced on 7^th. December, 2009 and the bulk of the work of installation was completed by 11^th. December, 2009. The upstairs windows were installed first and then the downstairs windows. The installation was carried out by Ian Anderson and Andrew Kelly who were both employees of the pursuers. It had been Kelly who had undertaken the measurements for the windows and they had been manufactured to his measurements.

 

6. The installation was not satisfactory. There were a significant number of defects, some of which were minor and remediable. There were several major defects. Most significantly, the main window upstairs appears out of alignment and not plumb. The precise reason for this cannot be ascertained determinatively without uninstalling that window. Levels to sills varied between the central and the splay windows of the upstairs bay. There had been a failure to install toughened glass in the downstairs windows disconform to Building Regulations. The downstairs left hand window's top sash frame was split due to misaligned ironmongery. On all three windows the ironmongery had been misaligned causing impact damage to the frames and the right hand window runs off level with a 6mm gap from left to right.

 

7. Additionally, various attempts to rectify some of the defects had led to patching of the wood with significant variations in colour beyond the norm for natural timber, creating the impression of patching.

 

8. The defects were the result of poor installation rather than poor manufacture.

 

9. The defects cannot be rectified by repairs as that will produce a result that is increasingly unacceptable in terms of the patched appearance of the woodwork. The only viable solution is the complete replacement of the windows.

 

10. Insofar as the first defender may from time to time have sworn at the pursuers' workmen, nothing which he said or did was of such significance as to cause any material upset or distress to any normal person.

 

11.The second defender did not say, on 18^th. January, 2010, to Messrs. Kelly and Anderson that if Mr Squire of the pursuers came to the defenders' home that evening, there would be "fisticuffs."

 

12. In any event the pursuers and, in particular, Mr. Squire, instructed their solicitors, Messrs, Muir Myles Laverty, Solicitors, Dundee, to write to the defenders on 21^st. January, 2010, which they did, stating that the contract had been completed (though that was not their position in evidence), that the first defender, in short, had been abusive and had made threats to their employees and that the pursuers were not prepared to send their employees back unless they were given an assurance by the defenders that there would be no repetition of the abuse or threats. The defenders instructed their solicitors, Messrs. Thorntons, Solicitors, Dundee, to respond, as they did on 26^th. January, 2010, disputing that the contract was completed, disputing that they had been abusive to the workmen or had made any threats but nonetheless undertaking that, if the pursuers would return to complete the outstanding works, there would be no communication with their employees and 50% of the contract price would be paid forthwith. The only response to this communication was the service of the summons in this cause.

 

13. A reasonable estimate for the replacement of the existing windows by Esk Glazing Limited of Montrose would be £8,750 inclusive of VAT (at 17.5%).

 

14. Both defenders had suffered considerable distress and inconvenience as a consequence of the pursuers' material breach of contract and the prolonged disruption to their home comfort. The new windows had been a present by the first to the second defender to celebrate the couple's 40^th. wedding anniversary. The second defender had been suffering from a serious illness and the first defender had been extremely concerned about her health. The second defender felt she was to blame for the considerable distress and frustration caused to date and wished they had never decided to replace the windows. Both parties will suffer the further inconvenience as a consequence of the process of removal and replacement of the windows before the purpose for which the contract was entered into is achieved.

 

Finds in fact and law:-

 

1. That this court has jurisdiction on the basis that the defenders reside within its territorial jurisdiction and on the basis that all of the obligations on either party to the contract were to be undertaken within this court's jurisdiction.

 

2. There being no proceedings in any other court and no agreement to invoke the jurisdiction of any other court, this court has jurisdiction in the matter.

 

3. It was an implied term of the contract that the windows as manufactured would be satisfactory.

 

4. It was an implied term of the contract that the installation of the windows would be carried out by competent tradesmen acting with reasonable skill and care.

 

5. It was an implied term of the contract that the measurement of the windows would be carried out by a competent tradesman with reasonable skill and care and that the windows would fit into the openings into which they were intended to go.

 

6. That there was nothing in the behaviour of the first defender towards the employees of the pursuers that could have amounted to either a repudiation or a breach of the contract between the parties and that, accordingly, when the pursuers did not return to complete the contract, but instead served the initial writ in this cause, they were in material breach of contract.

 

7. That the contract between the parties was a contract for the transfer of goods as that expression is defined by s. 11A of the Supply of Goods and Services Act, 1982, as amended, and was not a contract for the sale of goods, but a contract locatio operis faciendi.

 

8. That the pursuers' obligations to manufacture and install windows never having been completed, in breach of contract, they are not entitled to the counterpart of payment of the contract price.

 

9. That the pursuers having refused to complete the contract without there being any breach of contract on the part of the defenders, the pursuers are in material breach of contract.

 

10. Separatim, the windows supplied not being reasonably fit for the express purpose for which they were supplied, and this being a consumer contract, given that the pursuers contracted in the course of their business of manufacturing and installing windows whereas the defenders contracted for the replacement of windows in their home and not in the course of any business, the pursuers are in material breach of contract.

 

11. That the defenders can only be put into a position where the contract from their perspective will have been implemented if the windows are removed and are replaced with alternative new windows.

 

12. That the cost of such replacement windows, inclusive of VAT, will be £8,750.

 

13. That the defenders have, as a result of the pursuers' breach of contract, suffered inconvenience and distress in respect of which they are entitled to damages reasonably assessed at £3,000.

 

14. That the defenders are entitled to interest at the rate of 8% per annum from the date of citation, 3^rd. March, 2010, until payment.

 

 

Finds in law:-

 

1. This court has jurisdiction in the cause.

 

2. The defenders not being in material breach of contract have not repudiated the contract.

 

3. The pursuers by their refusal to return to the defenders' property to complete the contract are in material breach of contract.

 

4. Separatim, the pursuers being in breach of the implied term that the goods transferred to the defenders would be reasonably fit for the express purpose for which they were intended, contrary to the provisions of Sections 11D and F of the Supply of Goods and Services Act, 1982, as amended, are in material breach of contract.

 

5. As a consequence of the pursuers' material breach of contract, the defenders are entitled to damages reasonably assessed in the sum of ELEVEN THOUSAND SEVEN HUNDRED AND FIFTY POUNDS (£11,750) STERLING with interest at 8% from 3^rd. March, 2010 until payment.

 

Accordingly, sustains the fourth and fifth pleas-in-law for the defenders in the principal action and their first and second pleas-in-law in the counterclaim; repels the pursuers second plea-in-law in the principal action and all their pleas-in-law in the counterclaim; finds it unnecessary to deal with the defenders' third and sixth pleas-in-law in the principal action; grants decree against the pursuers for payment to the defenders in the sum of ELEVEN THOUSAND SEVEN HUNDRED AND FIFTY POUNDS (£11.750) STERLING, with interest thereon at the rate of 8% per annum from 3^rd. March, 2010, until payment; reserves all questions relating to the expenses of the cause meantime and assigns

as a hearing on expenses.

 

 

 

 

 

 

 

 

 

 

 

NOTE

 

Statutory Provisions considered:

 

1. Supply of Goods and Services Act, 1982 esp. s. 11A, 11D and 11F.

 

 

11A.- The contracts concerned.

(1) In this Act in its application to Scotland a "contract for the transfer of goods" means a contract under which one person transfers or agrees to transfer to another the property in goods, other than an excepted contract.

(2) For the purposes of this section an excepted contract means any of the following-

(a) a contract of sale of goods;

(b) a hire-purchase agreement;

[...]²

(d) a transfer or agreement to transfer for which there is no consideration;

(e) a contract intended to operate by way of mortgage, pledge, charge or other security.

(3) For the purposes of this Act in its application to Scotland a contract is a contract for the transfer of goods whether or not services are also provided or to be provided under the contract, and (subject to subsection (2) above) whatever is the nature of the consideration for the transfer or agreement to transfer.

 

11D.- Implied terms about quality or fitness.

(1) Except as provided by this section and section 11E below and subject to the provisions of any other enactment, there is no implied term about the quality or fitness for any particular purpose of goods supplied under a contract for the transfer of goods.

(2) Where, under such a contract, the transferor transfers the property in goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.

(3) For the purposes of this section and section 11E below, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.

(3A) If the contract for the transfer of goods is a consumer contract, the relevant circumstances mentioned in subsection (3) above include any public statements on the specific characteristics of the goods made about them by the transferor, the producer or his representative, particularly in advertising or on labelling.

(3B) A public statement is not by virtue of subsection (3A) above a relevant circumstance for the purposes of subsection (3) above in the case of a contract for the transfer of goods, if the transferor shows that-

(a) at the time the contract was made, he was not, and could not reasonably have been, aware of the statement,

(b) before the contract was made, the statement had been withdrawn in public or, to the extent that it contained anything which was incorrect or misleading, it had been corrected in public, or

(c) the decision to acquire the goods could not have been influenced by the statement.

(3C) Subsections (3A) and (3B) above do not prevent any public statement from being a relevant circumstance for the purposes of subsection (3) above (whether or not the contract for the transfer of goods is a consumer contract) if the statement would have been such a circumstance apart from those subsections.

(4) The term implied by subsection (2) above does not extend to any matter making the quality of goods unsatisfactory-

(a) which is specifically drawn to the transferee's attention before the contract is made,

(b) where the transferee examines the goods before the contract is made, which that examination ought to reveal, or

(c) where the property in the goods is, or is to be, transferred by reference to a sample, which would have been apparent on a reasonable examination of the sample.

(5) Subsection (6) below applies where, under a contract for the transfer of goods, the transferor transfers the property in goods in the course of a business and the transferee, expressly or by implication, makes known-

(a) to the transferor, or

(b) where the consideration or part of the consideration for the transfer is a sum payable by instalments and the goods were previously sold by a credit-broker to the transferor, to that credit-broker,

any particular purpose for which the goods are being acquired.

(6) In that case there is (subject to subsection (7) below) an implied term that the goods supplied under the contract are reasonably fit for the purpose, whether or not that is a purpose for which such goods are commonly supplied.

(7) Subsection (6) above does not apply where the circumstances show that the transferee does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the transferor or credit-broker.

(8) An implied term about quality or fitness for a particular purpose may be annexed by usage to a contract for the transfer of goods.

(9) The proceeding provisions of this section apply to a transfer by a person who in the course of a business is acting as agent for another as they apply to a transfer by a principal in the course of a business, except where that other is not transferring in the course of a business and either the transferee knows that fact or reasonable steps are taken to bring it to the transferee's notice before the contract concerned is made.

(10) For the purposes of this section, "consumer contract" has the same meaning as in section 11F(3) below.

 

[

11F.- Remedies for breach of contract.

(1) Where in a contract for the transfer of goods a transferor is in breach of any term of the contract (express or implied), the other party to the contract (in this section referred to as "the transferee" ) shall be entitled-

(a) to claim damages; and

(b) if the breach is material, to reject any goods delivered under the contract and treat it as repudiated.

(2) Where a contract for the transfer of goods is a consumer contract and the transferee is the consumer, then, for the purposes of subsection (1)(b) above, breach by the transferor of any term (express or implied)-

(a) as to the quality of the goods or their fitness for a purpose;

(b) if the goods are, or are to be, transferred by description, that the goods will correspond with the description;

(c) if the goods are, or are to be, transferred by reference to a sample, that the bulk will correspond with the sample in quality,

shall be deemed to be a material breach.

(3) In subsection (2) above, "consumer contract"has the same meaning as in section 25(1) of the 1977 Act, and for the purposes of that subsection the onus of proving that a contract is not to be regarded as a consumer contract shall lie on the transferor."

 

2. Unfair Contract Terms Act, 1977 esp s. 25(1):-

 

""consumer contract" means [subject to subsections (1A) and (1B) below ] a contract in which-

(a) one party to the contract deals, and the other party to the contract ("the consumer") does not deal or hold himself out as dealing, in the course of a business, and

(b) in the case of a contract such as is mentioned in section 15(2)(a) of this Act, the goods are of a type ordinarily supplied for private use or consumption;

and for the purposes of this Part of this Act the onus of proving that a contract is not to be regarded as a consumer contract shall lie on the party so contending;"

 

 

 

 

Authorities referred to:

 

1. Bank of East Asia v Scottish Enterprise 1997 SLT 1213

2. British Motor Body Co Ltd v Thomas Shaw (Dundee) Ltd. 1914 SC 922

3. A & J Dempster v Motherwell Bridge and Engineering Co Ltd. 1964 SC 308

4. Diesen v Samson 1971 SLT (Sh Ct) 49.

5. Lawrie v British Steel Corporation 1988 SLT 17

6. Lloyds Bank Ltd v Bamberger 1993 SC 570

7. Martim v Bell Ingram 1986 SC 208; 1986 SLT 575

8. Photo Production Ltd v Securicor Transport Ltd. [1980] AC 827

9. John Thorburn & Sons v Border Harvesters Ltd. 1992 SLT 549

10. Wade v Waldon 1909 SC 571

11. Watson v Swift's Judicial Factor 1986 SC 55.

 

 

 

 

Institutional Writers referred to:

 

1 Bells Principles; para.71.

 

 

 

Text Books referred to:

 

1. The Law of Contract in Scotland : Professor W.W. McBryde : 3^rd. Edition esp. paras. 20-16 at page 545; 20-44 to 20-47 at pp556-558; 22-104 at page 659

 

2. Stair Memorial Encyclopaedia; Vol. 3 para. 6

 

3. The Law of Civil Remedies in Scotland : Professor D.M Walker Q.C pp.59 onwards.

 

4 Mayne and McGregor on Damages, 12^th. edition, page 44.

 

The evidence:

 

[1] I heard evidence in the course of the proof as follows. For the pursuer, there was Nigel Squire, their managing director, Ian Anderson, a joiner, Nick Tracey, a joiner, Andrew Kelly, a window installer and Roderick Paul, an architect. For the defenders each of the defenders gave evidence as did Graeme McDonald, a quantity and building surveyor. Reference was also made to a number of documentary productions. So far as the witnesses are concerned, I was unimpressed by Messrs. Squire, Anderson and Kelly and where their evidence was at variance with that of the defenders, I preferred the evidence of the defenders. I regret that I was not greatly impressed with either Mr. Tracey or Mr. Paul who were led as expert witnesses and, with particular regard to the latter, where his professional opinion differed from that of Mr. McDonald, I preferred the evidence given by Mr. McDonald. It seemed to me that he had devoted a great deal more care and attention to his remit, had fully recorded his observations, noting clearly their limitations and had come to conclusions which were justified and reasonable in the light of his observations.

 

[2] The defenders wished to replace six sash and case windows on the front elevation of their home at 14 Long Lane, Broughty Ferry. After some local research they alighted upon the pursuers as manufacturers and installers of traditional sash and case windows. They went to their premises and were shown a sample of a window which they admired and agreed to have. A price of £7,200 plus VAT was agreed upon. Andrew Kelly from the pursuers came to their home and took measurements. The upstairs windows, being three in number, formed part of a bay window configuration. Downstairs there were a set of three windows. The windows were manufactured to his measurements. They looked very attractive on delivery and the defenders were impressed with the quality of workmanship. They had been manufactured by Ian Anderson of the pursuers. The defenders were told that the entire installation would take seven to ten days with the main operation of removing and replacing the windows themselves lasting for not more than three days. It was agreed at the request of the defenders that the upstairs windows would be done first. The process of installation commenced on 7^th. December, 2009 and was carried out by Ian Anderson and Andrew Kelly who, on the face of it, were both very experienced tradesmen. The main part of the replacement was "completed" within the three day period, but the weights for the downstairs windows, which are essential in the installation of sash and case windows, were not available. There was no clear evidence as to why they were not available given that they were integral to the installation process. The upstairs windows did not look right. They appeared to be lying at an angle. The inside sills of the three parts of the bay window upstairs did not appear all to be at the same level. In respect of one of the downstairs windows there appeared to be a gap at the bottom right hand side. As the windows were operated, catches caught on the wood of frames and scored them. Some of the windows were very stiff in operation while another one appeared to float. A considerable portion of the joinery work was rough and in need of sanding. The tradesmen were messy workers. They created a large stain on a carpet. Their use of dust sheets was limited. They used excessive amounts of mastic which had to be cleaned from the upstairs gutter. Window panes were left covered in it. The defenders were unimpressed with the quality of the installation.

 

[3] Their complaints appeared to fall on largely disinterested ears. Such efforts as took place at carrying out remedial works seemed to make matters worse. Some affected parts of the timber were cut out and replaced with hardwood but of a different colouring giving the final result a patchwork appearance, which was unimpressive and not aesthetically satisfactory. Water damage occurred in relation to the upstairs window plates due to ineffective sealing. Wedges were fitted to the window which was floating, making it very stiff to operate. A couple of the frames were split by misplaced catches and cut out and replaced with wood which was a poor colour match. To add to the defenders' irritation, while they continued to express dissatisfaction about the joinery work, a painter appeared and began to carry out painterwork. He was asked to leave.

 

[4] As the relationship between the parties deteriorated, there were some terse exchanges but nothing was said or done by either defender given the context of the world in which we presently live, which could even remotely be conceived as being so inappropriate or derogatory as to be destructive of the contractual relationship. The suggestion from the pursuers that two experienced and worldly wise tradesmen like Anderson and Kelly were so frightened of the first defender, a gentleman of no more than medium stature in his early sixties, that they would not return to the property, is laughable. The high point of the evidence from the pursuers in support of what they alleged was the breach of contract by the defenders was an assertion that the second defender had said to Anderson and Kelly on 18^th. January, 2010, the last day they worked at the defenders' home, when they said that they were finished and that Mr. Squire might come and visit that evening, that "he'd better not come or there'll be fisticuffs." The second defender denied ever saying any such thing, and I prefer her evidence in this respect, but even supposing she had, I can only express incredulity at the suggestion that anyone could contemplate that such an observation could entitle the pursuers to treat the contract as having been repudiated. The first defender enhanced his credibility by admitting that there had been times in the course of the sloppy and inept performance of the contract by the pursuer's tradesmen when he had been less than polite to them but, for the avoidance of doubt, nothing that he did or said came anywhere near justification for repudiation.

 

[5] There followed an exchange of correspondence between parties' solicitors. The pursuers' agents sought payment of £7,000 as a prerequisite to the return of their employees on the basis that the contract was complete "barring some minor snagging and paintwork." It was also alleged that their employees had been the subject of abuse and threats and an assurance was sought that there would be no repetition of this behaviour before the employees would be returning. That was sent on 21^st. January, 2010. The defenders' agents replied with a counter proposal about payment, disputing that there had been abuse but saying that they were instructed to give an undertaking that there would be no direct communication with any workers sent back to the house. Mr. Squire in his evidence appeared to be maintaining that the defenders were in material breach of contract by their behaviour towards his employees and it appeared to be the evidence that at least one of them, Ian Anderson, was not prepared to return to the house. Asked about the assurance sought by his solicitors when he regarded the contract as being in breach and presumably being aware of his employees' attitude, he suggested that the author of that letter had exceeded the authority conferred upon him by the instructions given. I did not believe him. It was an answer that appeared designed to circumvent the difficulty caused by the defenders giving an undertaking in the terms requested which was not followed by the return of the workmen to complete the contract. There was no evidence about instalment payment terms and therefore there was no obligation upon the defenders to make any payment until the contract was complete. The contract has still not been completed.

 

[6] A number of independent witnesses looked at the efforts at installation. The first of these called by the pursuers was a 34 year old self employed joiner, Nick Tracey. His background for his role as an expert witness was 17 years experience of working as a joiner, including the period of his apprenticeship. He said that there was a 10 - 15 mm. run-off in relation to the upstairs windows. He noticed a score mark in one of the sashes. He observed that new parts had been inserted and that there was "a bit of a difference" in colour. One window needed to be loosened off. He could not explain why the first floor windows appeared to be out of alignment. He thought the other defects could be rectified in the course of a day's work and at a cost of about £400 plus another couple of days of painterwork, but he excepted from that figure the rectification of the problem of mis-alignment, fairly accepting that since he did not know the cause, he could not venture an opinion on the solution. With due respect to him, and I make no adverse observation about his credibility, I was left with the impression that his examination of the defects was fairly superficial, but even at that, he observed and recalled some of the problems which I have come to regard as significant.

 

[7] The second independent witness to give evidence was Richard Paul, a 52 year old architect. The pursuers had asked him to look at the installation and the complaints being made by the defenders and to advise them on the quality of the installation. He made his examination of the windows on 26^th. March, 2010. He expressed the opinion that the upstairs windows were generally plumb but appeared to be out of line in relation to the external fittings. He thought that this might have been the result of settlement of the existing building but that was no more than an educated guess from his experience of buildings in Broughty Ferry with its sandy sub-soil suffering from settlement. It would be necessary to uninstall the windows to determine the cause of the off line appearance of the windows. He agreed that there had been excessive use of mastic and further that that appeared to have been done in an attempt to plug a gap. He accepted that there were variations in the colour of the wood but considered that to be natural. The job appeared, at least cosmetically, to be incomplete. He had not identified poorly prepared timber, though everyone else did. He considered that the windows were well manufactured. He accepted that at least one of them was stiff in operation but this happened "with timber sliding between timber." He said that there was some evidence of efforts to adjust the guiderails to enhance the functioning of the windows which may have contributed to their current stiffness. He did not notice damage to any frame. He did not consider that there was any material variation in the heights of the sills. He recognised that the wrong type of glass, not of the toughened variety, had been used on the downstairs windows. He accepted from being shown the photographs that there appeared to be a problem with the fit of one of the downstairs windows and accepted that he had not noticed this in the course of his examination and accepted that the photograph appeared to demonstrate that the lower sill was not flush with the check on the bottom surround, which it should be and that there was a slight angle apparently demonstrating that that window was off plumb. He was critical of Mr. McDonald's report for failing to specify what remedial work would be required, though he himself had not produced a written report and had clearly missed some of the defects observed by others or seen in the photographs. He did not suggest what remedial work was required but was nonetheless prepared to offer the opinion that it would not be necessary to remove the entire installation and that all that was really required to complete the contract was one day of painterwork. Pressed, he did acknowledge that he should have expressed a caveat in relation to the apparent mis-alignment of the upstairs windows the cause of which remained unknown to him beyond his speculation about settlement, and I did not understand him to suggest that any settlement would have occurred between the measurement of the windows and the attempt at installation. He appeared to express the opinion that misalignment up to 15% was acceptable.

 

[8] The third independent witness was Graeme McDonald, B.Sc., a 34 year old chartered and building surveyor with Messrs. J & E Shepherd, Chartered Surveyors, Dundee, wjho was called by the defenders. He said that his experience lay in surveying commercial and residential properties throughout the east coast of Scotland and one of his specialities was the investigation of building problems and solutions. He had also been up and down a considerable proportion of the west coast as he told me that one of his previous commissions which led him to have special knowledge relevant to this case had been for Argyll & Bute Council who had sought his advice on the use and replacement of sash and case windows in their local authority housing stock which made extensive use of such windows. He had been commissioned by the defenders to inspect and report upon the installation of the windows. He carried out his inspection on 11^th. March, 2010 and thereafter produced a written report which is 6/1/3 of process. He reserved his position on the cause of the problem with the upstairs windows which he, like the others, said could only properly be determined if the windows were taken out, but he considered that the upstairs installation was mis-aligned and was not plumb and this had had the result of causing the middle window of the bay to lie on the original apron flashing. He also observed excessive use of mastic, poor preparation of the timber, incomplete decoration and misaligned "window ironmongery" (i.e. the catches) which was causing scoring of the wood. He found fixings which were not filled. He found some of the sashes to be stiff in operation. The right window sill upstairs was not adequately secured. There was a variation of sill levels between the central window and the splay windows of the bay. He considered that external fittings had been fitted with excessive use of silicone and were poorly finished. The middle and therefore main window of the bay window set up had a gap looking from left to right. It was not sitting plumb with the bay construction. There was a 20mm differential between the left and right hand edges of the bottom of the window. This was supposed to be a bespoke product, made to measure, to replace the previous windows. It should fit the gap into which it was to be put. It did not. With regard to colour of the timber, he accepted that this was a natural product and that some variation in colour was to be expected but he said that there was an obvious and aesthetically unsatisfactory difference between the colour of the external fixings and the rest of the timber. In relation to the downstairs windows, the wrong type of glass had been used. The top sash frame had been split due to a misaligned catch. There was impact damage to all windows for the same reason. The let hand top sash frame was split externally. There was excessive use of mastic. The right hand window ran off level.

 

[9] Mr. McDonald accepted that a number of the foregoing defects could be rectified with relative ease. However, the major defects in his opinion were the misalignment of the upstairs windows, the splitting of the frames and the installation of glass of the incorrect standard - not toughened - which was a breach of Building Regulations. He did not consider, given what the defenders were contracted to pay, that they should have to put up with patch repairs using wood filler or the like, and he was already concerned about the poor appearance of the installation on account of different coloured pieces of wood having been used in the course of earlier attempts at repair. He did not know what might be required to correct the misalignment, or even if it could be corrected, but he considered that the pursuers had contracted to replace the existing windows with new windows which would fit, would look attractive and would function as sash and case windows were meant to function and that it was for the pursuers to produce and install windows which did not appear to be 20mm out of alignment. He did not consider that it would accord with these implied terms of the contract for the supply and installation of these windows if there were to be further pieces cut out of the frames and new pieces inserted as the problem already identified with colour matching would be exacerbated. Looking at the whole picture as it presented to him, he was at a loss to see how the defenders could receive what they had contracted to receive without the entire installation being removed and replaced. In the course of his evidence he made reference to a number of photographs annexed to his report which supported his observations and conclusions. The colour problems are illustrated in photographs 1, 2, 6, 13 and 14 as annexed to his report. Photograph 1 also shows misalignment of the upper windows as does photograph 3. Poor finishing is evident in photographs 4, 5, 8 and 10. Mastic and silicone misuse can be seen in photographs 1, 7, 8, 9, 11 and 13. Photograph 8 shows a split in the wood caused by the misaligned catch. Photograph 10 shows the downstairs right hand window with a 6mm gap at its right hand end. Photograph 11 demonstrates the use of expanding foam.

 

Submissions for the pursuers:

 

[10] For the pursuers, Mr. Hunter submitted that I should regard the witnesses led by him as being credible and reliable, in particular Messrs. Anderson and Kelly in relation to the behaviour of the first defender and their legitimate concerns about what might happen to them were they compelled to return further to the defenders' home. He appeared not to appreciate that neither Mr. Anderson nor Mr. Kelly had given any specific evidence which went any way to support the assertion that the first defender was aggressive. The only evidence of any specific occurrence given by them related to a remark they alleged had been made by the second defender to the effect that if "Nigel" (Mr. Squire) were to attend at their home that evening there would be "fisticuffs." I accept the second defender's denial that this was ever said but it stretches credulity beyond the limit to suggest that this observation from a 61 year old lady could form the basis for repudiating the installation contract on the basis that the workmen were at risk from the first defender. Even on their evidence, which I reject, it was not the workmen who were the subject of any threat. He submitted that "tension was prevalent throughout the contract." That may be so if the installers were recognising that the windows were not fitting properly, but it is inconsistent with the evidence from the first defender, which I accept, that he chatted with both of the workmen from time to time during the limited time that he was present while they were. Mr. Hunter went on to submit that the outstanding work was minimal and pointed in this respect to the evidence of Nick Tracey and Stanley Paul but I was at a loss to understand how I was to treat this evidence having regard to the contractual position as this seemed to be an acceptance that the contract had not been completed. I have assumed that these submissions were directed towards the counterclaim.

However, returning to his primary submission, he directed me to the 3^rd. Edition of the The Law of Contract in Scotland by Professor W.W. McBryde, at page 545, para 20-16, which states the following proposition that:-

 

" As a general rule if a party to a contract impedes or prevents performance of a term of a contract that does not result in a breach of contract by the other party. For example, failing to supply plans to a builder, which causes delay, would not put the builder in breach of contract to build within a certain time. Stopping a tradesman from having access to a site does not put the tradesman in breach of contract. There may be an implied term not to hinder or impede the other party in the performance of contractual obligations."

 

That was the extent to which Mr. Hunter troubled me with references to the law. He did not direct me to any of the authorities referred to by the learned author in support of his proposition and did not appear to recognise that the proposition was at best support for an assertion that if the first defender had threatened a tradesman in the present case and the tradesman would not return, then that would not mean that the pursuers were in breach of contract. It would not mean that the defenders were in breach of contract, though standing the reference to the implied term I suppose such a finding in appropriate circumstances would not be inconceivable. There is no reference in the pleadings either in the principal action or the counterclaim to any such implied term. Nonetheless, his submission was that if I believed that the second defender had made the observation about "fisticuffs" then that would justify the pursuers' position that that prevented further performance of the contract. He then submitted that, in that position, the pursuers were entitled to be paid the contract price less their estimation of the cost of completing the unpaid work. He offered no authority for this somewhat unusual approach to the assessment of damages for breach of contract.. He concluded by asking me to reserve the question of expenses but nonetheless submitted that both Richard Paul and Graeme McDonald should be certified as being skilled witnesses.

 

Submissions for the defenders:

 

[11] Ms. Fyffe had taken the trouble to prepare what she described as "outline submissions," though they were rather more substantial than that, in which she proponed that the three issues for the court were:-

 

(i) whether the pursuers were in material breach of contract by their failure to complete the contract;

 

(ii) Separatim, whether they were in material breach of contract by their failure to ensure that the windows installed were of satisfactory quality or fit for their purpose; and

 

(iii) if the pursuers were in breach of contract, whether or not material, then the defenders are entitled to damages and therefore to invoke their right to retain.

 

The restriction of the issues to those listed above does demonstrate, in my opinion, a slight degree of confusion. In the first place, the first question is whether the defenders are in material breach of the contract by scaring off the pursuers' workmen. Only if that question is answered in the negative do we reach consideration of whether the pursuers are in material breach of contract on account of their admitted refusal to complete the contract. In the second place, it did not seem to me to matter, in relation to the quality of the installation, whether any breach of contract established was material or non-material, so long as a breach was established. In the third place, the question of retention would only arise if payment under the contract was otherwise due, and in this case, prima facie payment would not be due prior to the completion of the contract.

 

Having regard to the first issue, I suggested to the parties' representatives that they may wish to consider the decision of the Inner House of the Court of Session in causa Wade v Waldon 1909 SC 571, but neither availed themselves of the opportunity to do so. That is a pity for it seems to me that the terms of the judgment may have been of some relevance to the present case. As the Lord President (Dunedin) put it, at page 576, "It is familiar law, and quite well settled by decision, that in any contract which contains multifarious stipulations there are some which go so to the root of the contract that a breach of those stipulations entitles the party pleading the breach to declare that the contract is at an end. There are others which do not go to the root of the contract, but which are part of the contract, and which would give rise, if broken, to an action of damages. I need not cite authority upon what is trite and very settled law." This was a case where the pursuer was a comedian ("George Robey") who entered into a contract with the defender who was the operator of two theatres in Glasgow to perform in Glasgow for a week starting on a particular date. It was a condition of the contract that he would give fourteen days' notice prior to such engagement, such notice to be accompanied by bill matter. He failed to comply with this condition and when he telegrammed to find out why his name was not on the bill, he was told he was in breach of contract by failing to give notice in accordance with the clause and that he would not be allowed to perform. He sought damages for breach of contract arguing that parties were agreed as to the date on which he would perform and everyone knew he was a top comedian so what purpose would a bill telling people that serve. The court both at first instance and on appeal were very clearly of the view that the pursuer's failure to give notice and bill material was not a material breach of contract giving rise to any right of recission but that the refusal of the theatre management to allow the pursuer to perform was. So the first question for determination in the present case is were the defenders in material breach of contract by their behaviour towards the pursuers' employees which was said to have been so alarming as to justify the pursuers' decision not to allow their employees to return.

 

Ms. Fyffe submitted that I should find that the pursuers did not complete the contract. She said they had acknowledged that they had not completed the contract. They had not completed the contract as none of the workmen would return to complete it on account of the behaviour of the first defender, it was claimed. So what was this behaviour ?

 

According to Nigel Squire, Mr. Kelly had been upset by comments made by the first defender on the Wednesday of the first week of the installation and that he had received complaints from Ian Anderson and Frank Boyle, a painter sub-contractor, about browbeating, abusive and aggressive behaviour. He was obliged to accept, however, that he did not raise these complaints at the time with the first defender or the second defender for that matter though he met the first defender on 13^th. December. Nor did anything that had happened at that time prevent the men returning all the way through until 18^th. January, 2010. Ian Anderson described the first defender as complaining about things not being right. That was because things were not right and he was entitled to complain about them. The same witness complained about the first defender "always bawling and shouting." Mr. Kelly described the first defender as presenting as "agitated and annoyed and a bit aggressive." He was abusive about the failure to make proper use of dust sheets and about a door being left open. The first defender admitted shouting and swearing about the condition in which his home had been left and about the door being left open on a cold January day. But there were no cross words on 18^th. January, the last day on which the pursuers' workmen came to the defenders' house nor was the position of the pursuers consistent with their painting sub-contractor turning up on 20^th. January to carry out painterwork. Yet Mr. Squire's position was predicated on a remark allegedly made by the second defender on 18^th. January after which he took legal advice which he claimed was to the effect that his men should not return to the defenders' house. Ms Fyffe pointed to the letter, 6/4/23 of process, from the pursuers' agents to the defenders dated 21^st. January in which it was said that the workmen would not return in the absence of assurances that there would be no repetition of the allegedly aggressive behaviour, to which the defenders' agents had replied, disputing that there had been aggressive behaviour but nonetheless giving an undertaking that there would be no conversation with the pursuers' employees in the event of their returning to the defenders' home. The terms of the letter from the pursuers' agent was inconsistent with a decision having been made that the behaviour of the first defender amounted to a material breach of contract and that the pursuers' employees were too frightened of him to return to his house and, insofar as Mr. Squire suggested that he had not instructed that any assurance should be sought and had not instructed that any basis upon which work could resume should be communicated to the defenders, I should not believe him. The first defender was prepared, for the sake of getting the contract completed, to give the undertaking sought and, that having been done, the pursuers then for reasons not explained decided that they would still not return to complete the contract. The real reason for this, she submitted, is that they regarded all the joinery work as having been done. It may have been that the real reason the pursuers would not return is that the defenders did not pay the £7,000 demanded as a condition precedent of any return, albeit that was a requirement that could not lawfully be imposed upon them. In any event, said Ms. Fyffe, the refusal of the pursuers to return to complete the contract was unreasonable. If that was correct then, as a matter of law, the pursuers had repudiated the contract without justification and the defenders were entitled to treat the contract as having been rescinded. They were thus relieved from meeting their contractual obligations including their obligation to make any payment to the pursuers. She referred to the "mutuality principle" as she described it and directed me to The Law of Contract in Scotland by Prof. W.W. McBryde, 3^rd edition at para. 20-44 onwards. From para. 20-45 she extracted a quotation from Erskine's Institutes at III, iii, 86, in which he opined that:-

 

"No party in a mutual contract, where the obligations on the parties are the causes of one another, can demand performance from the other, if he himself either cannot or will not perform the counterpart; for the mutual obligations are considered as conditional."

 

She went on to refer to para 20-47 in which the learned author lists what he describes as "the modern rules," saying "The concept of mutuality involves at least five ideas:

 

(1) A party who is in breach of obligations cannot enforce performance by the other party.

 

(2) The party who is not in breach may withhold performance until the other has performed or is seen to be willing to perform the counter stipulations. Once the breach ends, so does the right to suspend performance. The party who is entitled to withhold performance may also be entitled to quantify a claim as damages or sue for sums due under the contract.

 

(3) The mutuality concept only applies if the obligations of the parties are the causes of one another or are reciprocal undertakings.

 

(4) The operation of the principle can be affected by the express terms of the contract.

 

(5) It may not be for every trifling breach, or every breach, that a party can withhold performance of part of the contract."

 

Having regard to the foregoing, Ms. Fyffe submitted that the pursuers in this action could not therefore insist on payment and the defenders were entitled to claim damages. She directed me to the judgments in Photo Production Limited v Securicor Transport Limited [1980] AC 827 and Lloyds Bank Limited v Bamberger 1993 SC 570. There are passages in the judgments of both Lord Wilberforce and Lord Diplock, which appear to have been approved by the Second Division in the latter case as being consistent with the law of Scotland, albeit Lord Wilberforce described what he was doing as making "supplementary observations." The English case concerned an exclusion clause in a contract for the provision of security services in relation to the operation of which a security guard employed by the defendants deliberately started a fire on the plaintiffs' premises which caused substantial destruction of the factory. At page 844, Lord Wilberforce expressed concern about the use of terminology where an event has occurred which creates a situation in which further performance of the primary obligations under a contract can no longer take place, as where the factory to be guarded is burnt down by one of the guards. Speaking of what he regarded as the misuse of the word "termination" in relation to such a contract, he said, "I have, indeed, been unable to understand how the doctrine can be reconciled with the well accepted principle of law, stated by the highest modern authority, that when in the context of a breach of contract one speaks of "termination," what is meant is no more than that the innocent party or, in some cases, both parties, are excused from further performance. Damages, in such cases, are then claimed under the contract, so what reason in principle can there be for disregarding what the contract itself says about damages - whether it "liquidates" them, or limits them, or excludes them ? These difficulties arise in part from uncertain or inconsistent terminology. A vast number of expressions are used to describe situations where a breach has been committed by one party of such character as to entitle the other party to refuse further performance: discharge, recission, termination, the contract is at an end, or dead or displaced; clauses cannot survive, or simply go. I have come to think that some of these difficulties can be avoided; in particular, the use of "recission," even if distinguished from recission ab initio, as an equivalent of discharge, though justifiable in some contexts may lead to confusion in others. To plead for complete uniformity may be to cry for the moon. But what can and ought to be avoided is to make use of these confusions in order to produce a concealed and unreasoned legal innovation: to pass, for example, from saying that a party, victim of a breach of contract, is entitled to refuse further performance, to saying that he may treat the contract as at an end, or as rescinded, and to draw from this the proposition, which is not analytical but one of policy, that all or (arbitrarily) some of the clauses of the contract lose, automatically, their force, regardless of intention."

 

Lord Diplock, at page 848 onwards, set out what seems to me, with respect, to be a very helpful analysis of the consequences of non-performance or inadequate performance of a contractual obligation in the following terms:-

 

"breaches of primary obligations give rise to substituted or secondary obligations on the part of the party in default, and, in some cases, may entitle the other party to be relieved from further performance of his own primary obligations. These secondary obligations of the contract breaker and any concomitant relief of the other party from his own primary obligations also arise by implication of law - generally common law, but sometimes statute, as in the case of codifying statutes passed at the turn of the century, notably the Sale of Goods Act, 1893. The contract, however, is just as much the source of secondary obligations as it is of primary obligations; and like primary obligations that are implied by law, secondary obligations too can be modified by agreement between the parties, although for reasons to be mentioned later, they cannot, in my view, be totally excluded......................Every failure to perform a primary obligation is a breach of contract. The secondary obligation on the part of the contract breaker to which it gives rise by implication of the common law is to pay monetary compensation to the other party for the loss sustained by him in consequence of the breach; but, with two exceptions, the primary obligations on the parties remain unchanged. This secondary obligation to pay compensation (damages) for non-performance of primary obligations I will call the 'general secondary obligation.' It applies in the cases of the two exceptions as well.

 

The exceptions are: (1) Where an event resulting from the failure by one party to perform a primary obligation has the effect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract, the party not in default may elect to put an end to all primary obligations of both parties remaining unperformed. (If the expression 'fundamental breach' is to be retained, it should, in the interests of clarity, be confined to this exception.) (2) Where the contracting parties have agreed, whether by express words or by implication of law, that any failure by one party to perform a particular primary obligation ("condition" in the nomenclature of the Sale of Goods Act 1893 {though not in Scotland - see s. 11(2)}), irrespective of the gravity of the event that has in fact resulted from the breach, shall entitle the other party to elect to put an end to all the primary obligations of both parties remaining unperformed. (In the interests of clarity, the nomenclature of the Sale of Goods Act 1893, "breach of condition" should be reserved for this exception.)

 

Where such an election is made (a) there is substituted by implication of law for the primary obligations of the party in default which remain unperformed a secondary obligation to pay monetary compensation to the other party for the loss sustained by him in consequence of their non-performance in the future and (b) the primary obligations of that other party are discharged. This secondary obligation is additional to the general secondary obligation; I will call it "the anticipatory secondary obligation."..............................When there has been a fundamental breach or breach of condition, the coming to an end of the primary obligations of both parties to the contract at the election of the party not in default, is often referred to as the 'determination' or 'recission' of the contract or, as in the Sale of Goods Act, 1893, 'treating the contract as repudiated.' The first two of these expressions, however, are misleading unless it is borne in mind that for the unperformed primary obligations of the party in default there are substituted by operation of law what I have called the secondary obligations."

 

In the Lloyds Bank case, which related to the failure of a purchaser to pay the contract price for heritable property on the due date giving rise to the sellers opting to "resile from the missives," Lord Justice Clerk Ross, at page 573, summarised the law as gleaned from the foregoing decision as:-

 

"(1) Where, as here, a contract has been rescinded by the innocent party as a result of material breach of contract by the party in default amounting to repudiation, both parties are absolved from future performance of their primary obligations under the contract.

(2) However, it is incorrect to say that in these circumstances the contract has come to an end. The innocent party may still bring an action for damages against the party in default for breach of contract."

 

In the light of these decisions, Ms. Fyffe submitted that it was the law of Scotland that parties can insert clauses in contracts which could survive recission which would entitle the pursuers to receive some payment for performance. I think, with respect to her, that that is a proposition which lacks clarity. What survives what Lord Diplock defined as a fundamental breach of contract are general and anticipatory secondary obligations. Thus, in my opinion, it is conceivable in the present case were I to conclude that the pursuers, by refusing to return to complete the contract, were in fundamental breach of it, that they might still be entitled to receive some remuneration for the contract works, but what they would not be entitled to would be the contract price. If for the sake of argument the work of installation had been satisfactory and all that remained was the decorative work and some snagging, then I would have been able to reach a conclusion on what that would cost, and that could be deducted from the contract price, representing a reasonable assessment of damages. The problem here is that not only are the works of installation incomplete, but they have been carried out in such an unsatisfactory manner that no effective repair can be carried out, in my opinion. Where the breach of contract is fundamental, for the party in default to get any payment, in my opinion there would require to be evidence of the worth of the work carried out to be set off against the cost of putting things right. I heard no evidence of the worth of the work carried out before the pursuers refused to complete the contract. In any event, submitted Ms. Fyffe, I should sustain the first, third and fourth pleas-in-law for the defenders and the level of damages should be as set out in the counterclaim under deduction of any sum I considered might still be due to the pursuers.

 

Ms. Fyffe's second proposition was, esto I was not satisfied that the pursuers were in fundamental breach of contract by their failure to complete the contract without justification, then in any event they were in material breach of the terms of the contract implied by the relevant provisions of the Supply of Goods and Services Act, 1982, in particular section 11.

She invited me to prefer the evidence of Graeme McDonald, with his specific experience in relation to sash and case windows, to that of the experts led by the pursuers, particularly Richard Paul, though on one view there was not really that much between them. She said that they disagreed on the subject whether new windows could or could not be made to appear to be in alignment with the existing window surrounds. It is not my recollection of the evidence of these witnesses that that was really in dispute at all. Mr. Paul spoke about settlement as a problem with properties in Broughty Ferry on account of the sandy subsoil in buildings of the age of that owned by the defenders and suggested that that might be an explanation for the windows being out of alignment. Mr. McDonald declined to speculate about the cause but instead adopted the position that windows specifically made to fit the window spaces should not appear to be out of alignment, whatever the cause of that might be. In a sense where they were really in dispute was over who should bear the consequences of the windows appearing to be out of alignment and in that respect I agree with Mr. McDonald that the defenders were entitled to be supplied with windows which, when installed, fitted the existing spaces and did not appear to be out of alignment with the rest of the building. I do however agree with Ms. Fyffe's second observation in relation to conflicts in the evidence between Mr. Paul and Mr. McDonald to the effect that the evidence of Mr. McDonald is based on a more thorough and careful inspection than that undertaken by Mr. Paul, who failed to notice things that everyone else has described as present. In any event, it was now accepted by the pursuers that they had fitted the wrong standard of glass into the downstairs windows.

 

She then turned to the statutory provisions. I have already set out the terms of section 11A of the Supply of Goods and Services Act, 1982. In my opinion, the present contract can properly be categorised as a contract locatio operis faciendum. The learned authors of the Stair Memorial Encyclopaedia, at Vol. 3, para 6 on the law relating to building contracts say, "Writers at least since Gaius have commented that it is often difficult to distinguish contracts for work and materials from contracts of sale. This is particularly the case where one party engages another to provide some non-fungible moveable subject to him (for example, an artist to paint his picture, a jeweller to make him a ring, a tailor a suit, or indeed a specialist sub-contractor to furnish a component of a building). Where the materials are provided by the employer, the contract will normally be location; where by the contractor, normally sale. Where the contract is for installation and commission as well as supply, it is probably location. The distinction is perhaps of more importance than it was prior to the enactment of the Sale of Goods Act 1893 (c 71) (now 1979), which does not apply to contracts for work and materials: as a consequence important matters such as the time when property passes may depend on whether or not the contract is characterised as one of sale." One of the cases cited in support of this proposition is R & J Dempster Ltd v Motherwell Bridge and Engineering Co Ltd. 1964 SC 308, where a contract made in the peculiar post war conditions of steel shortage and a shortage of oil storage tank capacity provided for reservations of part of the pursuers' steel quota and manufacturing capacity for a three year period for the benefit of the defenders, without specifying any price, was held not to be a contract for the sale of goods in which the fixing of a price would have been an essential term of the bargain. That case strikes me as being peculiar to its own facts but it remains a useful illustration of the importance of categorising the nature of the contract particularly for the purpose of determining whether it is a contract to which statutorily implied terms apply. A better illustration is to be found in John Thorburn & Sons v Border Harvesters Limited 1992 SLT 549, a case involving the supply and installation of a grain dryer wherein Lord Murray, giving the leading judgment, at page 552C onwards, recorded the argument that such a contract was not a contract for the sale of goods but a mixed contract of sale and works. If this were a contract of sale then it would be an excepted contract for the purposes of the 1982 Act - see s.11A(2). However, s.11A(3) states that for the purpose of the application of the Act to Scotland, a contract is a contract for the transfer of goods whether or not services are also provided under the contract, and (subject to subsection 2) whatever is the nature of the consideration for the transfer or agreement to transfer. Not without some hesitation I have come to be of the conclusion, having regard to the foregoing authorities, that a contract locatio operis faciendi is a contract for the transfer of goods which is not a contract for the sale of goods and that sections 11A to 11F of the 1982 Act apply to such a contract. That was Ms. Fyffe's submission. Following from that, she submitted that that meant that s.11D accordingly applied to this contract and implied into the contract a term that the goods supplied under the contract are satisfactory, in terms of 11D(2) and (3) and in terms of (5) and (6) are reasonably fit for the purpose for which such goods are normally supplied. The transfer has to be in the course of a business and Ms. Fyffe submitted that this was such a transfer, which seems uncontroversial. In relation to the question of fitness for purpose it is also necessary that the customers make clear what the purpose of the goods is to be but having regard to the evidence about the nature of the contract being the replacement of six existing windows, I cannot see that there can be any scope for doubt that the pursuers knew what the precise purpose of these windows was to be. Miss Fyffe submitted that in this case the goods were not of satisfactory quality. I have some difficulty with that proposition standing the terms of section 11D(2) which are less than helpful in this context. Here the evidence appears to demonstrate, at least on one view of it, that, on delivery, the goods were of satisfactory quality. If it is correct to describe them as having ceased to be of satisfactory quality, that was on account of the unsatisfactory process of installation. For the moment I remain unconvinced that this provision applies, though I accept that from the defenders' perspective the end result was unsatisfactory. I have, however, much less difficulty with the question of fitness for purpose. As Ms. Fyffe submitted, at the point where the pursuers declined to return to complete the contract, though the basic installation of the windows had been completed, all three windows on the ground floor had been fitted with the wrong standard of glass, some were hard to open, some had been damaged by the process of installation, the top floor windows were out of alignment, and wood which did not match had been used to effect patch repairs. The wrong standard of glass meant the windows did not conform to Building Regulations and were thus unfit for the purpose of use as downstairs windows. The upper floor windows which appeared to be out of alignment were unfit for the purpose of replacing windows which were not out of alignment. The frames ought not to have been split and the windows ought to have operated easily by using the cords or raising them normally by using the handles. All these defects rendered them unfit for use as replacement sash and case windows.

 

Miss Fyffe then moved to Section 11F of the 1982 Act which provides remedies for breach of a contract for the transfer of goods. It provides that "(1) Where in a contract for the transfer of goods a transferor is in breach of any term of the contract (express or implied), the other party to the contract shall be entitled (a) to claim damages; and (b) if the breach is material, to reject any goods delivered under the contract and treat it as repudiated." Sub-section (2) provides that where, as here, the contract for the transfer of goods is a consumer contract and the transferee is the consumer, breach of the implied term as to the fitness for purpose is to be deemed to be a material breach. That would seem to mean that the defenders would be entitled to reject the goods delivered under the contract and treat the contract as repudiated. It was Ms. Fyffe's submission that on this second ground, the pursuers were also in material breach of contract and were entitled to treat the contract as repudiated. She again submitted that damages should be assessed having regard to the counterclaim under deduction of any sum which I determined ought to be paid to the pursuers.

 

Her next submission was that if I did not accept that the contract had been brought to an end by either of the preceding means, then the defenders were nonetheless entitled to claim damages for breach of contract and would be entitled to retain the sum sued for, given that it was the contract price, and set it off against their claim for damages. She referred to Bell's Principles at para. 71 - "As a pursuer in an action upon a mutual contract must show that he has performed or offered to perform his part of the contract, it is open to a defender to deny and disprove that he has done so, not merely to the effect of relieving himself from the fulfilment of the counterpart so far as unperformed, but of retaining or appropriating monies due under the contract in payment of damages arising out of the other's breach." She also referred to Civil Remedies by Professor D.M. Walker at page 59 onwards and to the cases of British Motor Body Co. Ltd v Thomas Shaw (Dundee) Ltd 1914 SC 922; Laurie v British Steel Corporation 1988 SLT 17 and Bank of East Asia v Scottish Enterprise 1997 SLT 1213. She invited me to prefer Mr. McDonald's evidence in this context to the effect that at least some of the windows required to be replaced and that that could not be done in a way that would comprise a reasonable aesthetic match with what remained. Accordingly, the inevitable result of some of the windows requiring to be replaced was that all of the windows would require to be replaced so that the defenders received what they had contracted for, namely a set of six matching windows to replace those which had been removed. In terms of the joint minute, the cost of effecting the total replacement of the windows was agreed to be £8,750, inclusive of VAT, and she submitted that this would comprise a reasonable award of damages to complete the window replacement contract. She asked me to sustain pleas-in-law 4, 5 and 6 for the defenders in the principal action and to sustain the crave of the counterclaim.

 

Finally, she submitted that this was a case in which the defenders were entitled to damages on account of the delay, worry and distress which they had been occasioned by the pursuers' breach of contract. Both defenders had given evidence about the profound effect on each of them that had been occasioned by the dispute and the concomitant delay. They had attempted to resolve matters both personally and with the assistance of their solicitors without success. They had put forward reasonable compromise proposals which had not been accepted. They had been left with a sub-standard and incomplete installation instead of the new set of attractive and functioning windows which they had been entitled to expect. The second defender had had a serious illness and money intended for use to celebrate their 40^th. wedding anniversary had had to be committed to funding their defence. They had suffered considerable anxiety and stress. The defenders were not wealthy but hard working ordinary people who had been prepared to part with their good money for the provision of attractive and functioning new windows in place of the old ones. She referred to Diesen v Samson 1971 SLT (Sh. Ct.) 49, a decision of Sheriff J.M. Peterson at Glasgow Sheriff Court, and Watson v Swift & Co's Judicial Factor 1986 SC 55 as authorities for the proposition that where a contract was not primarily a commercial one but one which affected the personal, social and family interests of the claimant, then damages could competently be awarded. This was such a contract and, accordingly, such damages reasonably estimated in the sum of £4,000 should be awarded. I also suggested to parties that the judgment in Martin v Bell Ingram 1986 SC 208; 1986 SLT 575 was worthy of consideration. I appreciate that that was an action based in delict but it has been said on more than one occasion, for example by Lord Morison in the Swift case, that there is no distinction to be applied in a case where there has been a negligent breach of a contractual duty, to the assessment of damages for breach of contract on the one hand and breach of the duty of care on the other. At para. 22-104 of The Law of Contract in Scotland, at page 659 of the Third Edition, Professor McBryde acknowledged the competency of a claim for solatium for breach of contract and distinguished that from a claim for inconvenience which was another recognised head of claim.

 

 

Decision:

 

[12] I considered that Mr. McDonald could properly be regarded as an expert witness who had taken time and trouble over his inspection and report and whose evidence to the court was measured and acknowledged the limitation under which he had to operate with regard to what can I think be considered to be the major problem of misalignment, namely that unless the windows were taken out, it was impossible to reach any definitive conclusion as to why they presented as being out of alignment. Where the evidence of the other independent witnesses did not correspond with his, then I preferred his evidence. I also consider that his conclusions are justified and, in particular, given the agreed price for the installation of these windows, that the defenders were entitled to expect that the well manufactured windows would not suffer significant damage in the course of defective installation, that the new windows would fit the gaps left by the old windows and that they would function adequately as sash and case windows should. Instead the defenders were presented with windows that were damaged in the course of the installation, with upstairs windows that appear to be misaligned, with a range of colouring of timbers beyond acceptable natural variations, with splits in the frames caused by poor installation and with glass panes in the lower windows of the wrong standard for compliance with Building Regulations. This is neither satisfactory nor acceptable and in my opinion it can properly be said, looking at the state of play at the time when the pursuers indicated they did not intend to return to carry out any further works, that the windows supplied and installed were not fit for the purpose for which they had been purchased, which purpose was known to the pursuers, being the purpose of replacing existing sash and case windows.

 

[13 I accept the evidence from Mr. McDonald that the cosmetic appearance of the installation is already compromised beyond acceptability and, when there is added to that the misalignment the cause of which is not established, there really is only one conclusion and that is that the entire installation requires to be removed and replaced. I also accept that £8,750 inclusive of VAT is an acceptable estimate of the cost of effecting such replacement and, in fairness to the pursuers, I should record that that was a matter of concession which seems to me to have been entirely properly made standing the evidence about the cost of replacement.

 

[14] The first question of law which I require to resolve is whether the defenders or either of them by their behaviour towards the employees of the pursuers acted in such a way by means of aggressive or threatening behaviour as to justify the conclusion that they were in material breach of contract, in turn justifying the pursuers not to undertake any further performance of the contract leaving the contract incomplete. The high point of the evidence offered by the pursuers about this was the evidence that the second defender had said on 18^th. January, 2010, to Messrs. Anderson and Kelly that if Mr Squire, their boss, came to the home of the defenders that night when the first defender would be present, then there would be "fisticuffs." Having heard Messrs. Alexander and Kelly on the one hand and the second defender on the other, I accept as a matter of fact her denial that she said any such thing and thus any possible basis for the refusal of the pursuers' workmen to return disappears. But even supposing she had said that there would be "fisticuffs," that does not in my opinion remotely approach the kind of behaviour which would amount to a repudiation of the contract. The matter is further resolved in favour of the defenders on a consideration of the correspondence which passed between the parties' agents in which the pursuers' agents transmitted an indication which they had presumably been instructed to give that the pursuers would not send staff back to the defenders' property "unless they have assurances that there will be no repetition of this behaviour," which was met with a denial of the allegations of abuse of the workmen but nonetheless an undertaking that "there would be no direct communication with your client's employees." They still did not return despite being given what they asked for. Accordingly, not only were the defenders not in material breach of contract, I do not regard them as having been in breach of contract at all. Esto they were, they remedied any non-material breach with their undertaking.

 

[15] The upshot of that, standing the decision in Wade v Walden(supra), is that by refusing to return to complete the contract for no good reason, the pursuers put themselves in material breach of contract. The consequences of so doing are well explained in the words of Lord Diplock in the Photo Production case (supra) and in effect give rise to a secondary obligation on the part of the pursuers to meet an award of damages representing the loss sustained by the defenders as a consequence of their material breach of contract.

 

[16] The foregoing would be a sufficient basis upon which to move to the assessment of damages but the defenders also argued that the defective nature of the installation entitled them to invoke the provisions of the Supply of Goods and Services Act, 1982, as amended, and in particular, the provisions of Section 11A. That section creates for the purposes of the law of Scotland the legal concept of a contract for the transfer of goods which is a contract under which there is an agreement for the transfer to another legal person of the property in the goods. The provision applies to all contracts where the property in goods is transferred except for contracts for the sale of goods or hire purchase contracts and it is accordingly important to be satisfied that this is not a contract for the sale of goods. It does seem to me to be a contract locatio operis faciendum, a contract for work and materials, given the essential feature to the performance of the contract of successfully installing windows which would function as windows and I refer back to the earlier references to the cases of Dempster and Thorburn which, in my opinion, support the conclusion that the present circumstances are indicative of a contract locatio operis faciendum. If that is correct, then this is not a contract of sale but another form of contract in which the property in goods, the windows and other materials used in connection with their installation, was intended to transfer and has transferred to the defenders. Section 11A of the 1982 Act accordingly applies.

 

[17] The application of s.11A to the circumstances then brings sections 11D and 11F, amongst others, of the 1982 Act into play. Section 11D(2) provides that where the transferor transfers the property in the goods in the course of a business, and the pursuers are in the business of manufacturing and installing windows, there is an implied term that the goods supplied under the contract are of satisfactory quality. There is no definition of what is meant by satisfactory quality and there were no submissions, beyond the provisions of Section 11D(3) which provides that "goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all other relevant circumstances." This seems to me to be a replication of the implied term as to quality in the Sale of Goods Act 1979, section 14(2). My difficulty is that the section focuses on the quality of the goods as opposed to the quality of the performance of the whole contract and the first defender conceded that the windows supplied to him by the defenders were very attractive. It does not sit comfortably with me to have to determine that well made windows which do not appear to fit properly into the gap in which they were intended to fit are "satisfactory" but there is an argument which I consider I need not resolve as to the point at which the unsatisfactory nature of the goods has to be determined in a contract for the transfer of goods.

 

[18] I regard it as unnecessary to reach a conclusion about the application of s. 11D(2) of the 1982 Act, as amended, as I am in no doubt that section 11D(5) and (6) do apply to these circumstances. Section 11D(5) provides that subsection (6) will apply where, under a contract for the transfer of goods, the transferor transfers the property in goods in the course of a business and the transferee, expressly or by implication, makes known to the transferor any particular purpose for which the goods are being acquired. In the present case, the pursuers are in the business of manufacturing and installing windows and the transfer of these windows to the defenders occurred in the course of that business. Given that these windows were to replace the existing windows at the defenders' home and the pursuers' employee carried out measurements there, the pursuers could not and did not dispute that the particular purpose for which the windows were required was expressly made known to them. By section 11(6) then, there is an implied term that the goods supplied under the contract would be reasonably fit for the purpose for which they were expressly intended. These windows were not reasonably fit for the purpose for which they were intended as they were not and apparently could not be satisfactorily installed.

 

[19] Section 11F(1) provides that where a party to a contract for the transfer of goods is in breach of any term of the contract (express or implied) the other party to the contract, the transferee, is to be entitled to damages and, if the breach is material, to reject any goods delivered under the contract and treat it as repudiated. Section 11F(2) provides that it will constitute a material breach of contract where the contract is a consumer contract - and that is to be determined by having regard to the provisions of s.25(1) of the Unfair Contract Terms Act, 1977, which provides :-

 

""consumer contract" means [subject to subsections (1A) and (1B) below ] a contract in which-

(a) one party to the contract deals, and the other party to the contract ("the consumer") does not deal or hold himself out as dealing, in the course of a business, and

(b) in the case of a contract such as is mentioned in section 15(2)(a) of this Act, the goods are of a type ordinarily supplied for private use or consumption;

and for the purposes of this Part of this Act the onus of proving that a contract is not to be regarded as a consumer contract shall lie on the party so contending;"

- if the goods are not fit for the purpose for which they were intended. This is a consumer contract as so defined. The defenders were not dealing or holding themselves out as dealing in the course of a business. Windows for a house are supplied for private use. In any event, the pursuers made no effort to prove that this was not a consumer contract. Accordingly, for the reasons already expressed, namely, the inability of the pursuers to provide windows for the upper floor of the defenders' house which appear to be properly aligned, because in the lower windows the wrong technical standard of glass has been fitted, because it is now impossible to patch repair the windows with timber of a reasonable match to what has been installed and because the woodwork of the windows has already been damaged by badly located catches etc, the pursuers have failed to supply goods reasonably fit for the express purpose for which they were intended. It follows that the defenders, if they chose to do so, could reject these goods and repudiate the contract. Alternatively, they would be entitled to damages in respect of the pursuers' breach of contract.

 

[20] As I understood Ms. Fyffe's submission in this respect, the defenders seek damages for breach of contract. In this case the outcome is, in my opinion, substantially the same whether or not they choose to reject the goods. The purpose of the contract has been completely undermined. The only way forward is the complete replacement of the windows. That amounts to de facto rejection of the goods if not de jure. Parties were agreed that, if that were the conclusion of the court, the cost of complete replacement was agreed at £8,750 and I shall grant decree for that sum.

 

[21] The remaining head of damage was described by Ms Fyffe in her submission as a claim for stress. In Diesen's case, Sheriff Peterson describe the nature of the loss for which damages were sought as being for "injury to feelings." In the course of his judgment, he quoted a passage taken from the standard English textbook, Mayne and McGregor, 12^th. edition, at page 44, where the authors made reference to "mental distress" and "mental suffering," without defining either of these terms but the impression I have is that they are used to distinguish the position from physical harm or injury, and what is said is that "If, however, the contract is not primarily a commercial one, in the sense that it affects not the plaintiff's business interests but his personal, social and family interests, the door is not closed to awarding damages for mental suffering should the court think that in the particular circumstances the parties to the contract had such damage in their contemplation." In Watson's case, Lord Morison considered he could make an award of damages for "distress" following a reference to the same passage from Mayne & McGregor. It seems to me that the contract in the present case is not primarily of a commercial nature but is the provision of an important set of items for the enjoyment of people in a home setting, and in the same way as damages have been awarded for distress caused by uncertainty about being unable to sell property because a clear title was not obtained, in breach of contract, or where a wedding photographer failed to appear in breach of contract and there are virtually no pictures of the happy occasion, thus causing distress, where a mess is made of an installation of some new item into a person's home, as with the construction of extensions, the installation of new kitchens, bedrooms or bathrooms or, as here, the installation of new windows, then it must be within the contemplation of those in business who transfer goods to consumers in the course of that business for use and enjoyment in a home setting, that if they undertake performance of their contract badly, then that may well cause distress to the transferees. In the present case, it was evident when the first defender briefly broke down in the course of giving his evidence when telling me that it was the second defender who wanted the replacement windows and he wanted her to have them installed and be happy with them at a point where he did not know if she would survive the serious illness from which she had been suffering, it became very clear to me just how stressful to him the unsatisfactory contractual performance of the pursuers had been. The defenders' pleadings at Art. 4 of the counterclaim also make reference to inconvenience and there will clearly be future inconvenience to the defenders in having another set of tradesmen remove the badly installed windows and replace them. It is impossible to put any precise sum on the level of damages appropriate to this kind of award. Suffice it to say that in relation to the combination of inconvenience and distress, I consider that an appropriate award to the defenders would be one of £3,000.

 

[22] Neither agent made any representation to me about interest on any award. In the counterclaim, interest is sought at 8% from citation. In the absence of any submission to the contrary, I shall award interest from citation at 8%.

 

[23] Since there may be issues in relation to expenses which can only be dealt with once the terms of my decision otherwise are known, I shall assign a hearing on expenses, and shall meantime reserve all questions relating to expenses until that date.

 

[24] Finally, I should record my gratitude to Ms Fyffe for her careful and thorough submissions and references to authority.