PROVING THINGS 50: TO PROVE BREACH OF CONTRACT YOU FIRST HAVE TO PROVE THAT THERE WAS A CONTRACT
The judgment of Mr Justice Stuart-Smith in Secker -v-Fairhill Property Services Ltd  EWHC 69 (QB) may contain an important lesson about pleading as well as evidence. The claimant’s claim could not be put in negligence and her case based on breach of collateral contract failed. The claimant failed to establish that there was any collateral contract. There is no guarantee that the claimant would have succeeded if had been able to frame her claim in negligence, however the action failed because of the absence of any evidence that a collateral contract existed.
- The claimant’s claim for damages was confined to a claim for breach of a collateral contract.
- Permission to amend to plead allegations of negligence and a claim under the Defective Premises Act was refused.
- The claimant’s evidence did not support the assertion that a collateral contract existed.
- The claimant’s case failed.
The claimant was seriously injured and left paralysed in all four limbs, after tripping up over a paving stone in her garden. The home and garden had been newly built. The defect had been noted and the builder promised to attend to it.
The action was pleaded in breach of contract. The claimant made an application to amend the Particulars 12 days before the date fixed for the trial of liability. The court allowed a claim for breach of contract that was collateral to the main contract, it refused permission to amend to plead a case in negligence. On the second morning of the trial the claimant applied for permission to amend the claim pursuant to the Defective Premises Act 1972. That application was refused.
By the end of the trial the only issue the claimant relied upon was the claim for breach of collateral contract (that claim that had been allowed by amendment shortly before the trial).
The judge accepted most of the claimant’s evidence as to the circumstances of the accident. He also accepted that promises had been made by one of the defendants to remedy the paving stone.
The Claim Based on Collateral Contract
“[T]here was a collateral contract between the Claimant and the Second and Third Defendants whose terms and breaches were as follows.
PARTICULARS OF COLLATERAL CONTRACT CLAIM
(i) The Second and Third Defendants entered into a collateral contract with the Claimant, whereby in consideration for her agreement to buy the Property as above, the Second Defendant agreed that he would ensure that following completion, he would deal with and correct defects (or ‘snags’) which the Claimant identified after she had moved into the Property.
(ii) Following completion, as set out above, the Claimant did tell the Second Defendant about certain defects and asked him to correct them. Some of the defects identified were corrected in accordance with the terms of the collateral contract.
(iii) However, in breach of the collateral contract, the Second Defendant did not rectify other defects as the Claimant complained of as above.
There is no technical reason why there could not be a collateral contract in the terms pleaded. The alleged collateral contract was neither itself a contract for the sale of an interest in land nor part of a composite transaction for the sale of an interest in land; nor was the sale of the property to Mrs Secker made conditional upon the fulfilment of the obligations imposed by the alleged collateral contract: see North Eastern Properties Ltd v Coleman  1 WLR 2715 at -. The question is therefore whether the requirements for the existence of a collateral contract have been satisfied.
The Defendants make the point that all of the formal negotiations between the parties as conducted through the medium of solicitors emphasised that, under the main contract, Mrs Secker was buying the property as was: see  to . That is factually correct, but it only goes to emphasise why a person buying a new build property might want extra-contractual comfort that snagging defects would be dealt with by the builder. It would have been a compelling argument against the existence of the implied term of the main contract that the Claimant originally pleaded, and appreciation of its potency may have informed the decision to abandon that basis of claim; but it is far less potent in relation to the allegation that there was a collateral contract.
The prerequisites for a collateral contract include the basic requirements for the existence of any contract. As is implicitly recognised by the form of the pleading that I have set out, there must be both offer and acceptance backed by good consideration; there must be an intention that the offer and acceptance should give rise to binding contractual relations; and there must be reasonable certainty of terms. It would be unrealistic to expect lawyerly precision in the context of what was a relatively informal conversation between Mrs Secker and Mr Goulding, but there must be sufficient clarity to enable the parties’ respective obligations to be identified.
Taking Mrs Secker’s evidence at face value, it does not support the existence of a collateral contract based upon an assurance that defects would be remedied either generally or in the terms pleaded. Her evidence establishes, and I accept, that she was concerned about the possibility of snagging defects and wanted to know what would happen if there were any. So far so good. But her evidence is that Mr Goulding did not say anything which can properly be interpreted as meaning that if she entered into the main contract he would undertake a direct contractual obligation to her to remedy defects. Instead, as set out at  above, he told her that he already had an obligation under the NHBC scheme to remedy defects, which was true. At its highest, it was on the basis of that information (namely that he had an obligation under the NHBC scheme) that she was content to go ahead. She readily accepted that he had explained to her that it was because he was a member of the NHBC scheme that he was obliged to put things right: it was the NHBC scheme that was her guarantee that snagging works would be done. On her evidence she neither sought nor obtained a separate undertaking to assume an obligation or liability directly to her in addition to his obligations as a builder involved in the NHBC scheme if she bought the house.
Her reliance upon the existence of the NHBC Scheme is shown both by the terms of the conversation with Mr Goulding and also by the steps taken by her solicitors to ensure that it was in force and that the property was properly identified. In that context her solicitors’ express advice that, if she expected the vendors to remedy or pay for remedying any defects, special conditions would have to be added to the contract is material (though not determinative). That was not done. It was not done because Mrs Secker relied upon the existence of the NHBC guarantee, which she understood to be what obliged Mr Goulding to carry out snagging works.
Nor can any weight be placed upon the short passage in the cross-examination of Mr Goulding, which I have set out at  above. The mere fact that Mrs Secker bought the house after a conversation to the effect that if there were any problems after she moved in he would come and sort them out does not evidence or establish that she agreed to purchase the house in consideration for his assurance; nor does it evidence or establish that in consideration for her agreeing to buy the house he agreed as a separate contractual obligation to her to ensure that he would deal with and correct defects or snags which she identified after moving in.
In the light of my conclusion that there was no collateral contract, the claim as now advanced must fail.”
The proving things series
- Proving things 1: Civil Evidence Act notices will not cut it
- Proving things 2: evidence to support a claim for damages must be pitch perfect.
- Proving things 3: the complete absence of evidence means the court will not speculate
- Proving things 4: Witnesses who just aren’t there.
- Proving things 5: witness statements and failing on causation.
- Proving things 6: “That’s what I always do” & proving causation.
- Proving things 7: If you don’t prove a loss you don’t get an order.
- Proving things 8: a defendant must prove that a failure to wear a seatbelt made a difference.
- Proving things 9: the role of experts
- Proving things 10: “He said, she said”: the difficulties of recollection.
- Proving things 11: Lies, damn lies and…
- Proving things 12: That oral contract is not worth the paper its written on.
- Proving things 13: Loss, there was no loss.
- Proving things 14: proving mitigation of loss
- Proving things 15: damages and evidence: going back to College
- Proving things 16: if you don’t prove it you don’t get it.
- Proving things 17: Heads of damage that were “entirely bogus”
- Proving things 18: Damages; Car hire; Proof & Summary Judgment
- Proving things 19: prove service or you could be caught out.
- Proving things 20: allegations of improper conduct have to be prove
- Proving things 21: when the whole process of investigation is flawed
- Proving things 22: damages, mitigation part 36 (and bundles).
- Proving things 23: serving important evidence late
- Proving things 24: Damages & the “But for test”: when it gets really complexProving things 24: Damages & the “But for test”: when it gets really complex
- Proving things 25: Attempts to smuggle in witness statements do not help (and carry no weight).
- Proving things 26: distinguishing between what you can remember and what you now think you did.
- Proving things 27: Burdens of proof, hearsay evidence and… attempted murder.
- Proving things 28: make unwarranted personal attacks and use a “mud-slinging” expert: that always ends well.
- Proving things 29: Make sure the witness evidence deals with the relevant issues
- Proving things 30: Office Gossip Proves Nothing: The importance of the source of information and belief.
- Proving things 31: witnesses tend to remember what they want to remember.
- Proving things 32: Damages claim struck out as unsustainable: application to amend refused.
- Proving things 33: causation and the burden of proof in claims against solicitors.
- Proving things 34: There is no primer for scuttlers: when your ship doesn’t come in.
- Proving things 35: Reconstruction, documents & memory.
- Proving things 36: credibility and contemporaneous documents.
- Proving things 37: An approach to damages that was “fundamentally deficient throughout”.
- Proving things 38: Proving inability to pay on a security for costs application.
- Proving things 39: You can spend £10 million in costs and still not prove your case.
- Proving things 40: No evidence – no loss.
- Proving things 41: Proving damages – you are not going to get a second bite of the cherry.
- Proving things 42: silence does not prove inducement.
- Proving things 43: How the Court decides: a Primer.
- Proving things 44: Findings of Fact, Walter Mitty and Witness Training.
- Proving things 45: If you can’t prove loss the defendant is going to get summary judgment.
- Proving things 46: Late theories advanced by experts rarely help.
- Proving things 47: Fire in the loft: it wasn’t the mouse man at all.
- Proving things 48: valves, floods, models and causation.
- Proving things 49: it is difficult to prove damages when the opinion evidence in your witness statement has been struck out.