The case of “Mr & Mrs Athwal -v- Mr Rochester” involved a sole trader builder, Mr Rochester, who had commenced the construction of a house extension for Mr and Mrs Athwal, but due to a heart attack Mr Rochester was unable to complete the works. Mr Rochester sought part payment on the basis that the contract had been frustrated by his ill health. The Athwal's refused to pay on the basis that the contract had been terminated when Mr Rochester failed to complete the construction.
The Technology and Construction Court considered whether a building contract could be deemed to be a personal contract and therefore be capable of frustration as a result of the ill health of the builder.
Mr Rochester (“the Builder”) was contracted by Mr & Mrs Athwal (“the Claimants”) in 2006 to undertake extension building work to their property in Wombourne, Staffordshire. Work began in August 2006. On the 5th April 2007 the Builder suffered a heart attack and was taken to hospital. He subsequently underwent surgery and was advised not to return to work. The Builder was never able to return to the Claimants'house. The work came to an end in April 2007 at which stage it was incomplete. The Claimants alleged that the Builder was in repudiatory breach of contract.
Martin de Ridder, associate solicitor and head of dispute resolution at Ansons Solicitors who was instructed to act on behalf of the Builder alleged that the contract was discharged by frustration.
Where a contract is frustrated it is automatically terminated and the parties' ongoing obligations to each other are brought to an end. It is possible for a party to that contract to recover a sum which the court considers is just in respect of those goods or services provided prior to the frustrating event.
The Claimant referred the Court to a past case which suggested that building contracts generally were not considered to be personal contracts and were therefore incapable of frustration. The existing case law involving contracts frustrated by the ill health of an individual concerned master/servant or employer/employee relationships.
In this case the Judge held that the Builder was chosen personally because he was known and trusted by the Claimants, having previously worked for them and other members of their family.
It was significant in this case that the Builder was in effect a sole trader who had no employees and it would not have been possible for him to communicate to others what was needed to complete the work after his heart attack. The Judge also held that sub-contracting (which occurred in this case) is not inconsistent with a personal relationship.
In the circumstances the Judge concluded that this was a personal contract and the contract was frustrated as a result of the Builder's illness and that accordingly the Builder was entitled to payment of a just sum pursuant to section 1 of the Law Reform (Frustrated Contracts) Act 1943.
The case establishes that a building sub-contract can be frustrated by the ill health of a key party provided it can be categorised as a personal contract.
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