Abbey Developments Ltd v PP Brickwork Ltd [2003] EWHC 1987

 

Abbey Developments Ltd v PP Brickwork Ltd [2003] EWHC 1987

 

Abbey Developments Ltd (Abbey) engaged PP Brickwork Ltd (PPB) as a labour-only subcontractor for the execution of brickwork and blockwork on a project. Clause 2 of the conditions of sub-contract empowered Abbey to increase or reduce the quantity of work. The question was whether this enabled Abbey to determine the entire sub-contract.

The Court considered that a sub-contract for the execution of work confers on PPB not only the duty to carry out the works, but the corresponding right to be able to complete the work which it was sub-contracted to carry out. The work has to be defined for there to be a right to execute it. To take away or to vary the work is to be considered an intrusion into and an infringement of that right and a breach of sub-contract. Hence, sub-contracts generally contain provisions to enable the contractor to vary the sub-contract works in order to achieve lawfully what could be achieved without breaking the sub-contract or by a separate further agreement with the sub-contractor. By entering into a sub-contract with a variations clause, such further agreement is obviated, as the sub-contractor’s consent to changes in the sub-contract works is in the primary sub-contract.

However, the Court considered that provisions entitling the contractor to vary the sub-contract works have to be construed carefully so as not to deprive the sub-contractor of its contractual right to the opportunity to complete the works and realise such profit as may then be made. Reasonably clear words are needed in order to remove work from the sub-contractor simply to have it done by somebody else, whether because the prospect of having it completed by the sub-contractor will be more expensive for the contractor than having it done by somebody else, although there can well be other reasons such as timing and confidence in the original sub-contractor.

Abbey Developments Limited v PP Brickwork Limited HT-03-73 [2003]