The High Court has found that McCabe Builders (Dublin) Limited and three development companies did not conclude a contract for a housing scheme at Kilmacanogue, County Wicklow, because they never agreed on central terms defining the work and how changes would be paid for.
Mr Justice Charleton ruled that McCabe was entitled to reasonable payment for work already done, to be assessed on a quantum meruit basis. He said the amount was for arbitration. The judgment did not determine that amount or resolve all the parties’ disputes about the work.
The dispute concerned a scheme initially described as 30 houses, later increased to 32, and 14 apartments. McCabe tendered €17,222,620 excluding VAT in July 2005. Following negotiations, the parties signed a letter on 5 August recording a price of €15.3 million plus VAT. A letter of intent later authorised work up to €1 million while a full contract remained unsigned.
The developers argued that the 5 August letter and related tender documents defined a fixed-price contract, with descriptions in the Bill of Approximate Quantities forming part of McCabe’s obligations. McCabe maintained that the signed RIAI “blue form” contract made the bill a Schedule of Rates, while the drawings and specifications defined the work. The court found that the documents and negotiations did not settle which work was included or how variations would be treated.
The judgment noted that the blue form was signed by McCabe in January 2006, after work had begun, and that the parties’ understandings remained sharply different. The judge found that the developers had not clearly incorporated the bill’s descriptions into the contract obligations. He also found that neither side had reached agreement on the fundamental terms needed to define those obligations.
The parties had raised numerous disputes about the project, including rock excavation, delays, site access, changes to specifications and utilities. The judgment said the amount of rock removed was disputed and could be between 300 and 7,000 cubic metres; that issue, among others, could only be resolved by arbitration after the judgment.
The court declined to declare contractual terms because it found no concluded contract. It indicated that the arbitrator should assess reasonable competitive value for the work, taking account of reasonable remuneration for McCabe as a building contractor. The judgment said the valuation should reflect values prevalent in 2005, when the dealings that led to the work began. It described the liability for that reasonable recompense as joint and several against the defendants.