The Supreme Court ruled that an RIAI building contract without quantities bound McCabe Builders (Dublin) Ltd and three developer companies over works at Kilmacanogue, Co Wicklow. It allowed the developers’ appeal to that extent, but rejected their argument that an approximate bill of quantities formed part of the contract’s definition of the works.
The appeal concerned a building contract between McCabe Builders, the contractor, and Sagamu Developments Ltd, Laragan Developments Ltd and Hanly Group Ltd, described collectively in the judgment as the Hanly Group. The Supreme Court judgment was delivered by Mr Justice Murphy on 1 April 2009.
A letter exchanged in August 2005 recorded an intended fixed price of €15.3 million plus VAT and said the developers would cover extra costs on six provisional cost sums. Work began on site on 10 August. The High Court had found that the August correspondence was too uncertain to create contractual relations, and said payment for work already done should be assessed on a quantum meruit basis.
The parties later signed the RIAI “blue form” contract on 19 January 2006. It provided for a contract without quantities. The developers argued that descriptions in the approximate bill of quantities should nevertheless be treated as part of the contract documents and define the work required.
The Supreme Court held that the signed RIAI contract was binding. However, its terms said that the bill of quantities, except as a schedule of rates, could not confer rights or impose obligations beyond those in the contract documents. The court said that, without a special condition incorporating the bill’s descriptions, the drawings and specification defined the works. It described those materials as inadequate, but rejected the developers’ claim that the approximate bill supplied the contractual definition.
The court also said there was no evidence of a common mistake, so rectification of the contract could not arise. It referred to earlier cases and commentary about bills of quantities, but confined its conclusion to the contract terms and arguments before it. The judgment did not state a final amount payable for the work or make an order on that payment issue in the material provided.