| Date | 18 August 2004 |
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| Judgment | Dawber Williamson Roofing Ltd v Humberside County Council, QBD 22 October 1979 |
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| The Issue | Ownership of unfixed goods and materials delivered to site. |
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| Implication |
In the event of the insolvency of the main contractor, until it has been paid a sub-contractor remains at risk for the value of unfixed goods and materials which have been included in interim payment certificates under the main contract. |
printMaterials and goods brought onto a construction site by the contractor will remain its property, in the absence of any provision in the contract to the contrary, until they are built into the works. At this point they will become the property of the owner of the land upon which the works are being built. Once title has passed in this way the contractor cannot, without an express right in the contract, remove the materials. It is of course commonplace in standard form construction contracts to find a clause entitling the contractor to be paid for unfixed goods and materials delivered to site. Such clauses will provide that once payment is made for materials and goods, ownership will pass to the employer. The main objective is to provide cash flow to the main contractor. This straightforward arrangement is of course more difficult to apply in the situation where it is a sub-contractor that is delivering materials and goods to the site. In 1979 the case of Dawber Williamson Roofing Ltd v Humberside County Council examined the contractual arrangements for the ownership of goods and materials in a dispute between the employer and a domestic sub-contractor. Although the case led to an amendment to the JCT conditions these issues occasionally still cause difficulty. Humberside had entered into a main contract under the then prevailing JCT Standard Form with Taylor and Coulbeck for the construction of a school near Cleethorpes. Taylor and Coulbeck had in turn entered into a sub-contract with Dawber for supply and fix roofing works. The project was running late and Dawber had been prevented from commencing its works. Despite this, Dawber had agreed to deliver 16 tons of roofing slates which were neatly stacked on site awaiting completion of the roof carpentry works to allow the roofing to be commenced. Dawber rendered an invoice for the slates amounting to some £4,000 and Taylor and Coulbeck included the value of those slates within its next interim application for payment which was duly certified and paid. Six weeks later Taylor and Coulbeck went into liquidation. The roofing works had still not commenced and, perhaps unsurprisingly, Taylor and Coulbeck had not paid Dawber a penny for the slates. As soon as Dawber were advised of the liquidation they sent transport to site to collect the slates. Humberside refused to allow them access to do so. Letters were exchanged between the parties but Humberside dug its heels in, refusing Dawber permission to enter the site and remove the slates. Humberside asserted that two clauses of the contract operated to give them proper ownership of the materials. Clause 25(4) of the main contract provided that in the event of bankruptcy of the main contractor, title to any goods on site passed to the employer. Additionally, by clause 14(2) of the main contract any goods paid for under an interim certificate issued under the main contract became their property. Dawber responded that they were not in the least bit interested in the arrangements that might exist under the main contract to which they were not a party. The plain fact was that under their sub-contract they had not been paid for the slates and therefore, as far as they were concerned, the slates still belonged to them. A curious twist to the story at this point is that whilst Humberside had possession of the slates they did not have anyone to fix them, and so they entered into a fix-only contract with Dawber for the completion of the roofing works using the slates which were lying on site. The roofing works were completed but the dispute concerning payment for the slates continued. Inevitably these matters ended up in court. The judge quickly dismissed the arguments put forward by Humberside. It may have paid the main contractor for the slates but the main contractor did not have good title in the first place which could be transferred to the employer. There was no privity of contract between Dawber and Humberside and therefore Clause 14(2) of the main contract had no application. Dawber remained the owners of the slates and title did not pass until the slates were fixed or until payment had been made. It made no difference that the sub-contract contained a provision that the sub-contractor was deemed to have knowledge of the relevant provisions of the main contract. That did not create a situation where Clause 14(2) of the main contract was incorporated into the sub-contract and binding upon the sub-contractor. The provisions of the main contract were therefore ineffective to protect the situation of the employer who, having already paid the main contractor for the slates, would have to pay a second time to the sub-contractor if it wished to obtain ownership of the slates. Judgment for the full value of the slates was granted to Dawber. Since that case the JCT standard forms have been amended in an attempt to safeguard the interests of the employer. These provisions remain valid in the latest JCT main and sub-contract forms. Clause 19(4) of the main contract makes it a condition of any sub-letting to a domestic sub-contractor that the sub-contract must contain terms to the effect that once materials and goods are delivered to site by the sub-contractor and included in interim certificates under the main contract, the sub-contractor shall not deny that good title has passed to the employer. Providing that arrangement is properly in place within the subcontract, the risks considered in the Dawber case will be effectively transferred from the employer to the sub-contractor.
CJ-0433
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