Williams v Roffey Brothers & Nicholls (Contractors) Ltd

Factual and Procedural Background

The Plaintiff, a carpenter, was engaged by the Defendant, building contractors, to perform carpentry work under a sub-contract related to the refurbishment of 27 flats in a block known as Twynholm Mansions in The City. The original sub-contract was superseded by a written agreement dated 21st January 1986, setting a total price of £20,000 for carpentry work on the roof and first and second fix work in the flats. The contract implied interim payments at reasonable intervals, though not expressly stated.

The Plaintiff commenced work on 10th October 1985 and by 9th April 1986 had substantially completed a significant portion of the work, receiving interim payments totaling £16,200. By the end of March 1986, the Plaintiff was in financial difficulty due to the contract price being too low and inadequate supervision of workmen. On 9th April 1986, the Defendants promised to pay an additional £10,300 at the rate of £575 per flat completed.

The Plaintiff ceased work at the end of May 1986, after which the Defendants engaged others to complete the work and incurred a penalty for delay. The Plaintiff commenced this action in May 1987 claiming outstanding payments. The County Court judge entered judgment for the Plaintiff for £3,500 damages with £1,400 interest and costs and dismissed the Defendants' counterclaim. The Defendants appealed this decision.

Legal Issues Presented

1. Whether substantial completion of flats entitled the Plaintiff to payment under the agreement for additional sums promised by the Defendants.
2. Whether there was valid consideration supporting the Defendants' promise to pay an additional £10,300 beyond the original contract price.
3. Whether the Defendants' promise was unenforceable due to lack of consideration or public policy concerns.
4. Whether the Defendants could rely on the lack of completion of flats to withhold payment.

Arguments of the Parties

Defendants' Arguments

• The promise to pay an additional £10,300 was unenforceable for lack of consideration, as the Plaintiff promised to do no more than he was already contractually obliged to do.
• Payment was only due upon full completion of each flat, not on substantial completion, and the Plaintiff had not completed any additional flats fully.
• The consideration for the extra payment did not "move from the promisee" and thus did not satisfy contractual requirements.
• The additional payment was contrary to public policy, potentially amounting to an abuse of bargaining position.

Plaintiff's Arguments

• Substantial completion entitled the Plaintiff to payment, with only deductions for minor defects, relying on the precedent set in Hoenig v. Isaacs.
• The promise to pay the additional sum was supported by valid consideration, as the Defendants obtained practical benefits, including ensuring the Plaintiff continued work, avoiding penalties for delay, and avoiding the expense of engaging other contractors.
• The doctrine of economic duress did not apply, and no fraud or duress vitiated the Defendants' agreement.
• Modern legal developments and equitable principles support recognizing the promise as binding despite traditional strict rules on consideration.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed whether substantial completion entitled the Plaintiff to payment. Citing Hoenig v. Isaacs, the court held that substantial performance, with allowance for minor defects, was sufficient to trigger payment obligations, rejecting the Defendants' argument that payment was due only upon full completion.

Regarding consideration, the court acknowledged the traditional rule from Stilk v. Myrick that performing an existing contractual duty does not constitute valid consideration for a new promise. However, it refined this principle in light of more recent authorities, including Ward v. Byham, Williams v. Williams, and Pao On v. Lau Yiu Long, which recognize that a practical benefit or avoidance of a disbenefit can constitute valid consideration.

The court found that the Defendants obtained practical benefits from their promise to pay more, including ensuring the Plaintiff continued work, avoiding penalties for delay, and avoiding the cost of hiring replacements. There was no evidence of duress or fraud affecting the agreement. Consequently, the promise was supported by valid consideration and enforceable.

The court also considered but did not rely on estoppel as a possible alternative basis for enforcement, noting that the Defendants had not pleaded lack of consideration in their defence. The court emphasized that modern commercial realities justify a more flexible approach to consideration, especially where parties negotiate at arm's length and both derive benefit.

Finally, the court rejected the Defendants' public policy argument that the promise was an abuse of bargaining power, affirming that absent duress, contracts negotiated at arm's length should be upheld.

Holding and Implications

The court DISMISSED THE APPEAL, affirming the judgment in favour of the Plaintiff.

The ruling confirms that substantial performance can entitle a contractor to payment less deductions for defects and that practical benefits obtained by a promisor can constitute valid consideration supporting a promise to pay extra for work already contractually owed. The decision refines the traditional doctrine from Stilk v. Myrick, emphasizing a pragmatic approach aligned with modern commercial practice. No new precedent was created beyond clarifying the application of existing principles to the facts.