A light matter taken seriously

The contract was a JCT Design and Build. Building regulations required Unite to install emergency lighting into the nine-story block B and the six-story block C.

Unite was experienced in building student accommodation and had developed standard specifications for the project and since 1997 had used P4 products for emergency lighting.

The actual work was done by subcontractors and when Unite appointed Tudor Mechanical and Electrical Services (Tudor) to design and install the M&E work, the specification included P4’s Fastel and Fastlink emergency lighting system. Although there was no signed subcontract, Unite and Tudor acted as if a DOM/2 contract was in place.

Tudor had not worked with P4 before so when Tudor placed an order on January 20, 2003, based on P4’s faxed quote, P4 responded with an application for a credit account.

Tudor faxed this back the same day and P4 sent an order acknowledgement. Parts of the order were delivered from late February 2003 and in August 2003 Tudor and P4 agreed revisions to the order at additional cost.

However, by September Tudor and Unite were having problems and Tudor left site and reached Points of Agreement, covering, among other things, payment and terms.

Tudor then returned to site. By October P4 had delivered fittings worth £76,986.22 to Tudor but had only been paid £3,540.86. On October 15 Tudor tried to reschedule its debts. This failed and Tudor was placed into liquidation in May 2004. The liquidator only paid P4 a further £1,692.83.

P4 tried to recover the balance of the money from Unite by arguing Retention of Title. The court held that the faxes forming the Tudor/P4 orders had not contained P4’s conditions, which had been on the reverse, and as a result P4 had not retained title to the unpaid goods.

Furthermore, ownership of the goods vested in Unite by clause 21.4.5 of DOM/2 as most of P4’s goods were identifiable in the payments Unite had made to Tudor. The only exceptions were three type 830 fittings which Unite had installed itself, worth £387.

Moral: Fax both sides.