But this week there was a fightback. A builder wrote – anonymously – about cowboy clients, those like Mrs Grumpy, who changes her mind umpteen times a day, sacks her architect, rows with her henpecked hubby for siding with the builder and is generally a pain in the bum.
Nearer to what usually happens in real life is the case of Mr & Mrs Daly and Mr Sheikh. This is a nice little story about doing the job for cash. You know what I mean, don't you? The two sides weigh each other up to see who is going to pop the question … "How much for cash?" or "Do you intend to pay in cash?" It's easy, isn't it? I build your extension for cash-in-hand, you evade VAT and I evade income tax. It is pure fraud, pure cheating, and pure crime – and deserves pure jail for both parties.
That's not what happened here. But the key argument was who offered cash to whom.
Mr Sheikh is the director of a small outfit called Middlesex Design and Build, or MDB. It agreed a contract with the Dalys for £125,000 to do work on their two-bedroom house in Stanmore, Middlesex. There is no doubt that the contract came into existence. It is what happened shortly after that is fun. Mr Daly said in court that Mr Sheikh told him he wanted to be paid personally in cash and did not want to put the job through his company. They shook hands on that. The Dalys apparently liked the idea of paying cash because they said it went hand in hand with the builder being responsible personally rather than through his limited liability company. And when a whopping great crack tore through the brickwork, Mr Daly reminded the builder that he was personally responsible. The reply of Mr Sheikh is unreportable.
Receipts in his personal bank statements were scrutinised. Only £1000 was found, but oddly there were substantial payments from his wife’s accounts …
Mr Sheikh tells a different story. Yes, you guessed it – he said paying cash was all Mr Daly's idea. After all, it didn't matter to him how he was paid. Then there was something to do with an insurance claim and Mr Daly is alleged to have told the builder not to whisper to anyone how much the job was costing. Mr Sheikh denied asking to be paid in cash and said he didn't do contracts in his own name.
So, how did a judge decide when faced with such a conflict of evidence? He looked at the conduct of builder and client after this so-called agreement. Mr Daly paid £70k in cash. On an insurance matter, he referred to the builder as MDB, rather than Mr Sheikh. The Dalys' solicitor also referred to MDB as the builder. As for Mr Sheikh, he doesn't seem to have rendered any accounts at all. He could show several invoices to MDB for building materials; others had no delivery address. He pointed to cash going into MDB's bank account but it only came to £7500. When asked where the rest of the cash had gone to, he said it was used to pay labour-only subbies. Surplus cash was apparently stuffed into his wallet. His personal bank statements were scrutinised for signs of receipts. Only £1000 could be found. Oddly, there were a number of substantial payments from his wife's accounts to his. I expect you understand all this, don't you?
The judge now had to get to grips with all this. He said it was a lamentable but well-known fact that cash transactions, done to evade tax and VAT, are commonplace, not least in the building trade. Mr Sheikh intended that neither his accountant nor anyone else would find out. The judge could see all the so-called advantages to the builder. But he could not see why Mr Daly should have proposed paying cash. He was satisfied that Mr Sheikh "habitually evades paying corporation tax, VAT and personal income tax", and his evidence was "evasive and untruthful". And yet he won this part of the case. The issue before the court was whether the contract was with Mr Sheikh or MDB. Of the Dalys' side of the story "the lily was gilded", said the judge.
The idea that the builder was to be paid in cash had become translated into the notion that Mr Sheikh was the contractor instead of his limited company. But the simple truth was that MDB was in contract with the Dalys, and the fact that payment was in cash to Mr Sheikh was neither here nor there. It did not change the contracting party at all.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on email@example.com.