Small building works on residential property — Contract to construct swimming pool not of specified depth — Defective construction not preventing diving or affecting value of property — Whether cost of rectifying defect recoverable — Judgment for plaintiff on claims for outstanding balance of contractual price — Counterclaim for breach of contract dismissed — Court of Appeal allowing appeal against that judgment — Defendant entitled to recover estimated costs of rectification — House of Lords allowing appeal — High Court judgment restored
The plaintiff was contracted to build a swimming pool and its enclosure for the defendant in his garden. The contract specified that the pool should have a diving area over 7ft 6ins (2.1m) deep. On completion the pool was suitable for diving, but the diving area was only 6ft (1.8m) deep. This did not have any adverse effect on the value of the property. The estimated cost of rebuilding the pool to the specified depth was £21,560. The plaintiff sued the defendant for the outstanding balance under the contract. The plaintiff admitted the breach of contract and the defendant counterclaimed for damages equivalent to the cost of replacing the pool with one of the required depth. The plaintiff obtained judgment for the outstanding balance of the contract price. However, except for awarding the defendant the sum of £2,500 for loss of amenity, the court dismissed his counterclaim for breach of contract.
The Court of Appeal (by a majority) allowed an appeal against that judgment. It held that the defendant’s loss as a result of breach of contract was the amount required to place him in the same position as he would have been if the contract had been performed. The plaintiff appealed.
Held The appeal was allowed.
1. Damages for breach of contract must reflect, as accurately as the circumstances allowed, the loss which the claimant sustained because he did not get what he bargained for. There was no question of punishing the contract breaker.
2. The trial judge found that it would be unreasonable to incur the cost of demolishing the existing pool and building a new deeper one. In so doing he implicitly recognised that the defendant’s loss did not extend to the cost of reinstatement. He was entirely justified in reaching that conclusion.
3. It was a common feature of small building works performed on residential property that the cost of the work was not fully reflected by an increase in the market value of the house and that comparatively minor deviations from specification or sound workmanship might have no direct financial effect at all.
4. The test of reasonableness played a central part in determining the basis of recovery and would be decisive in a case, such as the present, when the cost of reinstatement would be wholly disproportionate to the non-monetary loss suffered by the employer. But it would be equally unreasonable to deny all recovery of such a loss. The amount might be small and since it could not be quantified directly there might be room for difference of opinion, but judges were able to put figures to intangibles if fairness so demanded.
5. Once that was recognised the puzzling and paradoxical feature of this case, that it seemed to involve a contest of absurdities, fell away. There was no need to remedy the injustice of awarding too little, by unjustly awarding too much. The judgment of the trial judge acknowledged that the defendant had suffered a true loss and expressed it in terms of money. That judgment would be restored.
Bryan McGuire (instructed by Woolley Bevis & Diplock, of Brighton) appeared for the plaintiff; Isaac Jacob (instructed by Brook Martin & Co) appeared for the defendant.
