Cases - Ruxley Electronics v Forsyth
Record details
- Name
- Ruxley Electronics v Forsyth
- Date
- [1996]
- Citation
- AC 344, HL
- Legislation
- Keywords
- Construction - defects claims - commercial property - property management - dilapidations
- Summary
-
This House of Lords decision sets the principle that where the expenditure to rectify a defect is out of all proportion to the benefit to be obtained, the appropriate measure of damages is the diminution in value caused by the breach to the work, not the cost of reinstatement. This is so even if it would result in a nominal award.
In this case, the contractors agreed to build a swimming pool for the defendant to a depth of 7.5 ft. When completed, the pool was only 6-ft deep, although still safe for diving-the stated intention of the defendant.
The difference in depth did not reduce the value of the defendant's property. The estimated cost of rebuilding the pool to the specified depth was in the order of £21,000 and a significant sum was therefore withheld by the defendant from the claimants. The claimants claimed the outstanding balance.
On appeal, the House of Lords upheld the decision of the first instance judge giving judgment for the claimants and dismissing the defendant's counterclaim for breach of contract. The court awarded the defendant just £2,500 for loss of amenity. It was found that the cost of rebuilding the pool to the correct depth was out of all proportion to the benefit to be obtained.