Cases - AMEC Building Ltd v Cadmus Investment Company

Record details

Name

AMEC Building Ltd v Cadmus Investment Company

Date

(1996)

Citation

51 Con. LR 105

Keywords

Construction claims

Summary

In a contract between AMEC and Cadmus, certain fitting-out works were covered by provisional sums in the original contract sum. The architect instructed that the fitting-out work was to be omitted from AMEC's contract. Subsequently the work was let to another contractor. AMEC claimed loss of profit. It was argued on behalf of Cadmus that the contract entitled the architect to omit parts of the work covered by provisional sums, even if it is intended to give it to a third party. Cadmus also relied on alleged good reasons for its decision, although these reasons had been rejected as a matter of fact by the arbitrator.

On appeal from the arbitrator's award, the Court held that without a finding that the architect was entitled to withdraw the work for the reasons advanced by Cadmus, the only conclusion that the Court could come to was that the withdrawal of work had been arbitrary and, in those circumstances, was something for which AMEC was entitled to be compensated. By inference, this case suggests that if Cadmus had established valid reasons for the withdrawal of work, not withstanding the fact it was then given to a third party, AMEC's claim may have failed.