Cases - Rees & Kirby v Swansea City Council

Record details

Name

Rees & Kirby v Swansea City Council

Date

[1986]; [1985]

Citation

30 BLR 1; CA 30 BLR 1

Keywords

Construction claim - loss and expense claim - damages - delay - attribution of delay - financing charges - head of loss - causation - independent event - recoverability

Summary

Delays of approximately one year were caused to the building of a housing estate in Swansea by the claimant contractors. Some of the delay at least was attributed towards the negotiation of an 'ex gratia' settlement in respect of the claimant's loss and expense claims and a proposal that the basis of the fixed-price contract be modified so as to accommodate fluctuations negotiations.

The Court of Appeal confirmed that finance charges were a recoverable head of loss, but where loss and expense is attributable delay caused by an independent (i.e. non-employer) event (such as the aforementioned negotiations), finance charges would not be recoverable for that period.

In this case, the following principles were confirmed:

• under a JCT 63 contract (with similar provisions to a JCT 98 and JCT 2005 contract) a very long delay in the contractor making written application does not preclude its entitlement to recover loss or expense;
• a contractor's entitlement to recover loss or expense continues after practical completion;
• loss or expense incurred by reason of an independent cause, such as financing costs incurred during a period of negotiations, is not recoverable under the terms of the contract;
• financing charges are recoverable as a head of loss or expense and can be calculated on a compound basis.

This case is thought to be authority for the proposition that if a contractor claims finance charges as part of his loss and expense claim, his application ought to state that he has suffered loss and expense as a result of being kept out of his money.