Property & Land Contractors Ltd v Alfred McAlpine Homes (North) Ltd
Citation: 76 B.L.R. 59; 47 Con. L.R. 74
Nature of case:
Alfred McAlpine engaged Property & Land Contractors to build houses under the JCT 1980 standard form of contract. P&L submitted a claim for loss and expense arising out of an instruction to postpone the works, which was referred to an arbitrator. The arbitrator’s second interim award provided for sums related to P&L’s plant and overheads; the plant was valued at the rate of a reasonable hire charge, and the overheads included head office running costs, as P&L’s practice was to rely on one contract at a time. Alfred McAlpine appealed against both aspects of the award.
The Court allowed the appeal, and held that the sums related to P&L’s plant had to reflect actual losses, not notional losses. Further, while the single-contract nature of P&L’s work justified the inclusion of an award for some fixed overheads as supervisory costs, this did not include the head office costs.
