PJ Spillings (Builders) Ltd v Bonus Flooring Ltd

Citation: EWHC 1516 (QB)

Nature of case:
PJ Spillings had engaged Bonus Flooring two lay two large concrete slabs, for which it was the former’s responsibility to provide the particular mix of concrete required. During the course of the work, it proved that the concrete mix was unsatisfactory. PJ Spillings terminated the contract, and Bonus Flooring brought a claim for wrongful termination, claiming costs and loss of profit. PJ Spillings counterclaimed for the cost of remedying the defective works. The trial judge upheld Bonus Flooring’s claim, calculating damages on the basis of cost incurred in reliance on completing the contract, but deducted the cost of remedying the defective works. PJ Spillings appealed that judgment, on the basis that the calculation of damages was incorrect, as Bonus Flooring would have incurred a loss if the contract had been completed.

Allowing the appeal, Forbes J held that the trial judge had made a clear finding of fact that the contract was a non-profit making one. In those circumstances, it was incorrect to use the reliance basis to calculate damages; the proper basis was the expectation basis, taking the contract price together with proper additional extras less the costs to be incurred by Bonus Flooring in completing the works after the date of the wrongful termination.

Link to Judgment

Counsel

William Webb KC