Earl's Terrace Properties Ltd v Nilsson Design Ltd

Earl's Terrace Properties Ltd v Nilsson Design Ltd

Holding costs are recoverable as damages if claimant proves funds were locked in the project due to delay caused by breach, and loss of use or opportunity is established. Loss incurred by a third party financier is recoverable if within scope of duty and contemplation of parties. Damages may be quantified by reasonable commercial interest if precise loss is not ascertainable. Credit for increased sale proceeds due to delay is not required unless gain is causally linked to breach; market fluctuations are generally too remote.

Parties
Claimant: Earl’s Terrace Properties Limited; Defendant/part 20 Claimant: Nilsson Design Limited; Part 20 Defendant: Charter Construction PLC
Jurisdiction
England and Wales
Judgment Date
20 February 2004
Procedural Posture
Civil / Preliminary Issues Trial
Outcome
Preliminary issues determined; holding costs recoverable in principle subject to proof; credit for increased sale proceeds not required unless causally linked to breach.
Legal Topics
Damages, Consequential Loss, Scope of Duty, Remoteness, Credit for Gains, Loss of Use, Interest as Damages
Construction Law Contract Law Professional Negligence Damages Consequential Loss Scope of Duty Remoteness Credit for Gains +2 more

Case Brief

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Parties

Earl’s Terrace Properties Limited

Claimant

Nilsson Design Limited

Defendant/part 20 Claimant

Charter Construction PLC

Part 20 Defendant

Procedural Posture

Civil / Preliminary Issues Trial

Legal Issues

  1. 1 Whether holding costs are recoverable as damages for breach of contract and negligence by an architect and contractor
  2. 2 Whether claimant must give credit for increased sale proceeds due to delay
  3. 3 Whether loss incurred by a third party financier is recoverable by the claimant

Ratio Decidendi

Holding costs are recoverable as damages if claimant proves funds were locked in the project due to delay caused by breach, and loss of use or opportunity is established. Loss incurred by a third party financier is recoverable if within scope of duty and contemplation of parties. Damages may be quantified by reasonable commercial interest if precise loss is not ascertainable. Credit for increased sale proceeds due to delay is not required unless gain is causally linked to breach; market fluctuations are generally too remote.

Court Disposition

Preliminary issues determined; holding costs recoverable in principle subject to proof; credit for increased sale proceeds not required unless causally linked to breach.

Orders

  • ETPL may claim holding costs as damages if proved at trial.
  • Loss incurred by Vastint may be recoverable by ETPL if within scope of duty.