Mul v Hutton Construction Ltd [2014] EWHC 1797 (TCC) (05 June 2014)

Mul v Hutton Construction Ltd [2014] EWHC 1797 (TCC) (05 June 2014)

An 'appropriate deduction' under Clause 2.30 of the JCT Intermediate Form of Contract (2005) means a deduction that is reasonable in all the circumstances and may be calculated by reference to contract rates, the cost to the contractor of remedying the defect, the reasonable cost to the employer of engaging another contractor, or other relevant factual circumstances. The clause does not exclude or limit the employer's right to damages for defects unless clear words are used.

Citation
[2014] EWHC 1797 (TCC)
Parties
Claimant: Oksana Mul; Defendant: Hutton Construction Limited
Jurisdiction
England and Wales
Judgment Date
05 June 2014
Procedural Posture
Preliminary Issues in Construction Contract Dispute / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of the Claimant.
Legal Topics
Interpretation of JCT Contract Terms, Defects Liability and Rectification Period, Appropriate Deduction Under Building Contract, Damages for Defective Works
Construction Law Contract Law Interpretation of JCT Contract Terms Defects Liability and Rectification Period Appropriate Deduction Under Building Contract Damages for Defective Works

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Parties

Oksana Mul

Claimant

Hutton Construction Limited

Defendant

Procedural Posture

Preliminary Issues in Construction Contract Dispute / Judgment on Preliminary Issues

Legal Issues

  1. 1 What is the correct basis for calculating an 'appropriate deduction' under Clause 2.30 of the JCT Intermediate Form of Contract (2005) when defects are not remedied by the contractor?
  2. 2 Does Clause 2.30 exclude or limit the employer's right to damages for defects?
  3. 3 Is the deduction limited to contract rates or can it be based on other measures such as cost to the employer or contractor?

Ratio Decidendi

An 'appropriate deduction' under Clause 2.30 of the JCT Intermediate Form of Contract (2005) means a deduction that is reasonable in all the circumstances and may be calculated by reference to contract rates, the cost to the contractor of remedying the defect, the reasonable cost to the employer of engaging another contractor, or other relevant factual circumstances. The clause does not exclude or limit the employer's right to damages for defects unless clear words are used.

Court Disposition

Preliminary issues determined in favour of the Claimant.

Orders

  • 'Appropriate deduction' under Clause 2.30 is to be assessed reasonably in all the circumstances, not limited to contract rates.
  • Costs of the preliminary issues hearing to be Claimant's costs in the case on a standard basis.