Alfred McAlpine Capital Projects Ltd v Tilebox Ltd

Alfred McAlpine Capital Projects Ltd v Tilebox Ltd

Clause 24.2 of the building contract is not a penalty clause. The stipulated sum of £45,000 per week is a reasonable pre-estimate of the losses foreseeable at the time of contracting, including diminution of the DCP, Tilebox's direct losses, and liability to Standard Life. The gap between the stipulated sum and the...

Source-derived case information.

Parties
Claimant: Alfred McAlpine Capital Projects Limited; Defendant: Tilebox Limited
Jurisdiction
England and Wales
Judgment Date
25 February 2005
Procedural Posture
Commercial Construction Dispute (liquidated Damages/penalty Clause) / Judgment After Trial
Outcome
Claim dismissed
Legal Topics
Liquidated Damages, Penalty Clauses, Building Contracts, Interpretation of Contractual Terms
Contract Law Construction Law Liquidated Damages Penalty Clauses Building Contracts Interpretation of Contractual Terms

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Parties

Alfred McAlpine Capital Projects Limited

Claimant

Tilebox Limited

Defendant

Procedural Posture

Commercial Construction Dispute (liquidated Damages/penalty Clause) / Judgment After Trial

Legal Issues

  1. 1 Does clause 6.8.2 of the DFA require Tilebox to secure completion by a specific date?
  2. 2 Does clause 6.8.1 of the DFA require Tilebox to secure completion by the date required under the building contract?
  3. 3 What losses flowing from delay were foreseeable on 27th April 2001?

Ratio Decidendi

Clause 24.2 of the building contract is not a penalty clause. The stipulated sum of £45,000 per week is a reasonable pre-estimate of the losses foreseeable at the time of contracting, including diminution of the DCP, Tilebox's direct losses, and liability to Standard Life. The gap between the stipulated sum and the likely losses is not wide enough to warrant striking down the clause as a penalty. The clause was freely negotiated between commercial parties of equal bargaining power and is enforceable.

Court Disposition

Claim dismissed

Orders

  • McAlpine's claim for a declaration that clause 24.2 is a penalty is dismissed.