CA-2025-001477 - [2025] EWCA Civ 1360

Fecha: 29-Oct-2025

The Applicable Principles

The Applicable Principles

21.

As to the approach to be taken to applications of this sort, I consider that the judge’s summary at [7] and [10] is a useful distillation of the relevant authorities. Save for one point, I did not understand Mr Butler to disagree with the judge’s summary.

22.

The exception was the judge’s approach to defects in the pleading which might be capable of being cured by way of amendment. Mr Butler referred to Kim v Park [2011] EWHC 1781 (QB) where Tugendhat J said:

“40.
However, where the court holds that there is a defect in a pleading, it is normal for the court to refrain from striking out that pleading unless the court has given the party concerned an opportunity of putting right the defect, provided that there is reason to believe that he will be in a position to put the defect right. In para 19 of his Judgment the Master recorded that the Claimant had informed him that he already had witnesses. On 17 January 2011 the Claimant demonstrated that that was not wishful thinking, or a bluff, by submitting the statements that he did submit.”

23.

It was Mr Butler’s submission that, certainly in respect of certain heads of loss (identified below) the judge should have given the Wilsons another chance to get it right by way of amendment. The difficulty with that argument was that neither before the judge, nor before this court, were any proposed amendments actually provided. In a case of this sort, it is very difficult for the court to conclude (in Tugendhat J’s words) that ‘there is a reason to believe that the claimant would be in a position to put the defect right’ if there is no proposed amendment which seeks to do just that. In Kim v Park, the claimant had sought to remedy the relevant omission. That has not happened here. In my view, therefore, the judge’s approach was not wrong in principle.

24.

As to the potential difference between losses recoverable for breach of contract, and losses recoverable for breach of the DPA, it was not suggested on either side that the judge was wrong, to say that in the circumstances of this case there is unlikely to be any or any significant difference between the two. I note that neither Harrison and others v Shepherd Homes Ltd [2012] EWCA Civ 904, or Bayoumi v Protim Services Ltd (1996) 30 H.L.R. 785 (two of the very few appellate authorities concerned with the DPA) suggest otherwise. Moreover, at first instance in Harrison, Ramsey J expressly found that there was no distinction to be drawn: see [2011] EWHC 1811 (TCC) at [208]-[212].

25.

As to damages for defective work generally, I consider that the position is as follows:

(a)

Where there is defective or incomplete construction work, a claimant is entitled to claim the amount by which the work is worth less by reason of the defects: see Hoenig v Isaacs [1952] 2 All ER 176. That is a traditional diminution in value claim.

(b)

Over the last 60 years or so the courts have recognised that such diminution in value is usually best measured by reference to the reasonable cost of reinstatement works: see East Ham Borough Council v Bernard Sunley & Sons Ltd [1966] A.C. 406; Dodd Properties v Canterbury City Council [1980] 1 W.L.R. 433 at 456 and Darlington BC v Wiltshier Northern Ltd [1995] 1 WLR 68 at 79. But a traditional diminution in value claim may still be appropriate, such as where the building cannot be economically repaired (see Applegate v Moss [1971] 1 QB 406); or where any remedial works would be disproportionate (see Ruxley Electronics v Forsyth [1996] A.C. 344 HL, although on the facts of that case, there was no diminution in value either).

(c)

A claim for the reasonable cost of remedial work accrues whether or not the asset in question is subsequently sold or destroyed. In The London Corporation [1935] P 70, a steamship was damaged by the defendant’s vessel. The Court of Appeal upheld Bateson J’s conclusion that the diminution in value, represented by the cost of repairs, was recoverable by the claimant, despite the fact that the steamship was in fact sold to be broken up. In similar vein, a defendant cannot take advantage of the impecuniosity of owners who could not afford to carry out the remedial works and claim that they had suffered no loss: see Manchikalapati v Zurich Insurance PLC [2019] EWCA Civ 2163 at [83] – [89] and [96] – [111]. Both may be regarded as an “accidental circumstance which ought not to be taken into account in the way of diminution of damages”: see Greer LJ in The London Corporation at p.78.

(d)

In a case where it has been agreed that the original contractor can return to carry out the remedial works, the owners cannot claim the cost of those remedial works as damages: they will never incur the cost of such works, or a liability for those costs, so they cannot recover damages by reference to them.

(e)

But that does not mean that the owner will not suffer a residual diminution in value, even after the remedial works have been completed. It is common to find that, for example, flats in a block which has been the subject of extensive remedial work are worth less on the open market than flats in a block which has not been the subject of such work. This is commonly known as “blight”. Residual diminution in value is a proper head of loss in such circumstances: see Thomas v TA Phillips (Builders) Ltd (1985) 9 ConLR 72; George Fischer Holding Ltd v Multi Design Consultants Ltd (1994) 61 ConLR at [198]-[199]; and Strange and Others v Westbury Homes (Holdings) Ltd [2009] EWCA Civ 1247 at [12]-[18]. I note that Mr Sawtell’s framework at paragraph 25.2.1 of the RRRAPOC expressly includes this potential head of loss.

(f)

In addition, a claimant will normally be able to recover (subject to proof) loss of any rental income and any other special damages which are not too remote and which can be properly identified as flowing from the breaches. Special damages claims for loss of use of the property, based on the capital value of the property, have been unsuccessful: see Calabar Properties Ltd v Stitcher [1984] 1 W.L.R. 287 and Bella Casa Ltd v Vinestone [2005] EWHC 2807 (TCC). A claim for loss of use of money was successful in the particular circumstances in Earl Terrace Properties Ltd v Nilsson Design Ltd [2004] B.L.R. 273 at 290.