Co-Operative Group Ltd v Birse Developments Ltd & Ors

I will not reiterate the factual or procedural background which is more than adequately set out in the judgements of HHJ Judge Stephen Davies and in the Court Appeal dated 25 October 2012 and 1 May 2013 respectively. Following the appeal whereby in effect the Claimant was refused permission to amend by adding the complaints related to the "steel fibre content" claim, the Claimant seeks permission to amend by way of a new draft Re-Amended Particulars of Claim. A number of objections are made by the Defendant and third parties. Those objections, which I will address in this judgment, fall into three categories:

The Court of Appeal allowed the Defendant’s appeal against the decision of HHJ Judge Stephen Davies to grant permission to the Claimant to amend its case to add what it considered was a "new claim" which was the "steel fibre content" claim. Prior to this proposed amendment, the defective floor slab claim was predicated on the basis that the slabs needed repair.

Relevant parts of Paragraph 33A of the ultimately refused amendment were:

“In the course of works being carried out, and testing, in connection with the remedial work, the Claimant has discovered that the steel fibre content of the concrete used by the defendant for the construction of the internal slab warehouse floor is substantially less than the value that had previously been assumed. The consequence of this finding, which follows from testing, is that all of the internal slab is now under strength and liable to early failure if not replaced, particularly when this finding is considered together with the available evidence on inadequate thickness of the slab in many areas. The foregoing was a breach of clauses 2.1, 2.5.1.1, 2.5.1.1.2, 2.5.1.1.3, 2.5.1.2, 2.5.2 of the Building Contract and also a breach of the further obligations set out in paragraph 15 of this pleading above, together with a breach of clauses 4.1.1 4.1.2 and/or 4.1.3 of the Defendant’s Warranty. By way of further explanation of the technical evidence now available to the Claimant in relation to steel fibre content:

(i)

…[For the avoidance of doubt the Claimant’s case is that the original design was inadequate and that a 150 mm thick slab should have had at least 35 kg/m³ [of steel fibre]…No design assumptions or calculations have been provided…Nonetheless, the Claimant contends that once any reasonable assessment is made, including allowing for shrinkage stresses and edge conditions and cracking as recommended in the 3^rd edition of TR34, then 35 kg/m³ would be necessary for the prevailing load case].

[(ii)-(x) describe in effect how inadequate steel content was discovered as from early 2012 onwards]

[(xii) In light of the foregoing, testing of 43 core samples taken from across the warehouses shows the average fibre content was 26 kg/m³, with the range being 17 kg/m³ to 34.5 kg/m³…even taking the 26 kg/m³ average indicated by the testing done, this is significantly lower than the average of 35 kg/m³ that the Claimant contends ought to be seen and also the 30 kg/m³ that Stuarts appear to accept would be appropriate].

(xiii)

Fibre content and thickness are critical parameters in a SFRC floor. To meet design loads, the designer will select a concrete strength, floor thickness and fibre dosage that will produce the least cost design. In this case, the floor has hitherto been assumed to have 35 kg/m³ and 150 mm design and thickness…

(xiv)

Reduction in the thickness of the floor, or the fibre content (or both), due to poor workmanship and control on site, will significantly reduce the structural capacity of the floor.

(xv)

At the Property, and as part of the original design and/or construction, the Defendant, by its specialist flooring sub-contractor, has produced a floor that has a highly variable thickness, with some areas reduced to 70 mm as a result of deleterious materials left beneath the polythene separation membrane, and a failure to fix the polythene separation member, leading to rucking.

[(xvi) The slab fails structurally for a number of reasons. There has been widespread failure to achieve the minimum permissible thickness of 135 mm for the slab. This is the principal factor driving the need to replace the slab. The Claimant’s case is that the original design was inadequate and that a 150 mm thick slab should have had at least 35 kg/m³ [of steel fibre]. The slab has a variety of individual defects, caused by Birse’s failure either to level the sub-base properly or to provide a clean and flat sub-base (free from concrete droppings, rucked polythene, timber battens etc). In its as-built, post-shrinkage and cracked state, the slab could have been saved, had the Defendant at the least achieved the target of 150 mm average thickness (135 mm minimum), which it did not. The thickness has proven to be so variable and answer across its total area that is it is simply not possible economic to locate and replace all the affected areas. The only answer, given the final testing and the confirmation of the intended fibre content (of 30 kg/m³) is to replace the slab.]

(xvii)

Significantly, the floor has never seen, as far as the Claimant is aware, the intended racking leg load of 70 kN, which would require five levels of racking stacked with 1.4t "euro-pallets" either side of the central frame, back to back. This type of loading was never intended to be used by Woolworths, and the racking was only rated at 50 kN leg load. However, these loads could easily happen when a future defendant re-rates the racking at 70 kN and stores pallets of paint or other liquids, steel components, stone/cement, or paper ream. Loads from the wheels of heavy-duty high-reach fork-lift trucks would also be much more severe than has been the case previously.

(xviii)

There remains a high probability that the floor could fail in service due to undetected thin areas beneath or adjacent to racking legs, irrespective of the fibre content. However, the evidence now available that the fibre content is also low and below what would be needed in a design of compliant 150 mm thickness is also reason to condemn the floor".

I am assured by Counsel that, although a version of the amendment as set out above was in the bundle before the Court of Appeal, this version was produced following HHJ Davies judgment; therefore the above version "was not the focus of the Court of Appeal’s judgement in that it was HHJ Davies’ decision on the previous draft that was being appealed" (Suggested Amendments [by all parties to] Approved Judgment.

There is some confusion in the papers now before the Court as to precisely what was the version of the amendment was which (a) the Court of Appeal was considering and (b) HHJ Davies granted permission for. There are at least three different versions in the papers now before this Court. The TCC judge in Manchester gave permission to re-amend the Particulars of Claim substantially in the form before the Court on 5 September 2012 but subject to further drafting which was identified and raised in Paragraphs 37 and 67 of, and in the Annex to, his judgment. A version of the pleading which I was assured was before the Court of Appeal omits the second sentence set out above (which was specifically referred to in Lord Justice Tomlinson’s judgement). I will however assume that the Roman numeral sub-paragraphs set out above (originally numbered (a) and following) represented the final approved re-draft.

The damages claim was amended to claim the costs of total replacement of the floor slabs. Paragraphs 83F to H of the Schedule of Loss sought to plead:

“83F The works particularised above in respect of the Warehouse Floor works were commenced as planned pursuant to Contract Administrator Instruction…No. 3.19. This involved the limited replacement of slab following testing in accordance with the protocol agreed between the parties’ experts.

83G However, for the reasons set out in paragraph 33A…and in particular in light of the particular factors summarised in paragraphs 33A (xvi), (xvii) and (xviii), the Claimant has concluded, based upon independent engineering and valuation advice, together with the Claimant’s own commercial assessment of the options available to it, that all of the slab in both warehouses is at risk of failure and that the only reasonable engineering response is the replacement of the whole of the slab using the incumbent remedial works contractor. For the avoidance of doubt, as part of the process of deciding whether to repair or replace the slab, the Claimant and its experts have had available the Defendant’s proposal for the repair of the slab. The Defendant’s proposal has been rejected as inadequate on grounds which have been made known to the Defendant on an open basis. In all of the premises, the Claimant contends that the replacement of the slab is reasonably necessary and was, and remains a reasonable course of action for the Claimant to have taken.

83H Accordingly the scheme involving partial replacement and repair works was suspended and worked for the complete replacement of the warehouse slabs were instructed."

Other parts of the Re-Amended Particulars of Claim which are material are as follows:

“13.

Further the Employer's Requirements which formed part of the Building Contract contained the Specification for the sub-structure which provided inter alia as follows:

Lord Justice Tomlinson with whose judgement the other two judges agreed, having referred to and set out Paragraphs 13, 28, 33 and 36 of the pleading as set out above, materially said as follows:

“1.

This appeal raises the short question whether the Claimant/Respondent has in Paragraph 33A of its Re-Amended Particulars of Claim sought to add a new cause of action to those upon which it already relied in the proceedings…

14.

The cost of replacement of the floor slabs in both warehouses has in fact subsequently been quantified at approximately £2.5M, and substantial consequential losses are also asserted. The allegation that the warehouse floors require complete replacement on account of the insufficient steel fibre content, if successful, renders wholly academic the originally pleaded claim for the cost of replacement of specific sections, repair to individual cracks and replacement and repair of IDC joints…

17.

The gravamen of the allegation in this paragraph is that the floor has a fundamental design fault in that it is of insufficient strength to withstand a pallet racking leg load of 70KN. This is attributed principally to the shortfall in required steel fibre content, although also to the variable thickness of the concrete which is alleged to be in some places insufficient. What is said is that the floors have not yet been exposed to the maximum design pallet racking leg load of 70KN but were that to occur there would be a high probability that the floors would fail in service in consequence of which it is necessary that they be wholly replaced. Thus paragraph 33A is not concerned with the existing cracking in the floors or its cause. Paragraph 33A is concerned with cracking in the floors which might, indeed so it is said, would probably occur in the event that the floors are exposed to their full warranted design pallet racking leg load. Central to paragraph 33A is the hitherto unpleaded allegation that the steel fibre content of the concrete was less than contractually required.

23.

In my judgment it is very clear on which side of the line the present case falls. As Miss Fiona Sinclair for Birse succinctly submitted, the original allegation here was of a group of relatively disparate defects in the floors capable of disparate replacement and repair. There was no existing case of structural inadequacy of the entirety of the concrete floors in the two warehouses. What is now alleged is that the concrete of which the floors are constructed suffers from a systemic defect which must result in its entire condemnation and replacement because of its inability to withstand the design load to which it has never yet been subjected. The allegation by way of re-amendment is in my judgment an allegation of an entirely new and different cause of action. It relies upon a particular and specific facet of the contractual duty owed of which no breach was hitherto asserted, viz the design capability to withstand a pallet racking leg load of 70KN. The relevant specific duties of which breach had hitherto been alleged are the obligation to design to BS8110, to design and build in accordance with Concrete Society Technical Report TR 34 and to comply with that part of the Specification which requires sawn joints at not less than 9m spacing. There is no reference to any of these duties in paragraph 33A because they are irrelevant to the case being there advanced. The new allegation relies upon facts wholly different in kind from those hitherto relied upon, viz, the inadequate steel fibre content. Finally the consequences alleged are, again, wholly different in kind from those hitherto alleged, giving rise to the need to replace the entirety of the two floors and thereby rendering academic the question whether the contractors were, so far as concerns the concrete floors in the warehouses, in breach of duty in the manner hitherto alleged.

Essentially, what the Claimant now seeks to do in its further draft Re-Amended Particulars of Claim is to claim the costs and losses of and occasioned by total replacement of the slabs. Paragraph 41(i)(c) of the latest draft identifies the relevant loss and damage said to flow from the breaches of contract and duty as including:

“The remedial works to the slabs under Warehouses 1 and 2 reasonably required to address the breaches pleaded in paragraphs 33 and 36 above. Although the Claimant began with a scheme of repairs to the slabs, it is becoming increasingly clear that the scale and extent of the defects in the slabs could only be satisfactorily addressed, with proper assurance of satisfactory performance of the slabs in the future, by complete removal and replacement of the whole of the slabs. The Claimant’s decision to replace the slabs was a reasonable decision, based upon a proven approach to the desire to let the Property to a tenant whose exact operational requirements could not be known. Only replacement gave the Claimant the confidence that the terms of the Employer’s Requirements - including Clause 2.08 of the Specification - would be satisfied."

A somewhat more detailed explanation is given at Paragraphs 83F to I of the proposed amended Schedule of Loss:

“[83E was the same as Paragraph 83F of the earlier draft]

It is clear that the original and Amended Particulars of Claim (prior to the production of the Re-Amended Particulars of Claim considered by the Court of Appeal) did sufficiently plead a complaint about the lack of thickness in the slabs. Paragraph 28 specifically identifies as a defect in Warehouse 2 failure to achieve the specified thickness, true though it is that no such specific defect is spelt out in relation to Warehouse 1; however, Paragraph 28 is prefaced in describing the defects on there being failures of the slabs "inter-alia" as set out in the two following sub-sub-paragraphs relating to each Warehouse. It is plain from the remainder of the pleading however that the Claimant was obviously complaining that the slabs in both of the Warehouses had not been constructed to the required thickness. The most obvious place for this is in Paragraph 36 (iii) where it is explicitly spelt out. Paragraph 33(ii) also, probably due to its lack of punctuation, can also be considered to plead the lack of thickness in relation to both Warehouses ("The failure to construct to the design intent and in accordance with good practice, in particular the installation of locked IDC joints resulting in wide cracking and areas of the slab that are below the required thickness").

The Court of Appeal did not obviously or otherwise decide that the Claimant should in some way be precluded from pursuing its already pleaded complaints about the lack of thickness of the slabs. It is absolutely clear that the Court was aware of the complaints about lack of thickness because the relevant paragraphs of the pleading are (as above) set out verbatim in the judgement of Lord Justice Tomlinson. He quite rightly concluded that the Re-Amended Particulars of Claim which he was considering raised a "fundamental design fault” that the floor "is of insufficient strength to withstand a pallet racking leg load of 70KN” attributable "principally to the shortfall in required steel fibre content" (Paragraph 17); he did in that paragraph also refer to the fact that it was also attributable "to the variable thickness of the concrete which is alleged to be in some places insufficient". It is clear from Paragraphs 14 and 17 that he, rightly, interpreted the new pleading as relating, not to the existing cracking or its cause, but to future cracking if the floors were exposed to their “full warranted” design load; as he said, central to all those was the new steel fibre content allegation. Paragraph 23 of the judgment amplifies this more as saying that the new steel fibre allegation was "a systemic defect which must result in [the floors’] entire condemnation and replacement because of its inability to withstand the design load to which it has never yet been subjected". Lord Justice Tomlinson in this latter paragraph identifies this as a new cause of action because it "relies upon facts wholly different in kind from those hitherto relied upon, viz, the inadequate steel fibre content".

What in essence the Claimant wishes to do now is to plead that the costs of and occasioned by the total replacement of the slabs was caused by the other already pleaded defects (albeit principally the thickness issues) even though another cause or another reason was the discovery of the (alleged) steel fibre content problems. It seeks also to argue that it was reasonable to embark on the total replacement by reason of the already pleaded defects. In simple causation terms, it is at least reasonably arguable that, where loss, damage or injury is caused by two or more factors only one of which gives rise to a cause of action against a particular defendant and the others do not, the requisite damages can still be recovered. Thus, an innocent pedestrian on a pedestrian crossing who is hit simultaneously by two cars negligently driven can sue either or both drivers; it would not be a defence for the one driver to say that the claimant would have been injured just as badly anyway by the other driver. In construction cases, there has been endless academic and some judicial discussion about concurrent and co-effective causes of delay which may be germane at least in principle. Furthermore, because usually damages claimed must be in broad terms reasonable, it is reasonably arguable that a claimant can seek to justify as reasonable a course of action which has arisen as a result of more than one cause.

All Counsel accept that, if in principle the Claimant is permitted to argue this new approach, it should be required to spell out in pleading form (supported by the key contemporaneous documents) how, why, when, in what terms, on what basis and by whom the decision was taken to replace the floor slabs.

There has been no argument equivalent to that in the Court of Appeal that a replacement cost damages claim is a "new claim" for the purposes of the Limitation Acts and CPR Part 17.4(2) or that it does not arise out of the same or substantially the same facts of the matters already in issue.

I do not consider that in principle this new claim for replacement costs attributable to the existing complaints about thickness, the absence of sawn joints or the lack of non-armoured joints in the slab in some way runs foul of the Court of Appeal judgment. That was based on the allegation that the shortage of steel fibre content would lead in the future to cracking when occupiers of the warehouses applied the load which the slabs were designed to accommodate. It may well be the case that the Claimant has an evidential mountain, hill or hillock to climb in order to show that the steel fibre content was not the “sine qua non” of the decision in 2012 to replace rather than continuing the much cheaper repair option; the defending parties can point to the versions of the Re-Amended Particulars of Claim with which the Court of Appeal was concerned to seek to demonstrate that the steel fibre content was or may have been professed to be the dominant cause or reason for the change of plan. One has to bear in mind that the Court of Appeal was concerned with a pleading which on its face was interpreted as calling for replacement of the slabs by reason of the steel fibre content complaint as opposed to the previous partial repair and replacement of individual segments and repairing cracks and joints. That is why Lord Justice Tomlinson said in Paragraph 14 of the judgement what he did. Although Paragraph 33A talks in sub-paragraphs (xvi) and (xviii) about the impact of the variable thickness, it is clear that it was pleaded or at least understood that it was the fibre content problem which led to the replacement:

“(xvi)

The only answer, given the final testing and the confirmation of the intended fibre content (of 30 kg/m³) is to replace the slab”.

It may be difficult to double-guess what a distinguished member of the Court of Appeal would have held if the current proposed pleading had been in front of the Court. I am however as sure as I can be that he was only addressing the version of the pleading which was before the Court and that his judgment is clear that he was addressing a "new claim" which was based on the complaint about inadequate steel fibre content leading to the need to replace the whole of the slabs.

Therefore in principle I would allow the amendments to plead that already pleaded defects (such as thickness, joints and the like) led causatively (at least sufficiently arguably) to the decision or need to replace the slabs. Permission to amend is therefore granted subject to the provision of adequate particulars of how, why, when, in what terms, on what basis and by whom the decision was taken to replace the floor slabs. I have made it clear that that exercise should be concluded and served in draft within 21 days of last Friday. I am also concerned with the content of Paragraph 83G of the draft Amended Schedule of Loss which speaks in somewhat general terms about "further cracking evidence to the slabs" without saying what caused it, and about "the generally very poor standard of construction [and] the full extent of the deficiencies" without identifying what they are (for instance whether they raised other as yet unpleaded complaints). The Claimant should produce a re-draft of Paragraph 83G which clarifies the basis of the decision. The Court will need to see that draft before finally deciding on the form of the pleading which can be allowed.

As is the usual practice, a draft of this judgment was circulated to Counsel for correction purposes. However, and unfortunately, it has generated an exchange or further submissions late yesterday and early today. The defending parties are concerned to emphasise that the Claimant should not be entitled to plead that the Defendant was in breach of contract because the floor slabs are "of insufficient strength to withstand a pallet racking leg load of 70 KN” by reason of any of the existing remaining breaches unaffected by the Court of Appeal judgment. They point to Paragraphs 17 and 23 of Lord Justice Tomlinson’s judgment emphasising his references to there being no breach alleged “hitherto” (at the stage of the appeal) in relation to breach of the specification requirement that there be an ability to accommodate the 70KN loading. They argue that, if the amendments being allowed are taken to mean that the Claimant can pursue a claim that the remaining breaches involve a failure to achieve this loading, it is seeking to go behind Lord Justice Tomlinson’s judgement and gives rise to a new claim because it involves a breach of a duty not previously pleaded and it involves different and much greater loss and damage. The proposed amendments, if construed as involving a breach of the 70KN requirement, are, it is argued, that for objectionable.

Against that Mr Hughes QC for the Claimant in his written note received by the Court this morning argues that the defending parties seek to create a false dichotomy and, in doing so, are in effect seeking to shut out the Claimant from ever placing reliance at trial upon Clause 2.08 of the Specification and the 70KN requirement. He explains that the case which the Claimant wishes to pursue at trial is that (together with other pleaded complaints) the thicknessof the slab was insufficient to a very large physical extent. However he points out that the ‘thickness’ of the slabs was not specified, this being a Design and Build project and there being a ‘performance specification’ in place. It was for the Defendant to offer a slab which complied with performance requirements. He says that the trial judge in considering what is sufficient or insufficient thickness will have to have regard to what thickness was required to achieve the requirements in Clause 2.08 of the Specification such that the slabs were to be:

“…designed in accordance with the BCA Interim Technical Note II, Loading Category 3, Classification “Heavy” and will accommodate a uniformly distributed superimposed loading on 50.00 KN/m2 (1000 lbs/ft2) and pallet racking of 70 KN/leg (racking leg loading based on leg centres of 2.70m along length, 0.09m centres across width and 0.20m centres for back legs where positioned back to back)…”

He goes on to say that the 70 KN/leg loading being part of the Specification and of the contractual information will be essential in determining questions of what the thickness needed to be in normative terms, so that Court can then compare that with the thickness which was delivered in factual terms.

I prefer the arguments of Mr Hughes QC in this case for the reasons which he has put forward in his Note but also for the following reasons:

The only caveat that I would put on this is that, before permission to amend is granted, the Claimant must spell out in draft pleading form the relevance both to the description of the pleaded defects and to the breach pleading of the 70KN (or indeed other Clause 2.08 requirements). I am very anxious to ensure that there is no doubt or lack of clarity as to what is being pleaded. For instance, Mr Hughes’ Note has at least to a significant extent clarified why the 70KN requirement may be relevant to the existing thickness complaint.

Paragraph 33 is headed "Failure of the Slab in Warehouses 1 and 2” and is prefaced as follows;

“The failure of the slab in Warehouses 1 and 2, described in paragraph 28(iii) above, has resulted from poor and/or inadequate workmanship and/or design in respect of the slab and/or in respect of the preparation and/or improvement of the ground underneath the slab and/or a failure to adhere to the Employer’s Requirements contained in the Main Contract."

Paragraph 28(iii) refers to cracking in the slabs, "IDC joints" not opening and closing properly, the slab being below the design thickness, deterioration of construction joints and displacement.

The proposed amendments were in a less particularised form floated in the Claimant’s Reply. It being suggested that some of these matters should be pleaded in the Particulars of Claim, the amendments found themselves initially at Paragraph 40A (first draft before HHJ Davies) and later in Paragraph 33(v) but, I understand, the learned judge was left with insufficient time to deal with these matters other than to indicate that some greater particularisation was required. Some particularisation has now been provided and the Claimant seeks permission to amend. I will deal with each in turn:

This comes in the Revised Draft Amended Schedule of Loss after the new plea for the total slab replacement costs and losses and is in the following form:

“If, contrary to the case set out above, the Claimant is not entitled to recover the cost of complete replacement, the Claimant will claim the costs that would have been incurred to partially replace the floor slabs in the areas affected by the defects pleaded. The Claimant’s best estimate of that cost at present is the estimated cost of partial replacement projected in Cost Report number 8 in the sum of £822,899.07.”

There is a claim in any event for the sum of £370,304.58 for the repair costs to date, the repair having been more recently abandoned for the total replacement solution. This is subsumed within the larger figure, I understand.

In essence, the objection to this amendment is that it involves a plea which can not succeed in fact or in law. The argument is that (save for the £370,000 worth of repair costs already incurred, which can be claimed for) the balance will simply never be expended and has been rendered wholly unnecessary by the total replacement works which are essentially being done for other reasons (primarily the alleged steel fibre content problems) upon which the Claimant can not succeed. Mr Cannon QC for the Third Party led the argument on this and referred to a number of authorities such as Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344 and in particular the following dicta:

“…damages for breach of contract must reflect, as accurately as the circumstances allow, the loss which the claimant has sustained because he did not get what he bargained for. There is no question of punishing the contract-breaker. Given this basic principle, the court, in assessing the measure of the claimant's loss, has ultimately to determine a question of fact, although the law has of course developed detailed criteria which are to be applied in ascertaining the appropriate measure of loss in a wide variety of commonly occurring situations. Since the law relating to damages for breach of contract has developed almost exclusively in a commercial context, these criteria normally proceed on the assumption that each contracting party's interest in the bargain was purely commercial and that the loss resulting from a breach of contract is measurable in purely economic terms. But this assumption may not always be appropriate. [per Lord Bridge at 353 B-C]

“Damages are designed to compensate for an established loss and not to provide a gratuitous benefit to the aggrieved party, from which it follows that the reasonableness of an award of damages is to be linked directly to the loss sustained. If it is unreasonable in a particular case to award the cost of reinstatement it must be because the loss sustained does not extend to the need to reinstate. A failure to achieve the precise contractual objective does not necessarily result in the loss which is occasioned by a total failure. This was recognised by the High Court of Australia in the passage in Bellgrove v Eldridge cited above where it was stated that the cost of reinstatement work subject to the qualification of reasonableness was the extent of the loss, thereby treating reasonableness as a factor to be considered in determining what was that loss rather than, as the respondents argued, merely a factor in determining which of two alternative remedies were appropriate for a loss once established. Further support for this view is to be found in the following passage in the judgment of Megarry V-C in Tito v Waddell (No 2) [1977] 3 All ER 129 at 316, [1977] Ch 106 at 332:

'Per contra, if the plaintiff has suffered little or no monetary loss in the reduction of value of his land, and he has no intention of applying any damages towards carrying out the work contracted for, or its equivalent, I cannot see why he should recover the cost of doing work which will never be done. It would be a mere pretence to say that this cost was a loss and so should be recoverable as damages.'

Megarry V-C was, as I understand it, there saying that it would be unreasonable to treat as a loss the cost of carrying out work which would never in fact be done.[per Lord Jauncey pages 357E- 358]

“The starting point is Robinson v Harman (1848) 1 Exch 850 at 855 at 855, [1843-60] All ER Rep 383 at 385, where Parke B said:

'The rule of the common law is that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.'

This does not mean that in every case of breach of contract the plaintiff can obtain the monetary equivalent of specific performance. It is first necessary to ascertain the loss the plaintiff has in fact suffered by reason of the breach. If he has suffered no loss, as sometimes happens, he can recover no more than nominal damages. For the object of damages is always to compensate the plaintiff, not to punish the defendant. This was never more clearly stated than by Viscount Haldane LC in the first of the two broad principles which he formulated in British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 689, [1911-13] All ER Rep 63 at 69:

'The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach ...'

Note that Lord Haldane does not say that the plaintiff is always to be placed in the same situation physically as if the contract had been performed, but in as good a situation financially, so far as money can do it. This necessarily involves measuring the pecuniary loss which the plaintiff has in fact sustained.” [Per Lord Lloyd pages 365F-366B]

Reference was also made to the decision of HHJ Stabb QC in Hole & Son (Sayers Common) Ltd v Harrisons of Thurnscoe Ltd [1973] I LL Rep 345 which involved a negligently driven lorry driven into some cottages owned by the plaintiff who had always intended to demolish the cottages in any event. It was held that the alleged loss could not properly be measured by the cost of repair as the plaintiff never intended to repair. There was also reliance upon the Court of Appeal decision in The Maersk Colombo [2001] 2 LL Rep 275, albeit a tort case, which addressed the lack of intention to carry out the remedial measure costed as part of the damages claim with Lord Justice Clarke (as he then was) saying at Paragraph 23:

“The cost of reinstatement by reference to transportation and modification costs that have not been and will never be incurred, and which it would be unreasonable to incur, cannot fairly be regarded as caused by the defendants’ tort.”

This is broadly challenged by Mr Hughes QC for the Claimant who argues that there are some distinctions between these cases which mostly demonstrate a lack of intention to do the or any remedial works or reinstatement which forms the basis of the damages claimed. He argues that here, although the Claimant is replacing the slabs in their entirety, this has the effect of repairing or putting right the thickness and the joint problems which are pleaded. If for any reason the Claimant, he argues, fails to recover the cost of replacement because, say for instance, the trial judge finds that the primary, only or dominant reason for replacement was to put right defects (such as the steel fibre content problems) which can not be considered to be the responsibility of the Defendant or third parties but if he also finds that breaches are established in relation to the other and pleaded defects, the reality is that the replacement of the slabs will have resolved those other defects; it would then be reasonable, he says, and appropriate that the defending parties are liable for the costs of remedial work albeit limited to what it would have cost to repair simply the established defects.

I have formed the view that the Claimant’s position on this is reasonably arguable and may well be fact dependent, particularly in the light of possible permutations of fact which may be found. I do not see the general statements of principle, particularly in the Ruxley decision, as necessarily cutting out the claimant in this Claimant’s position from compensation. One can take perhaps comparable examples of a claimant driver whose car has been negligently and seriously damaged by a defendant who makes an honest but misguided decision after the accident to replace the damaged car for £15,000 rather than repair it when a proper repair would only have cost £10,000; it might be a matter of real doubt as to whether the misguided decision will mean that the Claimant can recover nothing in respect of the damage to his or her car or that his or her damages will be limited to the reasonable cost of repair.

I would therefore be prepared to allow the amendment in this context.

For the reasons given above and, subject as mentioned above to the various caveats and to requirements for further explanations or particularisation, permission to amend it is to be granted. I will not bar the Claimant from producing any further and final draft which addresses the concerns expressed above. Given that a trial date has not yet been fixed in the TCC in London because the parties collectively wished to know what was to happen to the re-amendment application, I do not see, and it has not been suggested, that any particular "prejudice” will be suffered by the defending parties if and to the extent that permission to amend is granted.