(Supreme Court of Victoria) The defendant applied to strike out substantial parts of a statement of claim on grounds including that the defendant faced allegations that by reason of breaches of contract the plaintiff had suffered loss of damage, particulars of which were given in a schedule A in which the loss and damage was calculated in terms of the difference between the tender estimate for the part in question and its actual cost. The defendant attacked the pleading on the grounds that such an allegation was embarrassing since it did not establish a causal link between the breach and the damage alleged.
Held: The court considered the treatment of global claims, that is claims where the claimant does not seek to attribute any specific loss to a specific breach of contract, but is content to allege a composite loss as a result of all the breaches alleged: ‘Where the loss is caused by a breach of contract, causation for the purposes of a claim for damages must be determined by the application of common sense to the logical principles of causation’ and ‘it is possible to say that a given loss was in law caused by a particular act or omission notwithstanding that other acts or omissions played a part in its occurrence. It is sufficient that the breach be a material cause… This last matter may be of particular importance in a case like the present where a number of potential causal factors may be present.’ The court noted that a global claim had been held to be permissible in the case where it was impracticable to disentangle that part of the loss which is attributable to each head of claim. The particular claim under consideration was a total cost claim: ‘The logic of such a claim is this: the contractor might reasonably have expected to perform the work for a particular sum, usually the contract price; the proprietor committed breaches of contract; the actual reasonable cost of the work was a sum greater than the expected cost.
The logical consequence implicit in this is that the proprietor’s breaches caused that extra cost or cost overrun. This implication is valid only so long as, and to the extent that, the three propositions are proved and a further unstated one is accepted: the proprietor’s breaches represent the only causally significant factor responsible for the difference between the expected cost and the actual cost. … The unstated assumption underlying the inference may be further analysed. What is involved here is two things: first, the breaches of contract caused some extra cost; secondly, the contractor’s cost overrun is this extra cost. … It is the second aspect of the unstated assumption … which is likely to cause the more obvious problem because it involves an allegation that the breaches of contract were the material cause of all of the contractor’s cost overrun. This involves an assertion that, given that the breaches of contract caused some extra cost, they must have caused the whole of the extra cost because no other relevant cause was responsible for any part of it.’
Judges:
Byrne J
Citations:
[1996] 82 BLR 83
Jurisdiction:
Australia
Cited by:
Cited – John Doyle Construction Limited v Laing Management (Scotland) Limited SCS 18-Apr-2002
The pursuer made a loss and expense claim in global form in a construction dispute. He was unable to prove that all of his losses stemmed from the default.
Held: A global claim requires proof that each and every element of the loss claimed . .
Lists of cited by and citing cases may be incomplete.
Construction
Updated: 16 May 2022; Ref: scu.182082