Channel Island Ferries Ltd v Cenargo Navigation Ltd (The Rozel): QBD 5 Apr 1994

Arbitrator to award all costs even if award much less than original claim.
Phillips J said: ‘It is always necessary to exercise the greatest care before applying the reasoning in one case to a different factual situation, and this is particularly true in the field of damages. The majority of the Court in Ruxley Electronics did not hold that a plaintiff can recover in damages the cost of remedial measures which are unreasonable. They held that, in the circumstances of that case it was not unreasonable for the plaintiff to spend the substantial sum necessary to have what he had contracted for. The test of what was reasonable had to have regard to his personal preference, as expressed in the depth of water that he had contractually required. This reasoning can be applied to a requirement which is incorporated in a contract as an end in itself, reflecting a personal preference of the contracting party. It does not apply where the contractual requirement is not an end in itself, but is inserted into a commercial contract because it has financial implications. If, in such a case, the contractual requirement is not met, the costs of remedial measures will not normally be recoverable as damages if they are disproportionate to the financial consequences of the breach. If that is the case it will not be reasonable to incur those costs. The damages recoverable will be those necessary to compensate for the financial consequences of the breach.’

Judges:

Phillips J

Citations:

Times 05-Apr-1994, [1994] 2 Lloyd’s Rep 161

Citing:

CitedRuxley Electronics and Construction Ltd v Forsyth CA 7-Jan-1994
In 1986, the defendant, wanted a swimming pool adjoining his house. He contracted with the plaintiffs. The contract price for the pool, with certain extras, was 17,797.40 pounds including VAT. The depth of the pool was to be 6 ft 6 in at the deep . .

Cited by:

CitedRuxley Electronics and Construction Ltd v Forsyth HL 29-Jun-1995
Damages on Construction not as Agreed
The appellant had contracted to build a swimming pool for the respondent, but, after agreeing to alter the specification to construct it to a certain depth, in fact built it to the original lesser depth, Damages had been awarded to the house owner . .
Lists of cited by and citing cases may be incomplete.

Arbitration, Damages, Construction

Updated: 19 May 2022; Ref: scu.78974