East Ham Corporation v Bernard Sunley and Sons Ltd: HL 1965

In cases in which the plaintiff is seeking damages for the defective performance of a building contract, which is a contract for labour and materials, the normal measure of his damages is the cost of carrying out remedial work, or re-instatement. Reasonableness is a part of the primary assessment of damages as well as of mitigation of damage.
Lord Cohen said: ‘the learned editors of Hudson’s Building and Engineering Contracts, 8th ed. (1959) say at p.319 that there are in fact three possible bases of assessing damages, namely, (a) the cost of reinstatement; (b) the difference in cost to the builder of the actual work done and work specified; or (c) the diminution in value of the work due to the breach of contract. They go on: ‘There is no doubt that wherever it is reasonable for the employer to insist upon reinstatement the courts will treat the cost of reinstatement as the measure of damage.’ In the present case it could not be disputed that it was reasonable for the appellants to insist upon reinstatement and in these circumstances it necessarily follows that on the question of damage the trial judge arrived at the right conclusion.’
Lord Upjohn stated that in a case of defective building work reinstatement was the normal measure of damages.

Lord Upjohn, Lord Guest, Lord Cohen and Lord Pearson
[1966] 1 AC 406, [1965] 3 All ER 619
England and Wales
Cited by:
ConsideredRuxley 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 . .
CitedAlfred Mcalpine Construction Limited v Panatown Limited HL 17-Feb-2000
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
CitedDarlington Borough Council v Wiltshier Northern Ltd and Others CA 29-Jun-1994
The council owned land on which it wanted to build a recreational centre. Construction contracts were entered into not by the council but by a finance company, the building contractors being the respondents Wiltshier Northern Ltd. The finance . .
CitedPegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
CitedDarlington Borough Council v Wiltshier Northern Ltd CA 28-Jun-1994
The plaintiff council complained of the work done for it by the defendant builder.
Held: Steyn LJ said: ‘in the case of a building contract, the prima facie rule is cost of cure, i.e., the cost of remedying the defect: East Ham Corporation v. . .

Lists of cited by and citing cases may be incomplete.

Damages, Construction

Leading Case

Updated: 01 November 2021; Ref: scu.192627