Cases - Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd

Record details

Name
Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd
Date
[2006]
Citation
107 Con LR 1
Keywords
Abatement - payment - dispute as to sums due under subcontract
Summary

The parties were in dispute as to the sums due under a subcontract for the design, fabrication, delivery and erection of the structural steelwork for the new Wembley Stadium. In determining the amounts properly due, the contractor claimed an abatement for defective work including both defective design work and defective fabrication and erection of the steelwork. The abatement claimed included the costs of employing a third party to identify defects in the steelwork.

The court held that the contractor was entitled to claim an abatement for defective fabrication and erection work but not for defective design work. On the facts, the amount of the abatement would be assessed by reference to the cost of remedial works. The contractor could not recover the costs of employing a third party to identify the defects as part of the abatement.

In determining the dispute Jackson J. summarised the law on abatement as follows:

  1. In a contract for the provision of labour and materials, where performance has been defective, the employer is entitled at common law to maintain a defence of abatement.
  2. The measure of the abatement is the amount by which the product of the contractor's endeavours has been diminished in value as a result of that defective performance.
  3. The method of assessing diminution in value will depend upon the facts and circumstances of each case.
  4. In some cases, diminution in value may be determined by comparing the current market value of that which has been constructed with the market value which it ought to have had. In other cases, diminution in value may be determined by reference to the cost of remedial works. In the latter situation, however, the cost of remedial works does not become the measure of abatement. It is merely a factor which may be used either in isolation or in conjunction with other factors for determining diminution in value.
  5. The measure of abatement can never exceed the sum which would otherwise be due to the contractor as payment.
  6. Abatement is not available as a defence to a claim for payment in respect of professional services.
  7. Claims for delay, disruption or damage to anything other than that which the contractor has constructed cannot feature in a defence of abatement.