Breach of Contract in Construction

The Bellgrove v Eldridge case was bought before the High Court in 1954 in relation of a breach in contract. My understanding of this case is that plaintiff (Bellgrove) had entered into a building contract with defendant (Eldridge) and agreed to build a two storey brick house in accordance with the defendant’s plans and specification for an amount of £3500. The defendant had made a progress payment of £3100 during the construction and refused to pay the remaining £400 due to defective work done by the plaintiff.

The plaintiff sued to recover £400, but in reverse the defendant brought a cross action for damages due to the defective work on the concrete foundation and the mortars used to cement the walls causing the building to be unstable. The judge was satisfied by the evidence given by the defendant and dismissed the plaintiff’s case and in reverse awarded the defendant a sum of £4950 for cost on demolition and reconstruction. The plaintiff appealed to the high court justifying the judge’s assessments on the damages that was awarded to the defendant in the cross actions; however the appeal was dismissed by the judge.

In Analysing the Bellgrove v Eldridge case, there are a few principles discussed by the judge in court determining the damages. The fact was Bellgrove had breached his duty and owes a duty of care to Eldridge for the defective work and he has to compensate her. The court had commented the damages in regards to what the measurements of the awards should be for the breach, the cost of reinstatement or rather than an amount for compensating the difference in value. In this case the judge had awarded Eldridge the cost of reinstatement due to the significance of the defective work resulted in grave stability. Although Bellgrove suggested in removing the foundations and replaced by sections, but the judge was not satisfied that this could be done successfully and afraid that the building might collapse.

In terms of value, the defective work had affected the value of the building. Judge explained that the other measures of the damages would be the existing values of the house prior the construction and the value if it had been done appropriately in accordance with the plans and specification. Also in measuring the awarding the damages for Eldridge should be assessed with an amount as to the same position as she would be before sustaining any injuries comparing to the construction if it was done according to the plans and specifications. The judge was certain that the building was worth some sort of value and that are beyond the cost of the demolition value at time the breach, however he also suggested if the building was built in accordance to the plans and specification then the value would be a difference.

Bellgrove had argued in regards to the rectification of the damage are both necessary and reasonable and the judge had determined it was reasonable and necessary for the work to be rectified due to the gravity of the defect, also opinions by expert suggested that the only way was to demolish the building and rebuild another one. The judge reached the final decision and stated that Eldridge entitles to the compensation and commented for those who breaches in contracts should be assessed in accordance with this principle of “necessary and reasonable” depending on the circumstance of the defect.

In present days, a lot of questions had been discussed into what are the principles of measuring in damages. According to Halsbury Law of Australia, it stated “The basic purpose of an award of damages is to restore the aggrieved party to the position which would have been obtained had the wrongful act not occurred” it also stated “In the case of incomplete and defective building work the usual remedy will be the cost of completing the building works in accordance with the building contract” These two principles had clearly applied into the Bellgrove v Eldridge case where the judge had awarded Eldridge £4950 in the cross action in terms of restoring her into the position which she should have been.

In conclusion of our group’s understanding in the Bellgrove v Eldridge case, the history of the law in assessing damages in relations for breaches of contracts are remained unchanged in relations to the principles that was applied in the case of Bellgrove v Eldridge. Also according to our group’s understanding in looking at Halsbury Law of Australia, the Bellgrove v Eldridge case are assessed in these areas. They are the cost of rectification and diminution in value, which were relied upon in measuring in terms of compensation for Bellgrove v Eldridge- BC5400380 (1954). Finally in terms of building contracts there are a several legislations put in place that are used in the construction industry. They are The Home Building Act 1989 and sometimes the Trade Practices Act 1974 is used in conjunction depending on circumstances, but the main aim is to protect consumers ensuring fairness in between companies and consumers.

Here are lists of Cited Cases that principles were applied from the Bellgrove v Eldridge case:

Radford v De Froberville (1977) – (Breached of contract due to failing to build a wall between the plaintiff’s and the defendant’s properties causing diminution of value).

Ruxley Electronics and Construction Ltd v Forsyth (1996) – (Breached of contract in the construction of a swimming pool not in accordance to the specification resulting loss in pleasure and admenity).

D Galambos & Son Pty Ltd v McIntyre (1974) – (Breached of contract based on the construction of a garage that is not in accordance with the specification).

Lyons v Jandon Constructions (1998) – (Awarding damages based on the extent of the defect).

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) – (Breach of contract by alternation of premises without permission).

Willshee v Westcourt Ltd (2009) – (Breach of contract by using inferior limestone cladding which had considered be seconds).