Ruxley Electronics and Construction Ltd v Forsyth
Cost of cure damages are not awarded where they would be out of all proportion to the benefit, but damages for loss of amenity may be.
Facts
Ruxley agreed to build a swimming pool in Mr Forsyth's garden for about £70,000. The contract specified that the pool would have a maximum depth of 7 feet 6 inches, because Mr Forsyth was a tall man and wanted to be able to dive safely. When the pool was built, its maximum depth was only 6 feet 9 inches, and the diving area was 6 feet. The pool was still perfectly safe for diving, and the shortfall did not reduce the value of the property. The only way to achieve the specified depth was to demolish the pool and build a new one, at a cost of about £21,560. Mr Forsyth claimed that sum.
Legal principle
The House of Lords held that Mr Forsyth could not recover the cost of rebuilding, because that would be wholly disproportionate to the benefit he would obtain. Where the cost of cure is out of all proportion to the benefit, it is not a reasonable measure of the loss, and the court found that Mr Forsyth did not intend to rebuild the pool. However, Mr Forsyth had not received what he contracted for, and the House upheld the trial judge's award of £2,500 for loss of amenity, recognising that the value of performance to the claimant may go beyond its market value. Lord Mustill described this as the consumer surplus.
Related cases on remedies
- Addis v Gramophone Co Ltd [1909] AC 488
- Anglia Television Ltd v Reed [1972] 1 QB 60
- Attorney General v Blake [2001] 1 AC 268
- British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673
- Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, [2016] AC 1172
- Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
- Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79
- Farley v Skinner [2001] UKHL 49, [2002] 2 AC 732
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