Potential heads of claim - Building Contract Claims - page 111

Indeed, the proposition that loss of profit-earning capacity must be
proved is supported by dicta in Peak Construction (Liverpool) Ltd v. McKinney
Foundations Ltd 327 , which is also helpful in giving some indication of the sort
of evidence needed to substantiate such a claim. In that case work was
suspended on a contract for some 58 weeks, and although the case arose
from a non-standard form of contract and involved some special facts, the
principles are of general application:

'The way in which the claim for loss of profit was dealt with below has
caused me some anxiety. The basis upon which the claim was put in the
pleadings was that for 58 weeks no work had been done on this site.
Accordingly, a large part of the plaintiffs' head office staff, and what was
described as their site organisation, was either idle or employed on non-
productive work during this period, and the plaintiffs accordingly
suffered considerable loss of gross profit . . . When the matter came before
the court below the matter was put rather differently. The case was put
on the basis that in the time during 1966 and 1967 when they were
engaged in completing the construction of the East Lancashire Road
project they were unable to take on any other work, which they would
have been free to do had the East Lancashire Road project been com-
pleted on time, and they lost the profit which they would have made on
this other work. When the case was argued in this court it seemed to me
that the plaintiffs were a little uncertain about which basis they were
opting for.
In the end however I think they came down in favour of the second
basis: that is, the one that was argued before the court below . . .
Possibly some evidence as to what the site organisation consisted of,
what part of the head office staff is being referred to and what they were
doing at the material times could be of help. Moreover, it is possible, I
suppose, that a judge might think it useful to have an analysis of the
yearly turnover from, say, 1962 right up to, say, 1969, so that if the case is
put before him on the basis that work was lost during 1966 and 1967 by
reason of the plaintiffs being engaged upon completing this block
and, therefore, not being free to take on any other work, he would be
helped in forming an assessment of any loss of profit sustained by the
plaintiffs.' 328

Later in the same case it was said:

'Under this head (i e. loss of profit) the plaintiffs were awarded the sum
of £11,619. The defendants submit that this sum should be wholly dis-
allowed, no loss of profit having been established. This outright denial is,
in my judgment, probably untenable, it being a seemingly inescapable
conclusion from such facts as are challenged that the plaintiffs suffered
some loss of profit. The sum awarded was arrived at on the basis of a
gross profit calculated at nine per cent of the main contract figure of

327

(1970) 1 BLR 114.

328

(1970) 1 BLR 114 at 122 per Salmon LJ.