Civil Engineering Reference
In-Depth Information
disruption will be prolonged, the contractor must mitigate his loss by either
trying to use the plant elsewhere or terminating the plant hire contract and
returning the plant to its owner in accordance with the terms of the hire.
Questions often arise if the contractor is part of a group and one of the
companies in the group hires out plant and equipment to the others. Once it
is established that there is a claim in principle, the question to be answered
refers to the amount actually lost or expended by the contractor in hiring the
plant. Does the plant hire sister company hire out plant to the contractor at
the same rates as it would apply to other contractors? It is likely that there
would be a discount. It is for the contractor to prove that he actually has to
pay the hire charge. If the contractor is a separate limited company, in other
words a separate legal entity, whatever charge has been paid will be claim-
able unless there is some arrangement between the companies which allows
the contractor to recover the outlay in another way.
Sometimes a contractor will argue that he is entitled to claim hire charges
even though it is his own plant, because he operates a plant hire business,
hiring out spare plant to other contractors. In such circumstances, the
contractor would have to show that, if the particular plant was not being
used by the contractor, he would have hired it out. He must also show that
he had an opportunity to do so.
Contractor's own plant
Where the contractor is using his own plant, he is not entitled to claim any
notional hiring charge and arriving at the true cost of his plant standing idle
is more difficult. The case of
B. Sunley & Co Ltd
v.
Cunard White Star Ltd
340
is
illustrative of the principles involved. There, a machine had to be trans-
ported from Doncaster to Guernsey for use on a contract, but was delayed
by 1 week in its arrival. While delayed in Doncaster it worked for 1 day and
earned £16. The Court of Appeal held that in the absence of evidence as to
actual loss of profit, the measure of damage was depreciation in the value of
the machine during the period of delay, interest on the money invested in its
purchase, costs of maintenance, and some wages thrown away. Assump-
tions were made as to the values involved and in the absence of firm
evidence a figure of £30 was arrived at, less the £16, making a net award
of £14. It is notable that, in arriving at the figure for depreciation, the Court
of Appeal took into account that the machine would not depreciate as much
while standing idle as it would when working, but the court's apparently
harsh attitude on this point was possibly influenced by the fact that the
plaintiff's original claim had been for £577 on grounds which the court
considered wholly unsustainable, and by the plaintiff's inability to produce
any real evidence. A certain testiness is discernible in the judgment. The
ruling of the Court of Appeal is summarised in the head note:
340
[1940] 2 All ER 97. See also the Canadian case
Shore & Horwitz Construction Co Ltd
v.
Franki of
Canada Ltd
[1964] SCR 589 which followed the same principles.
