Potential heads of claim - Building Contract Claims - page 123

found ultimately to be valid, the contractor is bearing the financing charges,
while the money remains in the employer's pocket and, therefore, the
contractor is entitled to reimbursement. Another approach is to say that
the period commences when the architect has received all the information
he requires; before that the contractor is the author of his own misfortune.
On balance, it is thought that the latter is the better view and receives some
support from Rees & Kirby Ltd . In any particular case it will be a matter of
fact to be taken into account how much of the delay between making
application and providing full

information is the responsibility of the

contractor.
It appears that, if the principles enunciated in F. G. Minter Ltd v. Welsh
Health Technical Services Organisation and Rees & Kirby Ltd v. Swansea Corpor-
ation are to be followed, the resulting additional financing charges must be
considered to result directly from the delay and disruption concerned, and
consequently are recoverable. It should be said that this principle and,
indeed, the Minter decision itself, at first sight appears to conflict with a
decision of the House of Lords in a case known as The Edison 357 :

'the appellants' actual loss, in so far as it was due to their impecuniosity
arose from that impecuniosity as a separate and concurrent cause, extra-
neous to and distinct in character from the tort; the impecuniosity was
not traceable to the respondents' acts, and, in my opinion, was outside
the legal purview of the consequences of these acts'. 358

However, as Dr Parris has observed, 'this decision of the House of Lords has
in fact long been ignored by the courts, if it has ever indeed been
followed' 359 , and cites in support Dodd Properties (Kent) Ltd v. The City of
Canterbury 360 . It therefore appears that The Edison has no application to
the type of situation envisaged above 361 . It has recently been held that
interest is recoverable as damages since it was within the parties' contem-
plation at the time the contract was entered into that such charges might be
incurred 362 .
Rees & Kirby Ltd v. Swansea City Council has silenced the debate as to
whether financing charges are a proper head of claim under contracts in JCT
terms. The principles it establishes are applicable to other similarly worded
forms of contract. Indeed, in 1984 the Property Services Agency formally
accepted, in principle, that in appropriate circumstances financing charges
were recoverable under Edition 2 of GC/Works/1. The principle was re-
affirmed in the Scots Court of Session following legal argument which
essentially proceeded from first principles 363 .

357 (1933) AC 449.
358 (1933) AC 449 at 460 per Lord Wright.
359 John Parris, The Standard Form of Building Contract , 2nd edition 1985, Blackwell Science, section
10.05, Interest as 'direct loss and expense'.
360 (1979) 13 BLR 45.
361 (1979) 13 BLR 45 at 54 per Megaw LJ and at 61 per Donaldson LJ.
362 AMEC Process & Energy Ltd v. Stork Engineers & Contractors BV (2002) CILL 1883.
363 Ogilvie Builders Ltd v. The City of Glasgow District Council (1994) 68 BLR 122.