Barry McKay v Renlon Ltd (2008)

Breach of contract : Causation : Dampness : Interpretation : Loss :
Mitigation : Rent : Damp-proofing not according to contract : Cause of water penetration to party wall : Damp-proofing : Sika coating : Render : Water penetration : Party walls

The defendant damp-proofing contractor was in breach of contract by not carrying out work in accordance with the requirements of the contract and by failing to apply a damp-proof coating to a party wall properly.

The claimant lessor (C) claimed damages for breach of contract against the defendant damp-proofing company (D). C carried on business as a lessor of residential accommodation and had engaged D to damp-proof a property. After the works had been carried out, C discovered that water had penetrated the property and had affected a section of a party wall. After D undertook remedial works there was no further water penetration. C claimed damages for breach of contract. It was common ground that D had recommended the application of a Sika coating in place of its original recommendation, but had actually applied render. C alleged that he had sustained loss as D had left a gap in the render above the floor slab, and that D's failure to lap the coating to the floor slab amounted to a breach of contract. D maintained that a screed had been laid down before the damp-proofing had been applied and that by virtue of clause 25 of the agreement there was no breach of contract. Clause 25 provided that D could reserve the right to alter specifications in the interests of progress and efficiency without prior notice. D contended that (1) it was not in breach of contract because clause 25 gave D an unfettered licence to substitute for a contractual damp-proof treatment a different damp-proof treatment, that the coating applied was as effective as a Sika coating, and that a screed was already in place at the time of the application of the render; (2) it had not been proved that it was the ingress of water because of the admitted deficiencies in D's work, as opposed to the ingress of water from some other source, which had caused the damage; (3) C had failed to mitigate its loss by failing to obtain a new tenant for the flat after the remedial works had been carried out and that the period for which the flat remained unoccupied remained excessive.

HELD: (1) On a proper interpretation of clause 25, D did not have an unlimited ability to change from a contractual damp-proof treatment to a different one. It could only make a change without notice and without the consent of the customer in the interests of progress and efficiency. Moreover, any changed treatment had to be as effective as the contractual treatment. On the evidence, it seemed that the application to the party wall of the render, which was part of the originally proposed specification, along with a chemical damp-proof course, was not consciously decided upon by D. It seemed likely that the plasterer instructed to apply a render or coating to the party wall was given the original version of the plan provided by D. The fact that the render was as effective as a Sika coating was not the point. The point was that the render was not taken down and lapped to the floor slab. It was also clear from the evidence that the screed was not laid before the render was applied. The work of application of the render to the party wall was not carried out in accordance with the requirements of the contract between the parties, not only because the Sika coating was not applied, but also because the work was not done properly by having the render lapped onto the floor slab. D's failure to lap it thus amounted to breach of contract. (2) The cause of the dampness was penetration through the unprotected part of the section, particularly at low level where render had not been applied. There was no positive evidence to suggest that the water came from anywhere else. (3) There was no substance in the argument that C failed to mitigate his loss by not obtaining a tenant for the flat after repair any earlier than he did. C could also not be criticised for trying to maintain the flat in a condition for immediate offering to prospective tenants until such time as it became clear that substantial works to the flat were necessary. (4) All items claimed as losses were caused by D's breach of contract in not applying a damp-proof coating to the party wall properly, especially by not lapping the coating to the floor slab.

Judgment for claimant.

Counsel:
For the claimant: Katharine Holland
For the defendant: Adrian Carr

Solicitors:
For the claimant: Pinsent Masons
For the defendant: Jacobs Allen Hammond