John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37

Gubbins engaged John Grimes to design a road and drainage scheme for a residential development and to obtain local authority approval. John Grimes failed to complete the design by the required date and Gubbins engaged another contractor to undertake the work. Approval for the design was finally obtained 15 months after the date by which it should have been obtained by John Grimes. John Grimes sued Gubbins for unpaid fees and Gubbins counterclaimed for damages for breach of contract, including damages representing the diminution in value of the development between the time which it would have been completed had John Grimes met the agreed timescale and the time it was actually completed. The judge at first instance allowed the counterclaim and John Grimes appealed.

The Court of Appeal dismissed the appeal. It considered that if a type of loss was, at the time of the contract, reasonably foreseeable by the defendant as not unlikely to result from his breach then that loss was not too remote and could in principle be recovered. The judge considered that, in this case, it was foreseeable that a delay by John Grimes, coupled with movements in the property market (which were themselves foreseeable) could result in Gubbins suffering loss. There was nothing else in the circumstances to indicate that the parties had contracted on the basis that John Grimes should not assume responsibility for such loss and therefore the usual rules of foreseeability and remoteness should apply.