14th March 2013

Mueller Europe Ltd v Central Roofing (South Wales) Ltd

This case was recently heard in the High Court and judgement was handed down on 22nd February 2013.

The claimant, Mueller Europe Limited suffered catastrophic damage to its factory where it manufactured copper piping as a result of a fire caused whilst roof repairs were being carried out.

A birdcage scaffold had been suspended in the roof space above the production line in order to allow production to continue while the roof repairs were being undertaken. Gas heaters that were located under the roof but above the birdcage scaffold were not turned off and caused the fire by igniting the scaffold.

It was found that the roofing contractors were at fault rather than Mueller Europe with regard to the cause of the fire and responsibility for the consequences of the fire.

Key point

Of particular interest was a separate dispute over Mueller’s entitlement to damages for machinery and equipment that they had not yet replaced.

Until all of the damaged machinery and equipment had been replaced Mueller could not meet its pre-fire production capacity and capability.

The Defendants, Central Roofing (South Wales) Limited, argued that Mueller was only entitled to the machinery reinstatement costs which restored Mueller’s capacity to achieve its pre-fire levels of profit.

Outcome

The Honourable Mr Justice Stuart-Smith ruled that the cost of reinstatement and repair was the appropriate measure of loss. Mueller could use the damages in this regard in any way it saw fit and the fact that some of the equipment had been reinstated in the United States by the parent company was immaterial.

The Court reiterated the general principle that the cost of repairing or replacing equipment is the prima facie measure of recoverable damages. The burden is on the Defendant to show that such a measure of loss is not reasonable.

It is not relevant that a claimant has not yet carried out the replacement or repair or even that they will never carry out the replacement or repair. The measure of the loss is what it would have cost to reinstate and repair the equipment.

 

Conclusion

On the basis of this judgement, the correct measure of loss is the cost of reinstatement and repair. It is not relevant that a claimant may not have carried out the replacement or repair or even that they may never carry out the replacement or repair.

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