Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd & Anor

Contractual valuation under a construction subcontract depends on work and materials actually completed, supplied or procured. Time elapsed does not itself create an entitlement to fixed preliminary costs. Unless the contract provides otherwise, partially fabricated or painted steel is not separately payable. Repudiation damages compensate for contractual benefits actually lost. Where the employer had already decided to transfer obligations to another contractor, those obligations cannot generate a further loss. A delay claim requires proof that the breach caused the delay; general assertions and unrealistic production comparisons are insufficient. The final account produced a net judgment of £6,154,246.79 for the main contractor, while repudiation damages were nominal.

This was the final round of consolidated litigation concerning the Wembley Stadium steelwork subcontract. Multiplex, the main contractor, sought damages and abatements for defective work, CB’s repudiation and associated delay. CB sought payment for work, materials, variations, reimbursable costs and temporary steel retained by Multiplex.

The court determined extensive valuation issues under the original subcontract, the Heads of Agreement, the Supplemental Agreement and a related purchase order. It also considered the admissibility of technical opinion from a factual engineer, the proper certification dates, causation of delay, and the effect of CB’s repudiation on the parties’ final account.

1. Final account. The court assessed the value of CB’s work and materials at £46,656,509.22. Multiplex recovered £151,305.39 for defects and £4 nominal damages for repudiation. After accounting for previous payments, interest and retention, CB was ordered to pay Multiplex £6,154,246.79.
2. Valuation. The Supplemental Agreement required valuation by reference to work properly completed and materials actually supplied or procured. The payment programme was not an automatic time-based entitlement to preliminary costs. Completed work stages were payable, but partial fabrication and partial painting were not separately payable without contractual provision. The pre-existing side letter was superseded by the subcontract’s entire agreement clause.
3. Certification and purchase order. CB’s lump-sum entitlement ran to 30 June 2004, reimbursable costs to 16 July 2004, and steel-purchase costs to 2 August 2004. Item 1 of the purchase order paid only for completed fabrication at its specified rate. Item 2 was valued under the subcontract’s fair-and-reasonable variation mechanism and was not subject to lump-sum risk.
4. Repudiation and causation. Damages had to reflect the contractual benefit actually lost. Where Multiplex had already resolved to transfer erection engineering to Hollandia and had engaged Hollandia for that work, CB’s failure to perform those obligations caused no recoverable loss. Multiplex also failed to prove that CB’s repudiation caused delay between August and November 2004. Other causes, including mobilisation, industrial relations, crane problems, weather and methodology changes, explained the progress achieved.
5. Other principles. The court accepted that an engineer giving factual evidence may express opinions reasonably related to facts within his knowledge and experience, although such evidence has less weight than independent expert evidence. It also held that admissions made in the parties’ opening cases could not be withdrawn after trial where the other party would suffer serious prejudice.

The judgment records the following earlier procedural history in the same litigation:

• Court of Appeal. The court upheld the decision on preliminary issues 1–10 in [2007] EWCA 443 (Civ). It upheld the decision on fabrication responsibility but reversed the decision on design responsibility in [2007] EWCA 1372 (Civ).
• High Court (TCC). The preliminary issues were determined in [2006] EWHC 1341 (TCC) and issue 11 was determined in [2007] EWHC 145 (TCC) . Later procedural rulings concerning pleadings were given in [2008] EWHC 231 (TCC) and [2008] EWHC 569 (TCC) .