The Australian position in relation to global claims, which are
"ambit claims" where the loss claimed is caused by a
number of different factors, has been confirmed by the New South
Wales Court of Appeal in a decision made in June this year,
Mainteck Services Pty Ltd v Stein Heurtey SA  NSWCA
184. Global claims have been described in the leading Australian
decision from the Victorian Supreme Court of John Holland
Construction & Engineering Pty Ltd v Kvaerner RJ Brown Pty
Ltd (1996) 82 BLR 81 as a claim where "the claimant does
not seek to attribute any specific loss to a specific breach of
contract, but it is content to allege a composite loss as a result
of all of the breaches alleged, or presumably as a result of such
breaches as are ultimately proved." The article adopts this
description of global claims in its discussion of the topic.
In general terms, the Australian position is that
every cause of the loss making up the "global
claim" must be attributable to the owner (assuming the claim
is under the head contract). The Honourable David Byrne QC in his
article Total Costs and Global Claims1set out
the three elements of a global claim:
"(1) The contract price is realistic, that is,
it is equivalent to the reasonable price of performing the contract
(2) The actual cost figure represents a reasonable cost of
carrying out the project including the extra work.
(3) No factor other than the compensable event is responsible for
the difference between the actual cost and the contract
It is the third element that has caused most controversy.
Following the publication of the above article and the decision
of John Holland Construction & Engineering Pty Ltd v Kvaerner
RJ Brown Pty Ltd (1996) 82 BLR 81 there were two decisions
delivered in the United Kingdom 2which (contrary to the third
element above) opened the door to an "apportionment
Since those UK decisions, the "apportionment approach"
has been rejected in Australia. In Mainteck the Court held:
"... (the contractor's) submission, before
the Referee, the primary judge and this court, was that it was
sufficient for it to establish a causal connection between some
breaches by (the owner) and disruption, as a result of
which it said it was entitled to either the whole of its claim, or
an apportionment. That is not the
law."4 (emphasis added)
This rejection of the "apportionment approach" was
also confirmed in the recent Western Australian Supreme Court
decision in DM Drainage & Constructions Pty Ltd (as trustee
for DM Unit Trust t/as DM Civil) v Karara Mining
The key message for those involved with global claims is this:
to succeed on a global claim in Australia, the contractor must
establish that every part of the composite loss claimed was caused
by a compensable event. These decisions reinforce the importance of
good contemporaneous record keeping (from the contractor's
perspective) to ensure that sufficient evidence is available to
demonstrate that the entire loss claimed is caused solely by owner
risk events or the owner's breaches. Equally, good
contemporaneous record keeping from the owner's perspective
will likely arm it with sufficient ammunition to contest the
already precarious "global claim".
1(1995) 11 BCL 397. Also referred to in
Mainteck 2Laing Management (Scotland) Ltd v John Doyle
Construction Ltd  BLR 295 (at  and ); Walter
Lilly & Company v Mackay & Anor  EWHC 1773
(TCC). 3Requires (as referred to in Laing Management)
an objective assessment "according to the relative
importance of the various causative events in producing the
loss" (at ). 4At . 5 WASC 170 at .
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