Attorney General v Shimizu Corporation [1996] HKCFI 499
Figures in brackets refer to paragraph numbers in The Law of Damages

Assessment of damages - construction law  - total cost method of assessment - global claim - construction law - apportionment of damage - duty to assess damages - Chaplin v Hicks/best estimate rule applied
The issue
The claimants, Shimizu, had submitted a total cost/global claim for delay and disruption in respect of a part of the works. The arbitrator, however, held that progress was only affected by employer's breach in part of the relevant section of work, the effect of which was that apportionment of the total cost claim would be required. He said that:

".. I am satisfied that Shimizu did suffer some disruption to the Tower, in particular delay to the construction of SD2" [stair drum 2] .....but that it ceased, or should have ceased, to have effect by L6... I am unable to quantify the effect of disruption to stair drums to L6 and I do not think that in the circumstances it is encumbent (sic) upon me to estimate a figure for disruption ... when the Tower disruption claim is presented as a global claim. Accordingly the disruption claim for the Tower fails."

Shimizu relied on the following cases, submitting that the arbitrator was under a duty to assess damages/make an apportionment of the total cost claim: Chaplin v. Hicks [1911] 2 K.B. 786 (6.10); Penvidic Contracting Co. Ltd. v. International Nickel Co. of Canada Ltd. 53 DLR (3d) 748 (6.14) and Thompson v. Smiths Shiprepairers (North Shields) [1984] QB 405 (6.24-6.26). As to whether the arbitrator was correct in holding that he was not obliged to make an assessment Leonard J stated that:
"Being satisfied that Shimizu did suffer some disruption to the Tower, in particular delay to the construction of SD2 [stair drum], but that it ceased, or should have ceased, to have effect by L6, the Arbitrator was under a duty to assess quantum. He declined to do so on the basis that calculations were lacking. He could have either found a figure, doing his best on the material available or invited the further assistance [see missing evidence] of the parties. Having found a right he could not deny a remedy. I have already rejected the suggestion that the Arbitrator was bound to make a final adjudication on all matters pursuant to an alleged agreement between the parties. Just as the Arbitrator indicated that he was going to seek further written submissions in relation to Items 1A-20 and 1A-21, he was entitled to invite written submissions to assist him in a calculation of quantum in regard to the matters which Shimizu seeks to have remitted. The quantum of the disruption to the Tower will be remitted to the Arbitrator for further consideration. In addition to any submissions which may be made to him by the parties, it may be that he will decide to hear further evidence."
Note up and Comment

The decision of Leonard J was overturned on appeal. The HKCA said that the judge had been wrong to remit the case for assessment since there had been an agreement between the parties to implement a "guillotine procedure" in order to bring finality to the proceedings. An enquiry as to damages/further opportunity to comment was not appropriate and would have caused prejudice to the A.G: Attorney General v Shimizu Corporation [1997] HKCA 529 Comment: If the effect of the guillotine was to prevent any further enquiry as to damages or opportunity to comment then the arbitrator should have assessed Shimizu's entitlement on the basis of the available evidence: see missing evidence and Tai Hing Cotton Mill. The only alternative open to the arbitrator would have been to make an apportionment "however rough and ready the result" - see liability cases and the "Apportionment Cases" referred to therein. Note in particular the extract from Golden Hill Ventures v Kemess Mines and the approach to assessment therein.

Copyright Stewart Dunn except:
Extracts from transcripts of HK court judgments published by HKLII are copyright of the Hong Kong Special Administrative Region Government.