Compensation for harm resulting from improper performance of the works contract cannot be determined solely as the equivalent of the expected costs of removing defects. Especially erstwhile repairs have not yet been carried out. The compensation must not lead to enrichment of the victim or to an excessive burden on the contractor. This is the essence of the resolution of the extended, seven-member composition of the civilian Chamber of the ultimate Court.
How to find the value of the injury?
The Court of Appeal in Szczecin, recognizing the appeal of the defendant's construction company, addressed the legal question to SN. The territory court ruled from it – according to the investor's request – about 110 1000 PLN compensation for defective execution of insulation works of walls and foundations of the building. The action was brought respective years after the completion of the work.
The contested company questioned the manner in which the injury was established. It argued that the injury meant a change in the property of the injured individual — an increase in liabilities or a simplification in assets — whereas the specified indication of the foreseeable costs of removing the defects, which had not yet been incurred, did not constitute evidence of its existence. She besides claimed that the plaintiff had shown neither increased maintenance costs of the building nor expenses for repairing faults.
The Court of Appeal raised doubts as to the rules under which the value of the harm should be determined. He pointed out that there are 2 methods in case law and doctrine.
The first, traditional, is to compare the value of a given asset before and after an event causing damage.
The second, the alleged cost estimation method, is based on the determination of the expected costs of repairing the goods, that is, bringing it to a state compatible with the contract, even though these expenses have not yet been incurred. This solution is frequently used, among another things, to find compensation from the communication OC.
A problem of large weight
The SN's three-member composition considered that the importance of the issue justifies referring the question to the composition of 7 judges. It read:
– Can compensation for harm resulting from improper execution of the works contract be established (in the light of Article 471 of the civilian Code in the above-mentioned Article 363 KC and Article 361 §2 KC) as equivalent to the costs not incurred by the creditor for the intent of removing defects in the performance of the contractor but not performed on the closing date of the hearing?
In the justification of the question, the judges pointed out that although the value of the harm usually corresponds to the cost of repair, it is not always possible to reconstruct the condition before the injury or it would be economically unjustified. Even if repair is possible, the victim does not should be curious in doing it.
The seven-member composition of the SN did not support the costorisation method. As explained in the explanatory memorandum of the resolution by justice Adam Doliwa, the mention should be to compare the property of the injured individual before and after the damage.
According to SN, the cost estimation method carries the hazard of enriching the victim on the basis of unprecise estimates of repairs that may never be performed. Especially since defects do not always automatically decrease the value of things.
File number: III CZP 25/25
Stefan Jacino
attorney, Wardyński & Partners
The resolution does not make it easier to search compensation from unreliable contractors. It does not say how to find the amount of damage, but just how not to. 1 of the simpler ways to calculate the amount due was excluded. So each time you gotta measure the value of a building with defects and compare it with the value of an object made without defects, in order to know if the buyer has become poorer. Or how much he lost by financing the removal of flaws. specified an approach is consistent with the doctrinal concept of damage. It was considered that judging damages on the basis of the valuation of works that the contracting authority may not carry out at all would be a violation of those rules. Thus, erstwhile assessing the amount of damage, it should be based on events that have already occurred and not on future uncertain expenditures. However, if the investor decides to remove the defects, he will gotta first finance the repairs himself and then recover the costs.
