The defendant building contractor secured a contract to carry out works of improvement to a sewage treatment works owned and operated by the claimant water company that treated wastewater. The claimant’s engagement of the defendant was under the terms of a design and build contract which incorporated a specification that required that the six tank sequencing batch reactor, the “SBR”, (which was to designed, supplied and installed by the defendant) should comply with certain stated performance requirements.

The claimant brought proceedings against the defendant contractor alleging that at all material times since its commission the SBR was unable to operate to the required capacity and/or produce effluent of the required quality. The claimant had incurred the cost of remedial work and sought to recover on the basis of the contract. The defendant counterclaimed for outstanding amounts they alleged were due from the claimant.