What is the test for a counterclaim for damages for defective construction?

As to the counterclaim for damages for defective construction, where an employer has accepted work which has not been performed in strict conformity to the terms of the contract, but has reserved any claim he may have for defective performance, the employer may be entitled to a reduction of the price payable to the contractor: 3 Hals. 240. In the present case the measure of damages to be allowed the defendant is the difference between the value of the work as it was performed by the plaintiffs and the value it would have had if it had been performed in a proper and workmanlike manner. This includes not only the damage resulting from the sinking of the chimney, for which the learned trial Judge made an allowance, but also the damage to both the basement and outside walls. As the trial Judge has, however, pointed out, there is no evidence upon which he could find the difference in value between the walls as they stood and the value they would have had if they had been properly built. The evidence was directed either to ascertaining the cost of patching up the defects or to the cost of tearing down the walls and rebuilding them. After accepting the house, the defendant is not entitled to the costs of tearing down and rebuilding the walls unless he had been compelled to tear them down. See Smith v. Johnson, 15 T.L.R. 179.