The House of Lords considered the meaning of a fair rate in a salvage dispute under a standard salvage form. It held that, in that context, a fair rate for equipment and personnel meant a fair rate of expenditure, inclusive of overhead expense, and did not include any element of profit; the profit element lay elsewhere in the scheme. The exclusion of profit turned on the particular wording, and the court made clear it was not of general application. Where remuneration and expenditure were compared, remuneration was in the end preferred, but profit was excluded on those words.

An instruction to dig out gravel and replace it with clay fill was to be paid on a fair valuation under the ICE conditions. The judge held that a fair valuation starts from what it reasonably cost to carry out the work, provided that cost was reasonably and properly incurred, and that it must include the cost of labour, plant and materials together with overheads and profit. A valuation that left out overheads and profit would not, within the meaning of the contract, be a fair one. Cost or expenditure that a reasonably competent contractor would not have incurred in the same circumstances falls outside a fair valuation.

Serck was entitled to a reasonable sum, not payment at normal rates. The judge held that the site conditions and the conduct of the parties are relevant to a reasonable remuneration. Where value is assessed on a cost-plus basis, a deduction should be made for time spent repairing or repeating defective work and for inefficient working; where value is assessed by reference to quantities, those matters do not affect the basic valuation, though a deduction is made on either basis for defects remaining at completion. The judge drew on Lachhani v Destination Canada, where a fair valuation from costs required those costs to be reasonably, necessarily and properly incurred, with adjustment where the contractor worked inefficiently or left defective work.