Aldi Stores Ltd v (1) Wsp Group Plc (2) Wsp London Ltd (3) Aspinwall & Company Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 15 January 2007 |
| Neutral Citation | [2007] EWHC 55 (TCC) |
| Docket Number | Claim No: HT-06–131 |
| Date | 2007 |
| Year | 2007 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2007] EWHC 55 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St. Dunstan's House
131–137 Fetter Lane
London EC4A 1HD
the Honourable Mr Justice Jackson
Claim No: HT-06–131
MR DAVID THOMAS QC (instructed by Messrs. Cobbetts) appeared on behalf of ALDI STORES LIMITED
MR MICHAEL SOOLE QC (instructed by Messrs. Reynolds Porter Chamberlain) appeared on behalf of WSP GROUP PLC and WSP LONDON Limited
MR MICHAEL DOUGLAS QC (instructed by Simmons & Simmons) appeared on behalf of ASPINWALL & COMPANY LIMITED
Monday, 15 th January 2007
This judgment is in five parts, namely Part 1 – Introduction; Part 2 – The facts; Part 3 – The Present Proceedings; Part 4 – The Law; Part 5 – The Application to Strike Out.
Part 1: Introduction
This is an application to strike out proceedings as an abuse of process. The claimant in this action, and respondent to the application to strike out, is Aldi Stores Limited, to which I shall refer as “Aldi”. The defendants in this action are WSP Group PLC (“WSPG”), WSP London Limited (“WSPL”) and Aspinwall & Company Limited (“Aspinwall”). Aspinwall are environmental consultants. WSPG and WSPL are consulting engineers. It should be noted that WSPG is the successor company of Kenchington Ford PLC. Since nothing turns on the distinction, I shall refer to both companies as “WSPG”.
This litigation concerns a construction project on land at Dallow Road in Luton. I shall refer to that land as “the Dallow Road site”. The main contractor which carried out the construction project was Holmes Building Limited, subsequently known as Holmes PLC. I shall refer to this company as “Holmes”. The ground improvement contractor which Holmes employed was Norwest Holst Soil Engineering Limited, to which I shall refer to as “Norwest Holst”.
In this judgment I shall refer to B&Q PLC as “B&Q”. I shall refer Grantchester Properties (Luton) Limited and Grantchester Retail Parks PLC as “Grantchester”. I shall refer to Laporte Industries Limited as “Laporte”.
Let me now say something about Holmes' insurers. During the relevant years Holmes had insurance cover of £5 million. The primary layer insurers, who were on risk for £2 million, were Terra Nova. I shall refer to them as “the primary insurers”. The second layer insurers, who were on risk for £3 million, were Brit UW Limited, to whom I shall refer as “BU”.
Finally, I shall refer to the Third Parties (Rights against Insurers) Act 1930 as “the 1930 Act”. That concludes my introductory remarks. It is now time to turn to the facts.
Part 2: The Facts
Between 1937 and 1969 Laporte used the Dallow Road site as a repository for chemical waste produced by works at its nearby factory. After 1969 Laporte no longer needed the Dallow Road site for that purpose. Instead, Laporte decided to develop the site.
In about 1989 Laporte retained Aspinwall to advise on geotechnical aspects of the proposed development. Between 1990 and 1994 Aspinwall tendered advice to Laporte and produced a number of reports concerning the Dallow Road site. In particular, Aspinwall recommended a geotechnical design for the proposed development which included vibro-compaction.
The terms of Aspinwall's engagement were not set out in any formal document until 28 th October 1993. On that date Laporte and Aspinwall entered into a deed of appointment, which regulated Aspinwall's past and future services. By that deed Aspinwall warranted that it had exercised and would exercise reasonable skill and care in performing its services.
By a deed of appointment dated 29 th November 1993 Laporte engaged WSPG to provide engineering services in relation to the proposed development. By that deed WSPG warranted that it had exercised and would exercise reasonable skill, care and diligence in performing its services. WSPG gave advice to Laporte and prepared a conceptual design for the foundations of the proposed development. This design incorporated vibro-compaction in accordance with the recommendations made by Aspinwall.
In 1994 Laporte invited tenders from contractors for the design and construction of the proposed development. Holmes was one of the contractors which submitted a tender.
In April 1994 Holmes engaged WSPL to provide engineering services in relation to the project. That engagement was subsequently formalised in a deed of appointment dated 28 th November 1994. It was an implied term of WSPL's engagement that WSPL would exercise reasonable skill and care in the performance of its services.
On 4 th July 1994 Laporte and Aldi entered into an agreement for a lease in respect of part of the Dallow Road site. I shall refer to this part of the site as “Aldi's land”. Under the agreement for a lease Laporte agreed to construct a store, service area, car park and access roads on Aldi's land.
Laporte entered into an agreement for a lease with B&Q in respect of the remaining part of the Dallow Road site. I shall refer to that part of the site as “B&Q's land”. Laporte agreed to construct a retail warehouse building with garden centre and related facilities on B&Q's land. B&Q's retail warehouse was to be, and was in fact, substantially larger than Aldi's store.
By a building contract dated 25 th August 1994, made between Laporte and Holmes, Holmes agreed to design and construct the various buildings and associated works which were required on Aldi's land and B&Q's land. One term of the building contract was that the maximum settlement permitted would be 25 millimetres.
Holmes duly carried out the building works which were required. Holmes engaged Norwest Holst to carry out vibro-compaction works on the Dallow Road site before the various buildings were constructed. Holmes completed its construction work in or about June 1995.
On 22 nd December 1995 Laporte granted a lease of the Aldi land to Aldi for a term of 25 years beginning on 24 th June 1995. At about the same time Laporte granted a lease of the B&Q land to B&Q for a term of 25 years.
Pursuant to their contractual arrangements with Laporte, both Aldi and B&Q were entitled to warranties from the various entities which had carried out works of design and construction. Accordingly, Aspinwall, WSPG, WSPL, Holmes and Norwest Holst all executed warranties to the effect that they had properly performed their respective functions.
In the late 1990's settlement occurred which caused damage both to Aldi's buildings and to B&Q's buildings. Both companies were advised that the vibro-compaction was an unsuitable method of ground improvement and had not achieved its objective. Accordingly, both companies commenced legal proceedings in order to recover their losses.
On 22 nd June 2001 Aldi commenced an action in the Technology and Construction Court against Holmes, claiming damages for breaches of the warranty given by Holmes to Aldi, and also damages for negligence. I shall refer to this litigation as “the Aldi action”. On 7 th March 2002 B&Q commenced an action in the Technology and Construction Court against Holmes, claiming damages for breaches of the warranty given by Holmes to B&Q. I shall refer to this litigation as “the B&Q action”.
It should be noted that during the interval between the commencement of the Aldi action and the commencement of the B&Q action, Holmes went into administration. In the short term this circumstance did not affect the conduct of the litigation, because Davies Lavery, who were solicitors instructed by Holmes' primary insurers, were acting for Holmes in both actions. The primary insurers took the view that Aldi's claim and B&Q's claim attached to different years of cover.
I shall not recite the detailed procedural history of both actions in this judgment. Suffice it to say that in due course Holmes brought Part 20 proceedings in both actions against Aspinwall, WSPG, WSPL and Norwest Holst. There were further Part 20 proceedings brought as between the various Part 20 defendants. The Part 20 proceedings brought by Holmes against Aspinwall, WSPG, WSPL and Norwest Holst were based upon the warranties which each of those parties had given to Aldi and B&Q respectively. Holmes alleged breaches of those various warranties. Holmes also alleged that the same conduct amounted to breaches of duties of care which the Part 20 defendants owed to Aldi and B&Q.
During 2001 and early 2002 the Aldi action proceeded separately from the B&Q action. During this period Aldi's action was prosecuted with signal success. On 15 th March 2002 Aldi obtained judgment on liability against Holmes. On 1 st October 2002 Aldi obtained judgment in its favour on a preliminary issue concerning the interpretation of Aldi's covenants under the lease. This preliminary issue was relevant to quantum. On the same occasion the court ordered Holmes to make an interim payment of £218,593.50.
Let me now turn to the B&Q action. B&Q decided to join the Part 20 defendants, or at least most of them, as defendants to B&Q's claim. Thus, by late 2002 the pleadings in that action had substantially increased in volume.
In September 2002 a third action was commenced concerning the Dallow Road site. The claimant in the third action was Grantchester. Grantchester was by then the owner of the freehold of the property. Grantchester contended that the value of its reversion had been diminished by the foundation defects. Initially, Grantchester only sued WSPL. Subsequently, however, Grantchester joined other parties as defendants in what became a consolidated action. I shall...
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