Barclays Bank Plc v Fairclough Building Ltd [Off Ref Ct]
| Jurisdiction | England & Wales |
| Judge | Bowsher |
| Judgment Date | 07 July 1994 |
| Date | 07 July 1994 |
| Court | Official Referees' Court |
Official Referees' Business
His Honour Judge Bowsher QC
John Uff QC and Alexander Nissen (instructed by Denton Hall Burgin and Warrens) for the plaintiffs.
Roger Ter Haar QC and Andrew Rigney (instructed by Beachcroft Stanleys) for the defendants.
The following cases were referred to in the judgment:
Auburn Municipal Council v ARC Engineering Pty Ltd [1973] 1 NSWLR 513.
Barclays Bank plc v Fairclough Building Ltd & Ors [1994] CLC 529.
Bevan Investments v Blackhall & StruthersUNK (1977) 11 BLR 78.
Board of Governors of the Hospitals for Sick Children v McLoughlin and Harvey plc (unreported, 1987).
Darlington Borough Council v Wiltshier Northern Ltd [1994] CLC 691.
Dean v AinleyWLR [1987] 1 WLR 1729.
Dodd Properties (Kent) Ltd v Canterbury City CouncilWLR [1980] 1 WLR 433.
Harbutt's “Plasticine” Ltd v Wayne Tank and Pump Co LtdELR [1970] 1 QB 447.
Livingstone v Rawyards Coal CoELR (1880) 5 App Cas 25.
Minscombe Properties Ltd v Sir Alfred McAlpine & Sons Ltd [1986] Con LJ 303.
Radford v De FrobervilleWLR [1977] 1 WLR 1262
Richard Roberts Holdings Ltd v Douglas Smith Stimson PartnershipUNK (1988) 46 BLR 50.
Robinson v HarmanENR (1848) 1 Exch 850; 154 ER 363.
Ruxley Electronics and Construction Ltd v ForsythWLR [1994] 1 WLR 650.
Taylor (CR) (Wholesale) Ltd & Ors v Hepworths LtdWLR [1977] 1 WLR 659.
Damages — Breach of contract — Contract for cleaning of roof made of asbestos sheets — Work carried out without adequate precautions — Extensive asbestos contamination of building and atmosphere — Damages to cover cost of remedial works — Sealing of roof to contain asbestos — Building only saleable on open market if roof replaced — Whether plaintiffs entitled to costs of replacing roof or diminution in value if roof not replaced — Date at which reasonable to replace roof.
This was an assessment of damages under a judgment of an Official Referee, as varied by the Court of Appeal ([1994] CLC 529), for breach of a building contract.
Under an agreement in the JCT standard form (1984 edn) the defendant building contractor undertook to carry out maintenance work to two warehouses used by the plaintiff bank for storage of documents. The cleaning of two roofs made of asbestos sheets was carried out by sub-contractors without adequate precautions in breach of contract. As a result serious asbestos contamination of the building and atmosphere occurred. Extensive remedial works were carried out, including the sealing of the roof to prevent the escape of the asbestos dust. The plaintiffs brought an action for breach of contract. Judge Havery QC, as Official Referee, held that the defendants were primarily liable but made a finding of 40 per cent contributory negligence against the plaintiffs for failing to prevent the defendants from committing the breaches. On appeal the Court of Appeal held that contributory negligence was not a defence to a claim for breach of a strict contractual obligation. While an appeal by the defendants was pending on that point of law, a hearing on damages proceeded. After the bank's evidence the defendants agreed to pay damages of £3,225,000 including interest. The hearing continued in relation to one contentious issue as to whether the plaintiffs could recover damages for “recladding”, that is removing the contaminated material and replacing the roof, without which the building was unsaleable, or failing that for the diminution in value of the building, and if so, at what date it was reasonable to replace the roof.
Held, awarding the plaintiffs damages for recladding of £665,572:
1. Since the buildings were not saleable on the open market in their present state, but would be restored to the value they would have had before contamination if the recladding took place, it was reasonable for the plaintiffs to carry out the decontamination work and for the defendants to pay for it, thereby restoring the plaintiffs to the position they were in before the wrong for which they were being compensated took place.
2. In view of the principle that the damages awarded were to be reasonable as between the parties, it was wholly unreasonable to expect the plaintiffs to wait until 2015, when the roofs would in any event need to be replaced, before decontaminating the buildings. Since the buildings could neither be sold nor sub-let until the work was completed, and in the meantime there remained a risk of further contamination through accident or high winds, it was reasonable for the recladding to be carried out in 1995.
3. The amount of damages recoverable by the plaintiffs was not dependent on their doing the recladding. If they took the damages and then decided not to do the work, accepting all the risks and detriments which that involved, that was a matter for them.
4. Damages for recladding were to be calculated as equivalent to the cost of doing the work in 1995, with a discount for payment in advance but no deduction for betterment, since the roof could only be replaced with a new roof and not one of the same age as that replaced.
His Honour Judge Bowsher QC: This is an assessment of damages under a judgment of His Honour Judge Havery QC, an Official Referee, dated 13 May 1993 as later varied by the Court of Appeal on 6 May 1994 ([1994] CLC 529).
There is an outstanding petition to the House of Lords for leave to appeal against the judgment of the Court of Appeal. As I understand it, the question sought to be put to the House of Lords is whether the Court of Appeal was right to hold that as a matter of law it was not open to Judge Havery QC to order that the damages awarded to the plaintiffs should be reduced by 40 per cent on account of contributory negligence. Even if the House of Lords were to grant leave to appeal and later allow an appeal in favour of the defendants, my assessment would only be affected by the deduction of an appropriate percentage.
Having heard and tested much of the plaintiffs' evidence, counsel for the defendants very properly and helpfully agreed with counsel for the plaintiffs on 21 June 1994, that liability for all heads of the plaintiffs' claim other than one should be settled by payment by the defendants of £3,225,000, that sum to include interest. The trial continued in relation to the one head not agreed. The defendants called no evidence. At the close of counsel's speeches, at the request of counsel for the plaintiffs, on 28 June 1994,1 ordered that there should be judgment for the plaintiffs for the agreed figure of £3,225,000 (inclusive of interest up to 28 June 1994) pursuant to RSC, O. 27, r. 3. I reserved my judgment on the remaining contentious issue. There were certain issues with a third party and a fourth party with which I am not concerned.
To understand the contentious issue, it is necessary that I review the facts in brief. This is an action for damages for breach of contract arising out of maintenance work carried out by the defendant at Wythenshawe, Manchester pursuant to a contract dated 31 March 1989. The damages claimed are in respect of the cost of rectifying asbestos contamination resulting from cleaning operations on the roofs of two buildings, Units 1 and 2.
The plaintiffs are lessees of various industrial units at Wythenshawe, Manchester. The two buildings known as Units 1 and 2 Dallimore Road are each approximately 90 × 40m, are parallel to each other and some 35m apart. They occupy the area of about two football pitches. The age of the buildings has not been proved, but the plaintiffs hold them pursuant to a lease dated 11 March 1977 for a term from 30 April 1975 to the year 2049.
The buildings have roofs formed of corrugated asbestos sheeting. Unit 1 has a double pitched roof running the length of the building with a valley gutter. Unit 2 has six shallow pitched roofs running at 90 degrees to the length of the building with five valley gutters. The precise construction of the buildings is not directly material save that all the roofs had certain minor defects which could in some circumstances permit leakage into the building.
Between 17 April and late May 1989, the defendants through sub-contractors purported to carry out maintenance work on the asbestos...
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