Broster v Galliard Docklands Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 07 July 2011 |
| Neutral Citation | [2011] EWHC 1722 (TCC) |
| Docket Number | Case No: HT-11-64 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 07 July 2011 |
[2011] EWHC 1722 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Akenhead
Case No: HT-11-64
Stuart Kennedy (instructed by Dutton Gregory LLP) for the Claimants
Simon Howarth (instructed by DKLM LLP) for the SecondDefendants
Hearing date: 1 July 2011
This case has been transferred to the TCC from the Winchester County Court and the first meeting of the parties and the Court has been used by agreement to review whether or not the Claimants' case can in practice be maintained as a matter of law. In effect, the Second Defendant argues that the case as formulated has no realistic prospect of success whilst the Claimants argue that they have a valid and arguable claim.
The Background
This part of the judgement is based on the Claimants' pleadings and is not intended to make final findings of fact. In 1997 Galliard Docklands Ltd ("Galliard") employed East London Construction Limited ("ECL") to design and construct a terrace of six houses which became known as Nos. 16 to 21 Old Bellgate Wharf, Westferry Road, London E14. The building contract ("the Contract") was in the standard JCT Standard Form with Contractor's Design (1981 edition incorporating amendments). The terrace comprised three-storey townhouses with a common roof. ECL completed these works and Galliard sold the premises to 6 individual purchasers including the second and fifth named Claimants (Nos. 17 and 21). The other Claimants are subsequent purchasers of their respective properties (Nos. 16, 19 and 20). The owner of No 18 does not participate in these proceedings.
All the Claimants were the owners when on 8 January 2005 at 1.45 in the morning the premises were subjected to high winds of 44 knots. As a result of this wind the roof to the terrace lifted to a height of up to one metre before falling back on to the top of the walls of the premises, thereby causing damage to the premises and to each of the properties within it. The cause of the roof lifting is said to have been the failure by ECL to ensure (either by way of design or construction) that the roof joists in respect of each of the premises were strapped to the walls of the same and the installation of the ceiling joists into an open bed joint at No 21. Remedial works to the premises were carried out in spring 2007 and half of the total remedial works costs was borne by the National House Builders Council. The damages claim includes for various professional fees, scaffolding, carpeting, remedial works and alternative accommodation or loss of rent claims.
The Claim was issued by or on behalf of the Claimants on 2 January 2008, which was just under three years after the storm-related damage to the properties. For reasons which have been not wholly explained, the matter has not proceeded with any great expedition until the case was transferred to this Court in February 2011. No Defence has yet been filed and indeed Galliard has played no part in these proceedings, it having been liquidated but then reinstated.
The Pleadings
The originally named Claimants included as second and third named Claimants two individuals who in fact acted as agent in acquiring the respective properties for what by amendment are now the second, third and fifth named Claimants. The Claimants apply to have the right names substituted and there is no opposition by ECL to that course of action.
I have set out above the basic facts which are pleaded. The key elements of the remainder of the Particulars of Claim are as follows:
(a) Having set out various terms of the Contract, this is pleaded:
"9. By virtue of the contract and the relationship between [Galliard] and [ECL], [ECL] voluntarily assumed responsibility for the design and construction of the Works and in particular the walls and roof of the premises.
10. Further, in the circumstances, [ECL] owed a duty of care to [Galliard] to use reasonable care and skill to avoid causing [Galliard] economic loss.
11. Further, [ECL] owed a duty of care to the Claimant to use reasonable skill and care to avoid causing loss or damage to other property."
(b) Paragraph 12 pleads:
"In fact, negligently, and in breach of contract, [ECL] failed to design and construct the Works in a satisfactory standard for the reasons set out hereafter and failed to use reasonable skill and care to avoid causing [Galliard] economic loss. Further, [ECL] failed to use reasonable skill and care to avoid causing loss or damage to other property."
(c) At Paragraph 15, in substance these failures are said to be the failure to strap the roof joists in each of the properties to the walls and in one case installing ceiling joists into an open bed joint. Paragraph 16 refers to various Building Regulations and British and NHBC standards said not to have been complied with in relation to strapping of roof joists to walls.
(d) Paragraph 18 states:
"In the circumstances, and for the reasons set out hereinbefore, the design and/or construction of the roof by the Second Defendant was negligent and in breach of its contractual obligations. Further, the same amounted to a breach of [ECL's] duty to [Galliard] to avoid causing [Galliard] economic loss."
(e) The reasons for pleading in this way are set out in the following four paragraphs, which in substance contain the Claimants' arguments before the Court:
"19. The Claimants rely upon Section 3 of the Latent Damage Act 1986 and aver-
(a) at the time of purported completion of the works by [ECL], in circumstances whereby it had failed to strapped to the roof joists of the walls, a cause of action in negligence accrued to [Galliard] against [ECL] (the original cause of action).
(b) each of the Claimants purchased the property at a time after the date on which the original cause of action accrued but before the material facts of the damage had become known.
(c) in respect of each Claimant, s/he acquired a cause of action against [ECL] upon purchasing their respective properties.
20. Further and alternatively to the claim as pleaded in paragraph 16, it is averred that the premises, individually and as part of the terrace amounted to a complex structure, so that the construction of the roof should be regarded as separate property to the rest of the premises.
21. Upon and lifting and falling back of the roof, damage was sustained both to it and to the remainder of the premises, which damage was caused by the negligence of [ECL] as aforesaid.
22. Further and in the further alternative, each dwelling within the premises amounted to a separate property. To the extent to which the lack of strapping in one of the properties, and/or the installation of the ceiling joists into an open bed joint at 21 Old Bellgate Wharf, caused or contributed to the failure of the roof over a separate property owned by a Claimant, that Claimant has a cause of action in negligence against [ECL] in respect of that property, arising out of [ECL's] negligence in the construction of the other properties as aforesaid."
The Arguments
The burden of demonstrating that the Claimants have no realistic prospect or reasonably arguable case is accepted as falling on ECL at this stage. Mr Howarth sought, in summary, to demonstrate that, in so far as this was a claim which relied upon physical damage as a constituent element of tort, there could be no liability because what was damaged was in essence "the thing itself" and authorities demonstrate that in general a party can not sue in tort in relation to damage to a building designed and/or built by a defendant, particularly where there is no contract between the two parties. In so far as the claim is put simply as one for economic loss, there is, he argued simply no cause of action. To the extent that there is reliance on the Latent Damage Act, that only applies where there was an accrued cause of action in tort, in this case as between Galliard and ECL, and that there was no such cause of action before Galliard disposed of the terraced houses in question, there being at that stage no physical damage to the houses.
Mr Kennedy argued that it was premature for the Court to form a view as to the ultimate prospects of success, pending completion of the pleadings and, possibly, the exchange of expert reports. However, in any event, he argued that, broadly for the reasons set out in Paragraphs 19 to 22 of the Particulars of Claim there was a perfectly viable cause of action by way one or other of the three routes set out there.
The Law
It will be a helpful to review the law in relation to building damage related negligence, which brings in consideration of the complex structure. This was considered in some detail in a summary judgement application by a Fourth Party in Linklaters Business Services Limited –v- Sir Robert McAlpine [2010] EWHC 1145 (TCC) to have a claim against it dismissed in circumstances in which it was proceeded against in negligence for allegedly negligently applied insulation to steel chiller pipework; it argued that there was no cause of action by the building owner against it because any carelessly applied insulation which caused or permitted corrosion of (or physical damage to) the steel pipework was damage to the "thing itself". The Court reviewed the law in relation to buildings, stating:
"25. The debate on this application primarily revolved on analysis around the issue as to whether one must classify the insulated steel pipework as one "thing" or, in the context that the pipework was part of an installation in an overall building,...
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