Co-operative Group Ltd v Birse Developments Ltd Stuarts Industrial Flooring Ltd ((in Administration)) (Third Party Appellant)

Hearing date :26 March 2013

Approved Judgment

Introduction

This appeal raises the short question whether the Claimant/Respondent has in Paragraph 33A of its Re-Amended Particulars of Claim sought to add a new cause of action to those upon which it already relied in the proceedings. The judge below, His Honour Judge Stephen Davies, sitting in Manchester as a judge of the Queen's Bench Division in the Technology and Construction Court, held that it had not. He granted permission to appeal to this court.

The Claimant is the leasehold owner of a distribution centre known as Swift Valley Central in Rugby. It comprises two very large warehouses connected by an office accommodation block and an external hardstanding on an eleven acre site. It was developed by Kingspark Development Ltd ("Kingspark") who contracted with the Defendant/Appellant, Birse Developments Limited ("Birse") as main design and build contractor. Birse in turn sub-contracted the design and building of the internal warehouse floors to the Third Party/Appellant, Stuarts Industrial Flooring Limited ("Stuarts"). Since Birse seeks an indemnity from Stuarts in respect of any relevant liability to the Claimant, they have made common cause on this appeal as they did before the judge.

On completion of the contractual works in September 1998 the distribution centre was leased to and occupied by the Claimant. In connection with the intended lease Birse provided to the Claimant collateral warranties in relation to the work which effectively put the Claimant into the position of the Employer under the head building contract. Hence the Claimant asserts against Birse a claim in breach of contract. Because the warranties were contained in a contract made under seal the relevant limitation period is twelve years.

A Claim Form was issued in September 2010 with Particulars of Claim attached. It was common ground for the purposes of the appeal before us that the causes of action with which we are concerned accrued in September 1998 and that the September 2010 proceedings were brought in time so far as concerns causes of action then asserted. It follows that any amendment to the Particulars of Claim sought to be made after September 2010 with a view to introducing a cause of action upon which reliance had not hitherto been placed will be impermissible unless the new claim arises out of the same or substantially the same facts as are already in issue on any claim made in the original action — Limitation Act 1980, section 35; CPR 17.4(2). The judge held that the claim sought to be made in the re-amendment did not seek to introduce a new cause of action. Although the point did not therefore arise the judge went on to hold that the claim sought to be introduced by the re-amendment did not arise out of the same or substantially the same facts as are already in issue on any claim made in the original action. By a Respondent's Notice the Claimant challenges this latter conclusion in the event that this court concludes that the proposed re-amendment does seek to introduce a new cause of action.

In broad terms the Claimant complained in the original Particulars of Claim of a number of defects to three distinct areas of the property — (i) the external concrete hardstanding, (ii) the drainage system and (iii) the concrete floor slabs in the warehouses. Numerous breaches of contract are asserted in respect of each alleged defect. On this appeal we are concerned only with the allegations concerning the concrete floor slab inside the two warehouses.

The existing statement of case

The claims made in the original action are for present purposes to be found in the Amended Particulars of Claim. Paragraph 13 sets out relevant contractual terms concerning "Concrete Work".

"… the Employer's Requirements which formed part of the Building Contract contained the Specification for the sub-structure which provided inter alia as follows:

…

2.06 CONCRETE WORK

Concrete work will comply with BS8110 and carried out to the Structural Engineer's requirements.

2.08 GROUND FLOOR SLAB

A reinforced concrete ground slab will be provided to all ground floor areas within the buildings. The slab in respect of the warehouse areas will be designed in accordance with the BCA Interim Technical Note ll, Loading Category 3, Classification: "Heavy" and will accommodate a uniformly distributed superimposed loading of 50. 00 KN/m² (1000 lbs/ft ²) and pallet racking of 70 KN/leg (racking leg loading based on leg centres of 2.70m along length, 0.09m centres across width and 0.20m centres for back legs where positioned back to back).

Ground floor movement joints will be designed so that no vertical movement occurs. The ground floor slab will be constructed so that the top surface is within the tolerances as defined in Concrete Society Technical Report No 34 of FM2 Property IV and free movement areas, and ±10mm from datum. Local level variations shall not exceed ±3mm in a 3.0m straight edge in any direction.

Each warehouse floor slab shall be constructed with not more than 9 No. bays and saw cut joints within the slab shall not be made less than 9.0m apart, unless constrained by pallet layout.

Saw cut and bay joints shall be infilled with suitable filler during construction and to accessible floor areas twelve months after the date of practical completion. A floor joint design drawing shall be produced and issued to the Tenant's representative for agreement before construction commences.

On completion of each warehouse area floor slab a profileograph survey will confirm the achieved surface tolerance, prior to any fitting out works taking place.

Where appropriate, the slab will be designed and constructed in accordance with the recommendations of "The Cement and Concrete Association Technical Report No 550 and BCA Interim Technical Note II". The surface will be power floated and treated with a proprietary surface hardener and penetrating dust inhibitor in accordance with the manufacturer's instructions.

A 1,200 gauge P.I.F.A. polythene damp-proof membrane will be laid beneath the ground floor slab.

The office ground floor slab to be designed to take an imposed loading of 15kN/m² (300 lbs/ft ²) with a surface tolerance and finish appropriate to the specified floor finishes."

Paragraph 15 is also relevant to the pleaded duties:—

"The Defendant also had the following further obligations arising out of or in connection with the Building Contract:

(i) There was a term necessarily implied into the Building Contract that the Defendant would carry out and complete the Building Contract Works so that, upon completion, they would be fit for their intended purpose, namely a high quality distribution warehouse complex.

(ii) There was a term necessarily implied into the Building Contract that the Defendant would carry out and complete the Building Contract Works in a good and workmanlike manner.

(iii) There was a further term necessarily implied into the Building Contract that the Defendant would carry out and complete the Building Contract Works using materials of good quality.

(iv) Further, insofar as the Defendant was a specialist carrying out specialist design and/or construction as part of the Building Contract Works, the Defendant owed to its employer a duty of care at common law in the performance of that specialist design and/or construction work."

Paragraph 28 is headed "The Defects in the Property" and so far as relevant provides as follows:—

"28. The Property suffers from defects, which may be summarised in this way:

…

(iii) The slab in Warehouses 1 and 2 has failed inter alia in the following general respects:

(a) In Warehouse 1 there are cracks up to 20mm wide in the floor that run parallel to the main movement (IDC) joints. Mid-bay cracking has appeared in numerous locations, with crack widths of up to 6mm, substantially exceeding the normal width of structural cracks of 0.3mm. There are misplaced dowels at the IDC joints, preventing them opening and closing properly.

(b) In Warehouse 2 mid-bay cracking has appeared in some locations, with crack widths of up to 1mm, substantially exceeding the normal width of structural cracks of 0.3mm. The slab is below the design thickness of 150mm (less 15mm tolerance), being only 112mm thick in places. The arrises to the main construction joints have deteriorated to such an extent that the central aisle is unusable, because the IDC joints were not designed to be armoured. At certain locations, particularly in the north-west bay, there is severe cracking and displacement, with a 100mm step in the surface of the slab, attributable to defects in the underlying foundation."

It will be apparent from the foregoing that there are two deletions from the original Particulars of Claim.

Paragraph 30 deals with "Breach and Causation". It reads:—

"The...