Costain Ltd v Charles Haswell & Partners Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 24 September 2009 |
| Neutral Citation | [2009] EWHC 3140 (TCC) |
| Docket Number | Claim No: HT-07–351 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 24 September 2009 |
[2009] EWHC 3140 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
RICHARD FERNYHOUGH QC (Sitting as Deputy High Court Judge)
Claim No: HT-07–351
INDEX
| INTRODUCTION | 4 |
| CONTRACT - NO CONTRACT? | 8 |
| Background | 8 |
| Decision on Contract Formation | 10 |
| Conclusion | 13 |
| THE CONSULTANCY AGREEMENT | 13 |
| Whether Clause 7.4 creates an obligation of strict liability | 16 |
| Whether the surcharge mound designed by Haswell falls within Clause 7.4 | 18 |
| Conclusion | 19 |
| Whether the surcharge mound was constructed in accordance with Haswell's design | 19 |
| The date for the commencement of compliance with the settlement criteria | 19 |
| THE HASWELL DESIGN | 20 |
| The Ground Treatment Scheme | 24 |
| The Experts | 25 |
| ALLEGATIONS OF NEGLIGENCE | 26 |
| Allegations during the Pre-Tender Period | 26 |
| Summary | 29 |
| Pre-loading or Surcharging | 30 |
| Haswell's Case on the Pre-tender Design | 32 |
| The correct interpretation of the Norwest Holst Report. | 34 |
| The recommendation to preload. | 37 |
| Conclusion | 38 |
| The Post-Tender Design | 39 |
| Allegations of Breach of Duty | 40 |
| Haswell's Response | 41 |
| Discussion and Decision | 42 |
| DID THE SURCHARGE SCHEME WORK? | 43 |
| The Monitoring Data | 44 |
| Discussion and Decision | 46 |
| Cone Penetration Tests Results | 47 |
| Discussion and Decision | 48 |
| The Haswell Report | 48 |
| Overall Conclusions | 49 |
| PROLONGATION | 50 |
| Issue 1: The way the agreed methodology has been applied | 51 |
| Issue 2: Critical delay to the foundations of the RGF and IW or to the Project as a whole? | 51 |
| Issue 3: Delay to the Treated Water Reservoir | 53 |
| Issue 4: When did the piling works end? | 53 |
| Issue 5: Additional Piles | 54 |
| Issue 6: Activity X335 | 54 |
| Issue 7: Winter Working | 55 |
| Summary | 55 |
| Conclusions on delay | 56 |
| QUANTUM | 56 |
| 1. Additional Construction Costs | 56 |
| (i) Additional Cost of Excavating Contact Tank out of Sequence | 58 |
| (iii) Placement and Removal of 1m of Additional Fill | 59 |
| (iv) Placement and Removal of 7, 456m3 over and above the quantities advised by Haswell | 59 |
| (v) Installation of Drainage Blanket | 59 |
| Removal of drainage blanket | 60 |
| Additional Earthworks Testing | 60 |
| 2. Cost of Piling | 60 |
| 3. Prolongation Costs | 62 |
| 4. Winter Working | 64 |
| 5. Head Office Overheads | 64 |
| 6. Costs of Ondeo Degremont | 65 |
| Discussion and Decision | 67 |
| Conclusion | 68 |
| Settlement between Costain and UU | 69 |
| Sums recovered by Costain from UU in respect of OD's claims | 72 |
| Quantum Summary | 73 |
| INTEREST | 73 |
| 11 November 2003 - July 2004 | 75 |
| February 2005 - September 2005 | 75 |
| 17 February 2006 - 24 November 2006 | 75 |
| January 2007 - August 2007 | 75 |
| COSTS | 76 |
| Who was the Successful Party? | 77 |
| Decision | 77 |
| Costain's conduct | 78 |
| (i) Exaggeration of the claim | 78 |
| (ii) Raising and pursuing claims when it was unreasonable to do so | 78 |
| (iii) Offers to settle | 79 |
| Decision | 79 |
| Partial Success/Issue based Costs Order | 79 |
| Overall Conclusion | 81 |
Introduction
In this case Costain Limited (“Costain”), the well known construction and civil engineering contractor claims damages for breach of contract and/or negligence against the Defendant, Charles Haswell & Partners Ltd (“Haswell”) which carries on business as specialist consulting civil engineers. In summary, Costain alleges that it engaged Haswell to advise Costain in relation to the design of suitable foundations on a project being undertaken by Costain. Costain acted upon Haswell's advice in carrying out the recommended ground treatment preparatory to the construction of foundations which were designed by Haswell. Costain alleges that the ground treatment works failed and that Haswell was in breach of contract and in breach of its common law duty of care in recommending and designing the ground treatment works. As a result, Costain alleges that Haswell's design was defective and failed to work so that Costain had to abandon it and had to substitute piled foundations which caused considerable extra costs and delay to the works, in respect of which Costain seeks to recover compensation by way of damages from Haswell.
The matter arises in the following way. In 2001 United Utilities Water Limited (“UU”) wanted to provide new water treatment works at Lostock and a new sludge treatment plant and potable water pumping station at Rivington, near Bolton, Lancashire, collectively known as “the Lostock and Rivington Water Treatment Works” (“the Project”). This Project also known as the AMP3 Rivington and Lostock WDW Contract, comprised the design and construction of a direct filtration plant, including chemical handling, chlorine contact tank and washwater treatment plant, a new treated water reservoir of 35Ml capacity and associated pumping stations at Lostock and new washwater clarifiers and a new pumping station at Rivington. This case concerns only two of the structures to be constructed by Costain vis. the Rapid Gravity Filters building (“RGF”) and the Inlet Works (“IW”).
In September 2001 UU invited Costain to submit a tender for the design and construction of the Water Treatment Works. On 4 October 2001 Costain sent to Haswell a copy of the Tender Documentation which it had received and, in a covering letter, informed Haswell that Costain wished it to carry out the civil engineering design work required for the Water Treatment Works. Such design work included the design of the foundations for the structures and, for that purpose, within the Tender Documents was the Design Statement issued by UU which specified that “Total and differential settlements of foundations and base slabs shall not exceed 25mm and 10mm respectively.” It is common ground between the parties that this specification for settlement tolerances is tight. It is also common ground that, at all material times, Haswell had notice of this Specification and it designed the foundations to comply with it. On about 11 October 2001, an introductory meeting took place between Costain, Haswell and Ondeo Degremont Ltd. (“OD”) the Mechanical, Electrical & Process Designer. Shortly after this meeting, and, before any contractual terms had been discussed between them, Haswell commenced work on the design of the foundations for the structures. The information concerning the sub-soil conditions upon which Haswell based its foundation designs was provided in the form of a Ground Investigation Report dated 17 October 2001 from Norwest Holst Soil Engineering Ltd. (“the Norwest Holst Report”) which had been provided to Costain by UU.
Haswell assigned Mr. Andrew Marsh to the task of recommending the design solution for the structures based upon the Norwest Holst Report. Mr. Marsh, who had only recently joined Haswell, holds a BSc in Geology, a MSc in Engineering Geology and is a Chartered Engineer. Prior to joining Haswell, Mr. Marsh had 14 years experience working as an engineer undertaking all manner of ground investigations, geotechnical reporting and working on construction sites for highways, dams and development projects involving considerable earthworks and foundations. However, Mr Marsh had no previous experience of designing foundations after the ground had been treated by preloading. Mr. Marsh reported to Christine Wright, Haswell's Structural Engineer, in carrying out his work. In the period between Mr. Marsh starting work and 12 December 2001, there were discussions between Haswell and Costain concerning the type of foundations which could be used for the RGF and IW Buildings. Three different foundation designs were considered vis. piling, vibro-compaction and surcharging the sub-soil followed by conventional foundations. Of these piling was considered to be the most expensive. At all times Costain had made it clear to Haswell that Costain wished to keep its tender price as low as possible in order to secure the Project.
On 12 December 2001 Mr. Marsh sent to Ms. Wright a memorandum dated 12 December 2001 headed: “Preliminary Geotechnical Assessments”. This memo consisted of a 5 page Report on the ground conditions at the site together with Preliminary Geotechnical Assessment Sheets (“PGAS”) in respect of all the structures which were included in the Tender Documents. In the PGAS Mr. Marsh recommended a number of different design solutions for different structures including mass concrete foundations and piled foundations. In respect of both the RGF and IW structures Mr. Marsh recommended that conventional foundations could be constructed provided that the ground had previously been surcharged with a pre-load in order to take out significant settlements (“the ground treatment works”). He recommended a load of 70KPA (provided by an earth mound about 3–4m in height) should be applied for a duration of 6–8 weeks.
On about 10 January 2002 Costain submitted its tender for the Water Treatment Works to UU incorporating foundation designs based upon Haswell's recommendations contained in the PGAS. However, in that Tender, there is no identifiable sum included in respect of the surcharge treatment to the foundations of the RGF and IW structures.
On 22 January 2002 Mr. Marsh sent a memo to Steve Page, Haswell's Group Engineer, for onward transmission to Costain. In that memo Mr. Marsh gave further detail of how the surcharge procedure should be carried out and also commented that the surcharge solution was based upon the specified criteria in the Tender Documents being applied with the baseline point for the assessment of performance, taken as the commissioning of the structures. This memo was sent on to Costain and also...
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