Galliford Try Infrastructure Ltd v Mott Macdonald Ltd and another

Hearing dates: 2, 3, 7–10, 14–17, 21–24, 28–30 April and 8 May 2008

APPROVED JUDGMENT

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic

Introduction

This case relates to the redevelopment of the former Victorian Birmingham Children's Hospital for commercial purposes between about 1998 and 2002. It raises interesting issues about whether, and if so the extent to which, tortious duties arise between non-contracting parties involved in the design and construction of building developments. Particular matters of legal interest are the involvement of a design and build contractor and the presence of what have been termed “disclaimers” on various design documents produced by the engineers and said to have been relied upon.

The site was bounded by a dual carriage road, Ladywood Middleway, on the north side and Francis Road on the west side. A 12 storey (appropriately named) residential building, Tricorn House, was on the south side. The development involved the demolition of most of the old buildings on the site, the retention of the old façade fronting on to Ladywood Middleway (the “Hospital Façade”), the provision of piling broadly around the perimeter of the site, three levels of largely underground parking, the provision of a multi (20) screen cinema, a bowling alley, shops, a fitness centre, hotel and some 80 residential units. The ground floor was referred to as the “Plaza” deck or floor.

The relevant parties were as follows:

(a) Morrison Property Solutions (Birmingham Children's Hospital) Ltd (“MPS”): this was jointly owned by Morrison Developments Ltd (“MDL”) and British Linen Properties plc. Its function, possibly amongst others, seems to have been to employ Morrison Construction Ltd (“MCL”) to carry out the works.

(b) MDL: this was a wholly owned subsidiary of MCL who nonetheless proceeded at arm's length from MCL to a significant extent.

(c) Morrison One Ltd (“MOL”): this was a wholly owned subsidiary of MDL which retained Mott MacDonald Ltd (“MM”), possibly amongst others. MOL changed its name from Morrison Property Solutions (Birmingham Children's Hospital) Ltd and is and was a different company to MPS which acquired the same name at the same time as the MOL name change. MM is the Defendant to these proceedings.

(d) MCL: the Claimant in these proceedings (albeit its name has since changed), MCL was retained by MPS to design and build the Works by an amended standard form of JCT Contract, the contract being entered into on 27 January 2000. The contract sum was a lump sum of £35,375,000. Provision was made for the novation of the various consultants' contracts with MOL or MDL to MCL. In fact, no novation was effected as between MCL and MM.

(e) MM: the consulting engineers retained by MOL to provide structural and building services engineering services. MM is and was one of the largest firms of engineers in the UK with extensive experience of projects such as that with which this claim is concerned.

(f) Damond Lock Grabowski (“DLG”): the architects retained for the development.

(g) Rowen Structures Ltd (“Rowen”): Rowen was the steelwork sub-contractor engaged by MCL to carry out the steelwork for the project. Sometimes wrongly referred to as “Rowans”.

(h) Citex Bucknall Austin (“BA”): the quantity surveyors for the development.

The Morrison companies were part of a large construction and engineering group and were sophisticated and experienced both in building and in design and build operations.

There are two areas of dispute. The first relates to the horizontal or “prop” forces from the piling walls (the “pile bracing issue”) and how they were to be addressed. In essence, MCL claims that it suffered substantial delays and losses by reason of the discovery, after it had entered into its contract, that pile bracing forces had been inadequately or otherwise carelessly addressed by MM prior thereto. The second issue relates to the Hospital Façade; it is claimed broadly that MM told, advised or represented to MCL at various stages prior to MCL's contract with MPS that the Hospital Façade could be retained without special measures to support it and that the row of rooms behind could remain and form part of the development or failed to advise that this could not be done.

As a result of the pile bracing problems, there was a substantial redesign to accommodate the prop forces which caused in turn delays. Additional work had to be done to accommodate the Hospital Façade and delays are said to have arisen in consequence thereof. The losses are said to have arisen primarily in effect because, as MCL claim, it made no or inadequate allowance within its contract price or programme for addressing the pile bracing or the Hospital Facade problems in reliance upon what it had been led to believe by MM in the period leading up to their signing of their contract with MPS.

Rowen has been joined in by MM for a contribution on the basis that, if MM is liable with regard to the pile bracing issue, Rowen is said also to have been at fault. Rowen had no material involvement in connection with the Hospital Façade issue.

As no novation was entered into as between MCL and MM, there never was any contract between MM and MCL. The claim perforce is brought in tort on the basis that there was sufficient to found a duty of care in tort such as to justify the recovery of economic loss. This is said by MCL to arise from the “close relationship” between MCL and MM, MM's “special skill” in respect of the relevant design and other structural matters, MCL's lack of special skill, the foreseeable and actual reliance by MCL on advice and statements from MM and because it was reasonable for MCL to rely upon MM (Paragraph 14 Re-Re-Re-Amended Particulars of Claim).

When this trial started, all aspects of liability, causation, delay and quantification were to be addressed. However, MCL's delay expert, unfortunately, was taken to hospital during the fourth week and could not take part in the trial. In consequence with regret, I decided that all aspects of delay and quantum should be adjourned except two issues to which I will return.

Following this Introduction, the judgment is divided into the following chapters:

General Description of the Works and Terms Used

The Witnesses

The General Chronology

The MM Contract with MOL

MCL's Contract with MPS

Rowen's Sub-Contract with MCL

The Law relating to negligence

The Pile Bracing issue-History

The Pile Bracing issue-Decision

The Liability of Rowen

Hospital Façade issue-History

The Hospital Façade Issue-Decision

Contributory Negligence

Quantum Issues

Conclusion and Determination

General Description of the Works and Terms Used

The site for the development had a 6 metre fall from the south to the north. There had to be substantial deep excavations, following demolition of the old buildings and structures on the site and piling. The perimeter retaining walls were constructed using secant piling carried out by AMEC Civil Engineering Ltd (“AMEC”) and designed by Gibb Ltd (“Gibb”); secant piling involves the provision of regularly spaced “soft” concrete piles with harder reinforced concrete piles located between them, the object being that a continuous wall is created with the softer piles acting as a type of plug preventing water and soil passing between the harder piles. After the piling was installed, excavation within the retaining walls was to be done.

It can be appreciated that in many places, but not everywhere, the perimeter retaining walls were of considerable height, being some 12 metres above the basement floor slab. It follows from this that there will have been pressures from the ground being retained by the piled walls and the groundwater within it that would bear upon these walls during and after the excavation which would need to be restrained and accommodated both temporarily and permanently. These loads are horizontal loads and have been called “prop forces” in this case; sometimes they were and are also referred to as the “horizontal” or “retaining” wall forces or loads.

In buildings, prop forces from retaining walls may and should as appropriate be restrained by the floors on a permanent basis by:

(a) “Strut action”: this is the mechanism whereby the prop forces can be resisted by a floor structure acting in compression against a piled wall on the opposite side of the development. In a simple rectangular arrangement between walls of similar height, these forces on one wall are resisted through the floor itself by the opposing and opposite wall.

(b) “Diaphragm action”: this is the mechanism whereby, where there are walls at right angles to each other, the prop forces from each wall may be resisted by a floor structure which transfers the forces diagonally from one wall to the other. This is the expression used by some to describe this mechanism which I will adopt. A diaphragm is in engineering terms a stiff plate and horizontal forces through the diaphragm are often but not always transferred to the wall at right angles from...