Greenwich Millennium Village Ltd v Essex Services Group Plc (formerly Known as Essex Electrical Group Ltd) (1st Defendant/Part 20 Claimant) Hs Environmental Services Ltd ((in Administration)) (3rd Party) W T Partnership Ltd (4th Party) Hoare Lea (A Firm)(5th Party/2nd Defendant) D G Robson Mechanical Services Ltd (6th Party)

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeThe Hon Mr Justice Coulson
Judgment Date25 October 2013
Neutral Citation[2013] EWHC 3059 (TCC)
Date25 October 2013
Docket NumberCase No: HT-12-116

[2013] EWHC 3059 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr. Justice Coulson

Case No: HT-12-116

Between:
Greenwich Millennium Village Limited
Claimant
and
Essex Services Group Plc (formerly Known as Essex Electrical Group Limited)
1st Defendant/Part 20 Claimant

and

Hs Environmental Services Limited (in administration)
3rd Party

and

W T Partnership Limited
4th Party

and

Hoare Lea (A Firm)
5th Party/2nd Defendant

and

D G Robson Mechanical Services Limited
6th Party

Mr Piers Stansfield QC (instructed by Greenwoods) for GMVL, the Claimant

Miss Fiona Sinclair QC (instructed by Kennedys) for Essex, the 1 st Defendant/Part 20 Claimant

Mr Alexander Hickey (instructed by Berrymans Lace Mawer) for Hoare Lea, the 2 nd Defendant/5 th Party

Mr Simon Hargreaves QC and Mr Karim Ghaly (instructed by Clyde & Co) for HSE, the 3 rd Party

Mr Roger ter Haar QC and Mr Alexander Macpherson (instructed by Fox Hartley) for Robson, the 6 th Party

Hearing dates: 2–4, 8, 10–12, 15–18, 29–30 July 2013

The Hon Mr Justice Coulson
1

INTRODUCTION

1

On 1 August 2007, water was seen cascading out of the balconies and down the sides of a block of flats known as Holly Court on the Greenwich peninsula, in South London. The water came from two of the cold water riser mains within the Cores of the building which were leaking as a result of two separate but related failures. The damage that was done was extensive, and the eventual cost of the remedial works and other losses has been agreed at £4.75 million.

2

At the time of its construction and the subsequent flooding, the owners of the building were the claimant, Greenwich Millennium Village Limited ("GMVL"). They paid for the remedial works and resolved the claims made against them by the leaseholders of the individual flats. They also made a successful claim on their property insurers. Accordingly, this is now a subrogated claim in which GMVL seek to recover the costs caused by the flooding against some of those who were responsible for the original design and construction of the building.

3

Although the original design and build contractor was Laing O'Rourke ("LOR"), and GMVL's original agents were WT Partnership ("WTP"), neither is the subject of the subrogated claim 1. Instead, GMVL pursue a claim against the mechanical and electrical sub-contractors, Essex Services Group PLC ("Essex") and the designers of the mechanical systems, Hoare Lea ("HL"). Those claims are pursued in reliance upon individual warranties provided to GMVL by Essex and HL respectively, although there are also alternative claims in negligence against both defendants. Essex pass on the claim against them pursuant to the mechanical sub-sub-contract that they entered into with HS Environmental Services Limited ("HSE") and HSE, in their turn, pass on the claim to the labour-only mechanical sub-sub-sub-contractor, D G Robson Mechanical Services Limited ("Robson"). Robson are the only one of the defendants and third parties who did not, on any view, have any sort of design obligation.

4

Accordingly, in many ways this is old-fashioned TCC litigation, involving five parties, with different defences and claims up and down the line, depending precisely on where the parties sit in the contractual chain. It is also old-fashioned litigation in another sense: many of the factual issues are surprisingly basic, such as 'who over-tightened the nut?' and 'who closed the isolation valve when it should have stayed open?' However, despite this retro feel, it should be said at the outset that the trial was crisply conducted by all counsel and the process was greatly assisted by clear and cogent expert evidence provided with the rigour required by the newly modified CPR Part 35.

5

There was a third (and less welcome) way in which the underlying facts of this case seemed redolent of another age. Skilful cross-examination revealed a situation, both on site and off, which was at times comically inept: important obligations were inadvertently muddled as they passed on down the contractual chain; warranties were provided in relation to contracts that were subsequently changed or services which

were never provided; and everyone was so intent on avoiding responsibility for anything meaningful that no single organisation had overall control of the design, installation, supervision, inspection, testing and acceptance of the boosted mains cold water system ("BMCWS"). To use a phrase common in the UK construction industry 20 years ago, it was death by sub-contracting.
6

This muddle resulted in pipework systems which, on completion, varied markedly from core to core, even though they should have been the same in each. Different valves could be found in different places on the risers where there was no logical distinction between the locations. Sometimes there was a valve in a particular place on the riser in one core, but no valve in the same place on the riser in the adjacent core. There was no proper paper trail dealing with the critical late addition of surge arrestors to the BMCWS which lies at the heart of this case, with the result that Robson, the labour-only plumber, was able to argue that it did not do the particular work now under scrutiny because there was no contemporaneous paperwork to suggest that it did. Most importantly of all, there was no specification or design drawing showing the detail of the surge arrestor installation, no record drawing showing what was actually installed; and no inspection report saying how and why that which had been installed was satisfactory. To crown it all, the Operating and Maintenance Manuals provided to GMVL did not refer to the critical surge arrestors (and their related components) at all. In those circumstances, it is perhaps less surprising than it might otherwise appear that the Millennium Village development was the subject of the catastrophic flooding on 1 August 2007.

2

THE ISSUES

7

There were two separate flooding incidents on 1 August 200The first occurred in Core 3, Level 2, when an isolation valve ("IV") on a riser branch failed. The precise element which failed was the nut that connected the downstream pipework to the downstream part of the IV. It is agreed by GMVL and Essex (although this view was not universal), that the cause of the first flood in Core 3 was due to this plastic nut being over-tightened, and the presence of debris in the thread. The over-tightening was evidenced by tool marks, probably made by metal wrenches called Stilsons, which should not have been used on the plastic nut.

8

GMVL allege that Essex over-tightened the nut prior to handover in August 2006, and was therefore responsible for the damage which led to the first flood. Essex deny liability, suggesting (principally through Robson) that the nut was over-tightened as part of GMVL's maintenance work in the period of almost a year after the handover and before the flooding.

9

The claim in respect of Core 3 is passed on by Essex to HSE who, in turn, pass it onto Robson. HL are not involved in the Core 3 claim at all, either by reference to their design or their periodic inspections. Robson deny that any of their men would have over-tightened the nut using tools, and conclude therefore that the nut must have been over-tightened after completion. They also maintain that the debris was too small to have been capable of being realistically excluded from the thread.

10

As a consequence of the flood in Core 3, the water tanks (which served both Core 3 and Core 2) emptied. The water in the riser in Core 2 therefore drained down. Once the system equalised, and water began to come back up the riser in Core 2, there was a separate problem. The riser had been fitted with a surge arrestor at the top of the riser, a kind of valve which allowed air to get into the riser and prevent a vacuum from being created if the water level fell. But below the surge arrestor in Core 2 was both a non-return valve ("NRV") and, a little further down the riser, an isolation valve ("IV"). The NRV, which was closest to the surge arrestor, prevented it from working because it stopped the air from getting into the riser to prevent a surge in water pressure. In addition, if the IV was closed on 1 August 2007, that also prevented the surge arrestor from working, again because it also stopped the air getting into the top of the riser.

11

In this way, a vacuum was created at the top of the riser when the water level fell, so that when the water came back up the riser, there was a vacuum at the top, and no air cushion to slow down the velocity of the rising water. As a result there was a 'water hammer' event: the renewed water surge put pressure on the pipework that it was not designed to withstand. Pressure caused a breach in the riser on the sixth floor (the weakest point and not otherwise significant) and was the cause of the catastrophic Core 2 flooding.

12

The principal issue in this case concerns causation. After significant changes of case by a number of the parties, the final position was this. Robson and Essex both submitted that the sole or primary cause of the flooding was the closed IV. HL and HSE argued that the sole or primary cause of the flooding was the NRV, although both they and Essex advanced a secondary case that both the NRV and the IV were effective causes of the flooding. GMVL have always maintained a case that both the NRV and the IV were the causes of the flooding, although some matters of emphasis in the presentation of that case changed during the trial.

13

Unsurprisingly perhaps, the parties have adopted different cases on causation because of their potential liability for these different causes. Thus, if the NRV was the sole/primary cause of the flooding then Essex admits that the NRV...

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