Investors in Industry Commercial Properties Ltd v South Bedfordshire District Council

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date20 December 1985
Judgment citation (vLex)[1985] EWCA Civ J1220-7
Docket Number85/0883

[1985] EWCA Civ J1220-7





(His Honour Judge Sir William Stabb)

Royal Courts of Justice


Lord Justice Slade

Lord Justice Robert Goff


Sir John Megaw


Investors in Industry Commercial Properties Limited (Formerly Anglia Commercial Properties Limited)
Respondent (Plaintiff)
The District Council of South Bedfordshire
Appellant (Defendant)


Ellison and Partners (A Firm)
(First Third Party)


Hamilton Associates (A Firm)
Respondent (Second Third Party)

MR. STANLEY E. BRODIE, QC. and MR. ANDREW C. PUGH (instructed by Messrs Hunt & Hunt, Romford) appeared on behalf of the Respondent (Plaintiff).

MR. PIERS ASHWORTH, QC. and MR. ADRIAN J.N. BRUNNER (instructed by Messrs Barlow Lyde & Gilbert) appeared on behalf of the Appe11ant (Defendant).

MR. STEPHEN C. DESCH, QC. and MR. HARRY de LOTBINIERE (instructed by Messrs Hextall Erskine & Co.) appeared on behalf of the Respondent (Second Third Party).


This is the judgment of the Court on an appeal by the District Council of South Bedfordshire from a judgment of His Honour Judge Sir William Stabb QC., sitting as an Official Referee, delivered on 5th April 1984. In reaching his decision he followed the decision in Acrecrest Ltd. v. W.S. Hattrell & Partners [1983] Q.B.260 (" Acrecrest") in which this court had purported to apply the decision of the House of Lords in Anns v. Merton London Borough Council [1978] A.C. 728 ("Anns"). Later in 1984, however, Acrecrest was overruled by the House of Lords in Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson Ltd. [1985] A.C.210 (" Peabody").


This appeal raises important and difficult questions as to the frontiers of the principle of Anns, particularly having regard to the later decision in Peabody.


The appellants are the successors to the Leighton Linsdale Urban District Council. No differentiation falls to be drawn between either of these bodies for the purposes of this appeal and we shall use the expression "the Council" to refer to either or both of them. The plaintiffs in the proceedings ("Anglia") are property developers, who were formerly called Anglia Commercial Properties Ltd. and are now called Investors In Industry Commercial Properties Ltd.


In the action Anglia claimed damages for negligence or breach of statutory duty under the Public Health Acts 1936 and 1961 against the Council, as the responsible local authority, in connection with the approval of the plans for and the inspection of the foundations of four warehouses, which had been erected for Anglia as developers, on a site known as The Spinney Pool Estate, Billington Road, Leighton Buzzard, Bedfordshire. In addition to Anglia there were also concerned in this building project, for at least part of the material time, Messrs Hamilton Associates as architects and Messrs. Ellison & Partners ("Ellisons") as structural engineers.


Anglia's claim arose out of the rapid disintegration and subsequent demolition of two of the four warehouses after they had been built, due to what the learned judge fairly described as "the totally inadequate design" of the foundations, in the light of the nature of the ground on which the warehouses had been erected. Though the Council formally denied any negligence or breach of their statutory duties, the learned judge concluded that "they woefully failed to discharge the responsibilities imposed upon them by statute".


Having served their defence in the action, the Council joined Ellisons as First Third Party and Hamilton Associates as Second Third Party claiming against them, in the event of the Council being held liable to Anglia, an indemnity against Anglia's claim on the grounds that such loss and damage (if any) as Anglia might prove had been caused by the negligence of the two Third Parties or their respective servants or agents.


Though the learned judge at the trial found that Ellisons were "clearly at fault", the proceedings against them had been discontinued before the trial, because they were uninsured. He was told that they had made a contribution towards Anglia's costs. By his judgment he ordered that the defendants should pay to Anglia damages to be assessed. He also gave judgment for Hamilton Associates against the Council and ordered that the Council should pay the costs of Anglia and of Hamilton Associates.


The Council now appeal from the whole of this judgment. By their notice of appeal they seek an order that judgment may be entered for the Council, or alternatively, that Anglia may be found contributorily negligent, the proportion contended for being 80%. Further or alternatively, they seek judgment against Hamilton Associates in the Third Party proceedings.


The learned judge did not have the advantage of hearing any evidence from witnesses as to the facts, the oral evidence adduced being confined to evidence from expert witnesses. He was therefore obliged to reach his conclusions as to fact from contemporaneous correspondence and documents. These conclusions he set out in a full and careful judgment.


Events up to September 1973


The site in question, the Spinney Pool Estate, which is about six acres, had formerly contained an exceptionally large pool used for swimming. In 1972 the site was acquired by a haulage contractor, Mr. Pentus Brown. He applied for permission to tip soil, hardcore and other innocuous material at the site. In April 1972 he applied for planning permission to erect a so-called "transit building" on it. Hamilton Associates, who had by that time been engaged as architects on his behalf, lodged this application. In a letter of 25th April 1972 to the building contractors then employed in connection with this project, they expressed their belief that "it may well be necessary for you to incorporate piled foundations". Since this was a filled-in site their anxiety at that time in relation to the proposed foundations was well justified. As is stated in Clause 2.2.11 of the British Standard Code of Practice for Foundations CP2004: 1972 ("the Civil Engineering Code of Practice"):

"Before foundations are designed and a method of construction determined, it is desirable to carry out a site exploration—to ascertain the character and variability of the soil strata underlying the site of the proposed structure….."


Clause states:

"All made ground should be treated as suspect, because of the likelihood of extreme variability. Any proposal to found a structure on made ground should be investigated with extreme care….. Loading tests may be completely misleading….


As appears from Clause, trial pits have certain advantages for the purposes of examination to fairly shallow depths but where the ground is unsuitable for trial pits, or deeper exploration is needed, bore holes are required. The evidence shows that in the building trade there is a well recognised difference between trial pits and bore holes, which can go much deeper than trial pits and can provide a greater range of undisturbed samples.


On 27th April 1972, Hamilton Associates wrote to the contractors suggesting that they should write direct to their consulting engineers, Messrs Conner & Heath ("Conners") instructing them to prepare details and calculations of the foundations for the transit building. It appears from this letter that a filling and levelling operation on the site was in progress or in contemplation.


By June 1972 Anglia had become interested in purchasing the site, which by then had planning permission both for tipping and for the transit building and at least an indication from the Council that permission would be granted for the erection of four warehouses. On 19th August 1972 contracts providing for the purchase of the site by Anglia were exchanged. It was contemplated that Anglia would complete the construction of the transit building and then lease it back to Mr. Brown. At the same time Anglia inherited Hamilton Associates as their architects.


The learned judge found as facts that by this time

  • (1) both Anglia and Hamilton Associates knew that levelling and refilling of the site was going on;

  • (2) the Council must also have known of this because they had given the permission for tipping and, as the local authority, must have known something of the history of the site.


Meantime, on 7th July 1972 Conners had sent to Hamilton Associates a foundation plan for the erection of the transit building. On 10th August 1972 the Council gave Building Regulation approval for this project. In October 1972 the site was conveyed to Anglia. Thereafter plans began to be prepared for the erection of the four warehouses.


On 13th December 1972 a revised planning application was submitted seeking permission to erect the transit building on the site. On 14th December 1972 a letter was written to Ellisons on behalf of Francis Parker Contracts Ltd. ("Parkers"), who were the main contractors for this project, giving them instructions as consulting engineers in this connection. This was Ellisons' first involvement with the site.


On 2nd January 1973 a site meeting was held at which were present representatives of the Council, Hamilton Associates, Ellisons, Parkers and Peter Lind Ltd., the sub-contractors of Parkers. The object of the meeting was stated to be "to inspect trial holes" in the vicinity of the proposed transit building and to discuss foundation proposals. Notes of the meeting record that satisfactory bottoms were reached at depths of 6 feet, 12 feet and 16 feet in three pairs of trial pits. We infer that these trial pits may well have been made in the region of what had...

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