Jockey Club Racecourse Ltd v Willmott Dixon Construction Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edwards-Stuart |
| Judgment Date | 04 December 2016 |
| Neutral Citation | [2016] EWHC 167 (TCC) |
| Docket Number | Case No: HT-13-310 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 04 December 2016 |
[2016] EWHC 167 (TCC)
Mr Justice Edwards-Stuart
Case No: HT-13-310
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Geoffrey Brown (instructed by DAC Beachcroft) for the Claimant
Ms Anna Laney (instructed by Kennedys Law LLP) for the Defendant
Hearing dates: 18 th January 2016
This is a judgment following a case management hearing at which the Claimant made an application for indemnity costs following the Defendant's failure to accept a claimant's Part 36 offer made in a letter dated 30 January 2015. The offer was made in relation to the issue of liability only.
The dispute is about the design and construction of a new grandstand at the Epsom Race Course. The Defendant was engaged by the Claimant to design and construct it. Problems have since arisen with the roof. In high winds which, as is now accepted, were not unexpectedly high, the roof was damaged in two places near the perimeter in January 2012. This was incident No 1. Further damage occurred in high winds in October and December 2013 to another area of the roof. Again, the winds were high but not unexpectedly so. This was incident No 2. The roof is a proprietary system and is in effect a sealed structure. Accordingly, the details of its internal construction can only be seen if it is opened up.
Following both incidents the Claimant had to carry out repairs. The costs of these repairs, and consequential losses claimed by the Claimant as a result, are set out in Schedules A and B, respectively, to a draft Amended Particulars of Claim served on 30 January 2015. The offer was made at the same time.
During the period since incident No 1 the Claimant has carried out investigations into the cause of the failure. This investigation has involved experts in both engineering and materials science. It is probably fair to infer from the fact that an expert in materials science was required that the cause of the failures was not straightforward.
On 18 October 2012 a letter of claim was sent to the Defendant. This received no response. A claim form was issued the following year and Particulars of Claim were served on 18 September 2013, very shortly before incident No 2. The Defendant's solicitors were notified of the first stage of incident No 2 on 28 October 2013. The further damage which formed part of incident No 2 occurred between 23 and 27 December 2013. The Defendant was notified of it on 6 January 2014. The Defendant was invited by the Claimant to arrange for its expert to liaise with the expert for the Claimant if it wanted its expert to inspect the roof. A few days later, the Claimant's solicitors sent the Defendant's solicitors photographs of the damage that had been caused in October and December 2013. By an e-mail dated 3 February 2014 the Claimant's solicitors informed the Defendant's solicitors that investigations were on foot and suggesting that its expert might wish to visit the site in order to observe the situation and the work being carried out. In September 2014 the Claimant informed the Defendant that it appeared that the whole roof would have to be replaced.
There was no response to the offer that was made on 30 January 2015. As I have already mentioned the Particulars of Claim were subsequently amended. In fact, the Amended Particulars of Claim were not served in the terms of the draft that had been sent on 30 January 2015, but in a revised form that was served on 20 March 2015. To them were attached, not only Schedules A and B, but also a new Schedule C. This set out the cost of the total replacement of the roof which the Claimant says is now required, together with the Claimant's estimate of the consequential losses that will be incurred as a result of the need to carry out this work. The Amended Particulars of Claim, as finally served, included some amendments to the case on liability but I did not understand these to be sufficiently material to affect the issues that I now have to determine.
On 24 March 2015 there was a case management conference at which directions were given for a split trial. The preliminary issues which were to be the subject of the first trial were agreed and the court gave permission for expert evidence. These issues were concerned with liability. The experts were directed to meet by 25 September 2015. This date was subsequently put back to 16 October 2015.
In September 2015 there was further opening up of the roof and an inspection by the experts. At that stage the Defendant had not instructed an expert in materials science.
After some pressure from the Claimant's solicitors, on 14 October 2015 (two days before the experts were to have completed (their) discussions) the Defendant named its experts in materials science and remedial works as Dr Greenhalgh and Mr Hollings. However, two days later the Defendant's solicitors told the Claimant's solicitors that they would not be instructing Mr Hollings as their expert in remedial works, but would instead be instructing Mr Henderson. I was told, quite candidly, that it appeared that the commitments of the former would not permit him to carry out the necessary investigations within the timeframe required, and so Mr Henderson was instructed instead. This suggests that the Defendant's attempts to instruct experts were done in some haste.
On 22 October 2015 the Defendant's expert, Dr Greenhalgh, asked for an extension of time for service of the experts' joint statement. It seems that he received instructions to carry out investigations on 30 October 2015. The experts in remedial works and materials science produced their joint statements on 6 and 9 November 2015, respectively. However, at this stage it appeared that Dr Greenhalgh had still not completed his investigations although he had already reached some conclusions adverse to the Defendant.
A pre-trial review was fixed for 17 December 2015, by which the Defendant had conceded liability and the preliminary issues of liability were resolved by consent in the Claimant's favour.
At the hearing the Claimant was represented by Mr Geoffrey Brown, instructed by DAC Beachcroft, and the Defendant was represented by Miss Anna Laney, instructed by Kennedys.
The offer
The offer set out in the letter of 30 January 2015 was an offer to settle:
"The issue of liability for losses arising out of the defects in the roof … (including losses arising out of storm damage occurring in January 2012 and December 2013)"
on the basis that the Defendant would
"accept liability to pay 95% of our client's claim for damages to be assessed."
There was no response to the offer. It will be apparent from what I have already said that the 21 day period for acceptance of this offer expired several weeks before service of the Amended Particulars of Claim in their final form, which included, for the first time, the sums claimed in respect of the need to carry out a complete replacement of the roof.
This is not a case where there is any possibility of a reduction for contributory negligence. Either the Defendant is liable for the full extent of the Claimant's damages, as assessed or agreed, or it is not. Accordingly, a decision that the Defendant is to pay 95% of the Claimant's damages, as assessed or agreed, is not one that is open to the court. The offer, therefore, does not reflect a possible outcome, but is purely commercial. It is clear that the Claimant regarded liability as open and shut and the 5% discount probably represented a reduction that it is prepared to accept in order to achieve a certain and early outcome, rather than an assessment of the risk of losing. However, it could have been a combination of both: it probably does not matter. All that is, or may be, relevant is that the offer did not reflect an available outcome of the litigation.
The Defendant's response and subsequent events
The Defence, both in its original form and when amended, is notable for the absence of any positive case. Effectively, it is a litany of non-admissions. This is probably a reflection of reality, rather than a lack of willingness to engage in the litigation. The Defendant is a contractor and it may well have subcontracted the design, or at least part of it, to external consultants. Thus the Defendant may well not be in a position to assess for itself the merits of the Claimant's criticisms of the design of the roof. However, if this is the case, all the greater the need for the Defendant to instruct experts at an early stage to investigate and advise on the position.
For whatever reason, it is clear from the facts that I have already set out that the Defendant took its time to instruct appropriate experts and that, when it did so it seems to have done so in some haste. As I have already mentioned, the issues of liability were resolved by consent in the Claimant's favour. There is no question but that the Claimant was wholly successful.
In these circumstances the Claimant contends that it is entitled to the benefits that Part 36 confers on a claimant who has bettered its own Part 36 offer. The Defendant disagrees. It submits, first, that the Claimant did not make a valid offer within the meaning of Part 36; second, that the offer was made before the Claimant's claim had been fully pleaded; and, third, that since the offer was for 95% liability, the Claimant would only beat the offer if at least 95% of the roof required replacement.
The second and third of these points can be disposed of...
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