Lincolnshire County Council v (1) Mouchel Business Services Ltd (1st Defendant) (2) R.G. Carter Building Services Ltd (2nd Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 21 February 2014 |
| Neutral Citation | [2014] EWHC 352 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 21 February 2014 |
| Docket Number | Case No: HT–13–259 |
[2014] EWHC 352 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Stuart-Smith
Case No: HT–13–259
and
James Leabeater (instructed by Lincolnshire Legal Services) for the Claimant
Lynne McCafferty (instructed by Beale and Company LLP) for the 1st Defendant
Hearing dates: 13 February 2014
Introduction
Where a party issues protective proceedings hard up against the expiry of the limitation period, it is expected to pursue those proceedings promptly and effectively; and if it subsequently seeks and obtains orders extending time for the service of the Claim Form or Particulars of Claim without notice to the other party, it dices with procedural death. These simple propositions should be known to all professionals conducting litigation. They were established long before the recent reforms of the Civil Procedure Rules.
The First Defendant ["Mouchel"] applies to set aside the order of Edwards-Stuart J made on 15 January 2014 on the Claimant's application without notice for an extension of time for service of the Claim Form and Particulars of Claim. The application had been issued on 23 December 2013. Edwards-Stuart J extended time to 18 April 2014 and gave Mouchel permission to apply to vary or discharge his order. His order was the second occasion on which the Claimant ["Lincolnshire"] had obtained an extension of time for service of the Claim Form and Particulars of Claim. Having issued these proceedings on 19 July 2013, Lincolnshire promptly sought and obtained an extension of time for service (without notice to Mouchel) to 18 January 2013. That order was made by Akenhead J on 23 July 2013. It may therefore be seen that the combined effect of the orders of Akenhead J and Edwards-Stuart J has been to extend time for service of the Claim Form and Particulars of Claim by five months.
Mouchel's application is supported by evidence from Mr Charles Aitchison, a solicitor at Beale & Co. Lincolnshire relies upon two witness statements from Mr Jeremy Hanley, the in-house solicitor having conduct of the matter for Lincolnshire, and one from Mr Michael Watson, an employee of Lincolnshire.
The Factual Background
Mouchel is an architect. It is alleged that Lincolnshire outsourced architectural services to Mouchel by a contract executed by way of deed on or about 3 April 2000. Later in 2000 Lincolnshire wanted to procure the extension of a science block at Boston Grammar School, which was then a school under Lincolnshire's control as local education authority. The School is now an academy but Lincolnshire has retained the right to bring these proceedings. Lincolnshire alleges that Mouchel carried out the design of the building. The works were carried out by a building contractor which is now the second Defendant ["the Contractors"].
The building works started on site in about May 2001. About a year after construction was finished it became apparent that the building had problems with rising damp. The exact date on which this became apparent is not clear, but practical completion was achieved on 28 March 2002, which indicates that it was in about March 2003. The Protocol Letter sent by Lincolnshire to Mouchel on 3 December 2013 alleges various problems including a failure to seal sheets of the damp proof membrane together or to the damp proof course, the failure to implement a suitable slope away from the outside of the building, and a failure to incorporate a "step" or "toe" in the design of the concrete raft to prevent water pooling on top of the concrete slab.
Three points may immediately be noticed:
i) Although the Protocol letter alleges failures of inspection and supervision, the Claim Form advances a claim in respect of failure of design but no express claim in respect of failures of inspection or supervision;
ii) Neither the Protocol letter nor the Claim Form identifies when Mouchel prepared its design of the relevant parts of the structure; however
iii) Since the defects are all related to the ground slab, with the possible exception of landscaping, it is probable that the design would have been completed and implemented relatively early on in the construction process. All that is known is that works started on site in May 2001 and were practically complete in March 2002. This strongly suggests that the floor slab works would have been carried out well before the end of 2001. The implications of these dates for limitation when proceedings are issued in July 2013 and not served within the four months prescribed by the rules are obvious.
Returning to the chronology, correspondence between the parties about the defects started in 2009 or, at the latest, early 2010. By May 2010 Mouchel had carried out a preliminary investigation with the Contractors and had written to the School identifying four factors which could have contributed to the damp in the building. These factors were that the building was low lying; the foundations were designed as a very shallow slab/raft on piles to avoid disturbance of the ground below; the finished floor level at thresholds were level with external ground level; and poor maintenance and housekeeping. Correspondence between the parties about the damage continued throughout 2010 and 2011. By April 2011 the Governors of the School had asked Mouchel and the Contractors to accept responsibility for the defective damp proof membrane and for all subsequent remedial works but that acceptance was not forthcoming from either party.
Lincolnshire instructed its Legal Services Department ["LSL"] in August 2012. In December 2012 and February 2013 expert consulting engineers instructed on behalf of Lincolnshire undertook intrusive investigations and reported on the causes of the damp. The February 2013 report concluded that Mouchel's design was "fundamentally flawed".
In July 2013 Mr Hanley took over from the colleague who had been handling the matter until then. He appreciated the danger of limitation problems and arranged for the issue of proceedings against Mouchel and the Contractors on 19 July 2013. He also issued the application which requested an extension of time for service to 18 January 2014 but no other directions. The application was said to be brought under section 2.3.2 of the TCC Guide. In support of the application it was said that Lincolnshire had not complied with the relevant pre-action Protocol before issuing proceedings and that Lincolnshire "is desirable of completing the steps set out [in] the Protocol. Accordingly, the Claimant submits that an extension of time for service of the Claim Form and Particulars of Claim is necessary to enable the parties to take the steps set out in the Protocol. As the parties will need to inspect the works as part of the Protocol steps, it is anticipated that the steps to be taken under the Protocol will take up to 6 months to complete." LSL did not give notice of the application to the Defendants.
On 23 July 2013 Akenhead J granted the extension, ordering that "the time for service of the Claim Form and Particulars of Claim be extended to 18 January 2014 to enable the parties to comply with the Protocol for Construction and Engineering Disputes." The order thus had two constituent parts: proceedings had to be served by 18 January 2014 and Protocol was to be complied with by then.
Two things should have been obvious to Lincolnshire. First, it was not entirely in its hands whether the Protocol would be complied with, since it applied to the Defendants too. Second, and more importantly, having set the timetable itself, it was imperative that Lincolnshire should act promptly if it was to be in a position to serve the proceedings having complied with the Protocol on or before 18 January 2014 1.
The need for prompt action is demonstrated by considering when the protocol steps would have to be carried out in order to meet that deadline. Working backwards, the Protocol envisages a pre-action meeting for the parties to agree the main issues in the case and to resolve the dispute without resort to litigation if possible. That meeting is to take place within 28 days after receipt of a Defendant's letter of response. Assuming that the meeting would have to take place about a week before 18 January if it was to serve its purpose and still allow time to serve proceedings if necessary, it would be necessary for the letter of response to be received by about 14 December 2013. The Defendant has 28 days in which to respond to the letter of claim, which means that the letter of claim was required to be sent by about 16 November 2013.
What in fact happened was that Lincolnshire did not issue its letter of claim until 3 December 2013, four and a half months into the period allowed by Akenhead J's order. On the evidence, LSL took no effective steps to progress its claim or the protocol procedure between 19 July and mid-September 2013. Mr Hanley's explanation for this is that it took him some time to get to grips with the papers in order to provide detailed instructions to an expert and that between July and September he had two weeks annual leave and had to cover for other members of his team who had annual leave during that period.
Mouchel inspected the science block on 2 September 2013 without experts being in attendance. Early on 11 September 2013 Mouchel emailed Lincolnshire asking for convenient dates for them to attend site with a contractor. Lincolnshire had not carried out any further expert inspection of its own since 18 July 2013; nor had it suggested any joint inspection. It was in possession of the two...
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