Linklaters Business Services v Sir Robert McAlpine Ltd and another (No 2)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE AKENHEAD |
| Judgment Date | 23 November 2010 |
| Neutral Citation | [2010] EWHC 2931 (TCC) |
| Docket Number | Claim Nos: HT-09399 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 23 November 2010 |
[2010] EWHC 2931 (TCC)
Before: MR JUSTICE AKENHEAD
Claim Nos: HT-09399
HT-1045, HT-1080
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Stephen Dennison QC and Mark Chennells (instructed by Linklaters) for the Claimant
Peter Fraser QC and Piers Stansfield (instructed by Glovers Solicitors LLP) for the First and Second Defendants
David Turner QC and Richard Liddell (instructed by Kennedys) for the Third and Fourth Parties
Richard Wilmot-Smith QC and Karim Ghaly (instructed by Clyde & Co) for the Fifth Party
Hearing date: 11–14, 18–21, 25–26 October 3 November 2010
Mr Justice Akenhead:
Introduction
Linklaters Business Services (“Linklaters”) is the service company of Linklaters LLP the well-known solicitors whose current address is One, Silk Street, London EC2 (“the Premises”). The litigation relates to those premises into which Linklaters moved as tenants on 25 year leases in late 1996 and, in particular, to widespread corrosion to steel chilled water pipes which served the air conditioning system throughout the Premises.
Sir Robert McAlpine Ltd (“McAlpine”) was the main contractor employed in 1995 by DS Developments Ltd (“Dev Sec”), the developer of the premises, to carry out the major redevelopment of the Premises, which comprised two buildings, Shire House and Milton House. McAlpine sub-contracted the mechanical and electrical works (which included the insulated chilled water pipework for the air conditioning systems) to How Engineering Services Ltd (“How”). How sub-sub-contracted the installation of the insulation works to Southern Installation (Medway) Ltd (“Southern”).
Following completion of the works in September 1996 and of subsequent fitting out works by other contractors on behalf of Linklaters, Linklaters moved into the buildings and have used them as their national and international headquarters ever since. The offices are and were intended to be used 24 hours a day seven days a week, albeit not necessarily by the same staff. There are some 1200 fee earners and numerous support staff.
In June 2006, there was a leak from one of the sets of chilled water riser pipes in the Premises which was traced to a leak at the fifth floor. This led to insulation being taken off and corrosion of pipes was discovered. Further investigations revealed extensive corrosion throughout the chilled water pipework, which in turn led Linklaters, on advice, to replace the corroded pipework throughout the building with new pipework.
Linklaters pursue their Claims in two sets of proceedings against McAlpine (HT-09–399) and How (HT-10–45) through a contractual route because McAlpine and How provided written contractual warranties to it in effect that they had carried out or would carry out their respective main and sub-contract obligations properly. Southern are pursued by How for damages for breach of a duty of care in tort owed to it in (HT-10–80) and for a contribution in relation to breach of a duty of care in tort owed to Linklaters by Southern (in the other proceedings). I have already decided that Southern owed a concurrent duty of care in tort to How (my judgement is reported at [2010] EWHC 1878 (TCC)). There are issues between the parties as to whether and if so to what extent there are breaches of contract or negligence, whether any cause of action in negligence against Southern is barred by limitation, whether any established breaches caused condensation which led to the corrosion and finally on quantum, including whether the decision to replace as opposed to repair was a necessary or reasonable course of action for Linklaters to take. McAlpine's and How's holding companies are joined as guarantors of their subsidiaries’ performance.
Apart from this Introduction, there will be the following Chapter headings in this judgement:
The Relevant People
Description of the Premises and the Chilled Water System
The History
The Contracts
The Employer's Requirements and Technical Requirements
Findings of fact (Liability and Causation of Corrosion)
The Law (Liability) and the Tort Issues
The Law (Quantum)
Findings of fact (Quantum)
The Relevant People
Those most closely associated with Linklaters, the original and the remedial works were:
(a) Bob Jones was Head of Operations from 1999 onwards and was in charge of managing Linklaters’ UK premises. He was heavily involved in the decision to replace the corroded pipework. Alastair Mitchell was the Chief Operating Officer for Linklaters in the UK since 2007 and was also involved in decisions about remedial works. Philip Rulton has been the Engineering Services Manager for Linklaters and his role was to monitor and manage Linklaters’ maintenance contractor, PME (see below) and otherwise manage various maintenance or other mechanical and electrical related works; previously he worked for PME from 1997 to 1999 and worked on the Premises. He was personally involved in dealing with the initial leak and various opening up works; he took various videos and made records of what he found when he opened up the insulation. Patrick Plant is a partner in Linklaters LLP and has been the “Global Head of Real Estate” who was ultimately involved, at a high level, in the decision relating to remedial works.
(b) Roger Chapman was a founding partner in the firm of Building Services consultants, Chapman Bathurst Partnership (“CBP”), and has been closely involved with Linklaters since the original works were done, through the fit out works and thereafter. He investigated the 2006 leak and was instrumental in advising Linklaters as to the appropriate course to take following the discovery of the corrosion. Mr Hazlehurst of CBP was involved in the original works as a clerk of works. Mr Solly was a senior facilities manager who did detailed inspections of the insulation and the pipework. Mr Upjohn is the managing director of CBP and was involved in part in advising Linklaters about remedial solutions and directly in the replacement works which were ultimately embarked upon.
(c) LBS’ maintenance contractor was Carillion Planned Maintenance, formerly Planned Maintenance Engineering (“PME”). Mr Lowe was the Account Manager for PME since 2002 and has worked for Linklaters since July 1998. From 2000 Mr T hornborrow worked at Linklaters becoming operations manager in 2005 and he was involved in tracing the leak which occurred in 2006. Mr Jones was the mechanical technician who personally traced the leak.
(d) Hoare Lea & Partners were consultant mechanical engineers retained by Dev Sec to design and supervise or monitor construction of the M&E work including the chilled water systems. Messrs Dow and Steer were the principals involved.
(e) Mr Drew Ford of McAlpine became involved from 2007 onwards in connection with inspecting various risers and pipes as well as considering maintenance. McAlpine also retained a consultant, Aecom in 2008; Mr Wilde of that firm took various photographs.
(f) Mr Cotterill of How was the director responsible for the M&E works at the Premises. Mr Payne was part of How's engineering team on the project and visited site at least from time to time. Mr Alexander was the project manager for How from September 1996 onwards.
(g) Mr Popplewell of Southern is the contracts director but was not directly involved with works back in 1995 or 1996. His father was involved. Mr Barnes was one of the laggers employed by Southern who was actually involved in fitting the insulation at the Premises.
(h) Voce Case (“Voce”) was a firm of consultant M&E engineers retained by the funders of the development during the Base Build and fit-out works.
(h) Mace was the fit out contractor.
(i) Gardiner & Theobald (“G&T”) were the quantity surveyors and project managers retained for the remedial works in the 2007–9 period; Mr Nicholson is a partner who did the bulk of the work in relation to the replacement works and supervised others who did the basic QS and cost planning work for the remedial scheme. Mr Povey was involved in the remedial works contract.
(j) Como was the main contractor for the replacement works carried out in 2008 and 2009 and the subcontractor which dealt with the chilled water pipe replacement works was MJ Lonsdale.
The Witnesses
Many of the above named people gave evidence or, if not required for cross-examination, provided witness statements which otherwise stood as evidence. In broad terms this is not a case in which it has been suggested that any witness of fact was deliberately seeking to mislead the court. I proceed upon the basis that the factual witnesses were honest. It is difficult to form a view about the reliability of witnesses who did not physically attend to give evidence but one just has to assess the strength of their evidence as best one can, albeit by reference to other live witnesses or the contemporaneous documents. Of the factual witnesses who gave evidence I have the following impressions (in the order in which they gave evidence):
(A) Mr Chapman was honest and decent. He gave his evidence in a straightforward way and was prepared to admit to confusion on occasions. He handled well and courteously cross-examination which went to issues as to his competence. I formed the view that he was eminently believable.
(B) Mr Rulton was honest and down-to-earth. He was competent in his work and was not seriously challenged on his evidence. Again, I found him to be credible.
(C) Mr Upjohn was straight and helpful. He made various concessions on quantum in an honest way.
(D) Mr Bob Jones was...
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