Martifer Uk Limited Against Lend Lease Construction (emea) Limited
| Jurisdiction | Scotland |
| Judge | Lord Tyre |
| Neutral Citation | [2016] CSOH 98 |
| Court | Court of Session |
| Docket Number | CA147/14 |
| Published date | 07 July 2016 |
| Date | 07 July 2016 |
| Year | 2016 |
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 98
CA147/14
OPINION OF LORD TYRE
In the cause
MARTIFER UK LIMITED
Pursuer;
against
LEND LEASE CONSTRUCTION (EMEA) LIMITED
Defender:
Pursuer: Bowen QC, Broome; Wright Johnston & Mackenzie LLP
Defender: Murphy QC; Pinsent Masons LLP
7 July 2016
Introduction
[1] The defender in this action was the main contractor for the construction of the SSE Hydro building in Glasgow. The pursuer was engaged by the defender as sub‑contractor for work packages consisting, in general terms, of the structural steelwork, roof steelwork and roof cladding. The present action has been raised to obtain a judicial determination of a number of issues in connection with claims by the pursuer for additional payments under the sub‑contract and for extension of time. This is the third opinion I have delivered in the action, having addressed other issues in my opinions dated 19 June 2015 and 6 May 2016, published at [2015] CSOH 81 and [2016] CSOH 66 respectively. The present opinion is concerned with three matters on which a diet of proof before answer was allowed.
[2] The proof was heard over seven days commencing on 26 April 2016. Subject to my observations below regarding the pursuer’s operations director, Mr Hugo Camacho, I found all of the witnesses who gave evidence on factual matters to be credible and reliable. Expert evidence was given on behalf of the pursuer by Mrs Lucy Osborne, a chartered civil engineer with experience of management of structural design teams and processes and, on behalf of the defender, by Mr Matthew Davis, a chartered civil and structural engineer with similarly extensive design and investigatory experience. Both expert witnesses were well qualified to express opinions on the technical questions with which this case is concerned; however, a number of the issues upon which they expressed views were properly matters for the court.
[3] In my opinion dated 19 June 2015, I described the construction process, in so far as material to the pursuer’s sub‑contract works, as follows:
“Those sub‑contract works consisted of five elements: main steelwork, bank roof steelwork, main roof steelwork, main roof covering, and lighting gantry. The main steelwork consisted of the structural steel columns of the main walls. An important feature of the construction sequence was that the steel columns were not erected from bottom to top at one time, but rather level by level. Concrete fin walls were poured to a certain level and the pursuer then erected its steel columns to the same level. After the construction of decking at that level, the sequence of concrete followed by steel columns was repeated to the next level, and so on. This process was not, however, carried out for the whole building at once. Instead, the ellipse was divided into 12 sectors, and the level by level sequence that I have already described was carried out sector by sector. Due to the design of the building, the sectors were of differing heights, and consequently there were large variations in the sizes of the structural steel members. Within each sector, and at each level, progress with the pursuer’s steelworks depended upon completion of the immediately preceding concrete works, and vice versa.
The sequence of construction of the main roof steelwork was similarly divided into segments, albeit 16 instead of the 12 external wall sectors. In the centre of the roof was a circular steelwork structure held temporarily in place by a vertical propping tower. Each segment of the roof steelwork was built out from the top of the external wall to join the circular central section. Commencement of construction of each segment of the main roof steelwork was dependent upon completion of construction of the concrete and steelwork of the sector of the external wall from which it was built out. Once the segments of roof steelwork had been connected to the circular central structure, the central support trestle was removed. “
An important feature of the building is that the external wall increases in height towards the rear of the auditorium, with the consequence that the domed roof is set at an angle to the ground. The roof is circular in the plane of the ring beam that runs around the circumference of the dome.
The sub-contract agreement
[4] The sub‑contract agreement was executed on behalf of the pursuer on or about 18 March 2011 (the copy lodged in court does not bear a date of signature) and on behalf of the defender on 8 June 2011. The pursuer’s sub‑contract was for WP (ie work package) 2400 consisting of structural steelwork including metal decking and roofing. The sub‑contract agreement incorporated the conditions of the GC/Works Sub‑Contract as amended by conditions set out in part 2 of a schedule to the sub‑contract agreement. Article 1.5 of the sub‑contract agreement provided as follows:
“The Sub-Contract Works shall be completed in accordance with and the rights and duties of the Contractor and the Sub-Contractor shall be regulated by:
1.5.1 The Abstract of Particulars annexed in Part One of the Schedule and signed as relative hereto;
1.5.2 The Sub-Contract Conditions as amended by the conditions annexed in Part Two of the Schedule and signed as relative hereto;
1.5.3 The Sub-Contract Documents listed in Part Three of the Schedule
all of which are held to be incorporated in and form part of the Sub-Contract.”
I refer below to certain sub‑contract conditions and documents relevant to particular issues addressed during the proof; in addition, there are conditions of more general relevance to the question whether a particular direction has resulted in a variation, as follows.
[5] Clause 1.3 of the GC/Works Sub‑Contract conditions contained definitions. These include the following definition of a Variation:
“any alteration or addition to or omission from the Sub-Contract Works or any change in the design, quality or quantity of the Sub-Contract Works which is required by a direction of the Contractor issued under the Sub-Contract.”
[6] Clause 4.3.1 stated:
“The Contractor may issue any reasonable direction in writing to the Sub-Contractor in regard to the Sub-Contract Works (including the ordering of any Variation therein).
[7] Clause 13.3.1 stated:
“Where as a result of a direction of the Contractor, not being a direction requiring a Variation, the Sub-Contractor:
-
properly and directly incurs any expense beyond that provided for in, or reasonably contemplated by the Sub-Contract; or
- makes any saving in the cost of executing the Sub-Contract Works,
the Sub-Contract Sum shall, except where the direction was necessary because of any default or neglect by the Sub-Contractor be increased by the amount of the expense, or decreased by the amount of the saving in either case as determined by the Contractor.”
Issue 1: ETFE secondary support system
[8] The façade of the Hydro consists of pillow cladding made from ethylene tetrafluoroethylene (ETFE) in an aluminium frame. The pillow cladding is supported by a secondary steel support structure which is attached in turn to the main steelwork and concrete frame of the building. Design of both the ETFE cladding system and the secondary steel support structure was sub‑contracted by the defender to Novum Structures UK Limited (“Novum”). The pursuer was responsible for the fabrication, delivery and installation of the secondary steel support structure. Problems arose during construction regarding (a) the alignment of the secondary steel support structure with the main frame of the building, and (b) the alignment of the ETFE cladding with the secondary steel support structure. Directions were issued to the pursuer, which now seeks declarator that each of these directions was a variation.
Sub-Contract Conditions
[9] It is necessary to begin by identifying the terms on which the sub‑contract was entered into, so far as material to the ETFE cladding support system. Prior to submission of its tender, the pursuer had received from the defender a set of drawings prepared by Arup, the project engineers, to provide an indication of the intended means of attachment of the cladding system to the frame of the building. One revision of these drawings (T2) dated 23 November 2009 was prepared for the purposes of the ETFE competitive dialogue process and was issued “for information”. A later revision (T7) dated 28 March 2010 was the contract tender issue. These two versions differed in that the T2 drawings showed all of the six circular horizontal hollow steel tubes attached to the concrete and steel frame, whereas T7 showed only one horizontal tube. It appears that the pursuer received both the T2 drawings and also the T7 tender drawings, but neither T2 nor T7 contained any detail to assist a tenderer for the fabrication of the secondary steel support structure other than the information that it would require to include circular hollow steel tubes to be attached to the main frame of the building. On 20 May 2010, Mr Alister Aitken, the defender’s commercial manager, sent an email to the pursuer’s Mr Miguel Garces attaching “the best information we have in respect of the ETFE cladding rails to allow you to provide a price”. This information consisted of a table received by the defender from Novum setting out in considerable detail the dimensions and weights of the various components of the secondary support system, including bracket tubes, bay tubes, verticals, bracket assemblies, tube end plates and “upstands”, ie brackets to be used for attachment of the ETFE cladding frame to the secondary support system. No drawing accompanied the table sent by Mr Aitken to Mr Garces.
[10] As well as tendering directly to the defender for fabrication and installation of the secondary support system, the pursuer also provided Novum with a price for supply of steelwork to enable Novum to submit a quotation to the defender for supply and installation of the entire...
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Variations
...Piles Ltd v Borough of St Pancras (1958) 14 BLr 80 at 98, per Edmund Davies J; Martifer UK Ltd v Lend Lease Construction (EMEA) Ltd [2016] CSOh 98 at [20]–[25], per Lord Tyre. If instructed work is already within the contractor’s scope of works, there will be no variation that may entitle t......