Martlet Homes Ltd v Mulalley & Company Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Pepperall |
| Judgment Date | 16 February 2021 |
| Neutral Citation | [2021] EWHC 296 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000452 |
| Date | 16 February 2021 |
[2021] EWHC 296 (TCC)
THE HONOURABLE Mr Justice Pepperall
Case No: HT-2019-000452
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Rolls Building
Fetter Lane, London EC4A 1NL
Jonathan Selby QC (instructed by Norton Rose Fulbright LLP) for the Claimant
Simon Hughes QC (instructed by Pinsent Mason LLP) for the Defendant
Hearing date: 5 February 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Martlet Homes Limited owns five high rise towers in Hampshire. By a design and build contract dated 20 January 2005 entered into between the then owners of the towers and Mulalley & Company Limited, Mulalley agreed to design and undertake various refurbishment works for a total price of £14,867,818. Such works included the design and installation of external cladding. Practical completion was achieved in respect of the works to the various tower blocks between 5 December 2006 and 7 April 2008.
Martlet issued these proceedings against Mulalley on 11 December 2019 seeking damages for alleged negligence and breach of contract in the design and construction of the refurbishment works. Since the building contract had been entered into by way of deed, such claim was brought a matter of days before the expiry of the twelve-year limitation period in respect of the works at Hammond Court and Blake Court and less than four months before the expiry of the limitation period in respect of the works at Harbour Tower and Seaward Tower. It is common ground that any claim in respect of the works at the fifth tower block, Garland Court, was already statute barred.
The claim form was served together with Particulars of Claim on 9 April 2020, which, being Maundy Thursday, was the very last working day on which proceedings could be served within the four months allowed by r.7.5 of the Civil Procedure Rules 1998. By then, there was no possibility of a fresh action in respect of any of the towers since more than twelve years had elapsed from the latest of the dates of practical completion. The Particulars of Claim alleged that Mulalley was in breach of the design and build contract in respect of various defects in the fire barriers; a failure properly to fix the insulation boards to the external walls; and a failure properly to repair the existing substrate. Martlet claimed damages of around £8 million comprising the cost of remedial works and of a “waking watch” that had had to be provided in each tower pending the completion of such works.
Mulalley served a full Defence on 4 June 2020. It admitted a number of breaches of contract while putting Martlet to proof of other allegations. It denied, however, that the alleged breaches of contract had caused any loss because it argued that, following the tragic fire at Grenfell Tower in June 2017, Martlet was in any event required to replace the combustible expanded polystyrene (“EPS”) cladding fitted to the towers. Martlet served a Reply on 9 July 2020. While it joined issue with the causation defence, it pleaded at paragraphs 80 to 83 of its Reply that, even if Mulalley were right as to causation, it would remain liable because Mulalley was in breach of contract in using combustible EPS insulation boards in cladding the towers.
Mulalley now seeks to strike out paragraphs 80 to 83 of the Reply on the basis that Martlet cannot raise a new claim by way of a Reply. Martlet resists such order but, in the alternative, seeks permission to amend its Particulars of Claim to plead out its EPS case. Mulalley argues that the court should refuse permission to amend since this is an attempt to plead a new claim based on new facts after the expiry of the limitation period.
THE CLADDING SYSTEM
In order to make sense of the parties' cases, it is first necessary briefly to describe the cladding system installed by Mulalley. The system comprised 80mm EPS insulation boards which were fixed to the external walls with adhesive. The outer faces of the boards were treated with a reinforcing coat into which a glass fibre reinforcing mesh was embedded. The mesh was then rendered to give the final finish. At every level above the third storey, a horizontal firebreak was installed. This was mostly by installation of a 200mm layer of non-combustible lamella insulation boards extending the full 80mm thickness of the EPS boards. In places, rockwool insulation was used in place of lamella boards.
THE STATEMENTS OF CASE
THE ORIGINAL PARTICULARS OF CLAIM
The original allegations of breach of contract were pleaded at paragraphs 41–42 of the Particulars of Claim. There were three broad allegations of defective design or workmanship:
7.1 Fire barrier defects: Martlet alleged that the fire barriers were defectively installed in that:
a) they were fixed to the wall substrate using a “dot and dab” method of adhesion rather than a continuous band of adhesive, thereby leaving gaps between the substrate and the fire barriers of between 20mm and 40mm;
b) in places, there were vertical gaps between adjacent fire barriers of up to 15mm;
c) they were fixed with inadequate 110mm dowels (whereas 180mm dowels should have been used to penetrate the thickness of the insulation (80mm), the adhesive, the original external render and gain adequate purchase into the substrate);
d) the heads of the dowels were of insufficient diameter to provide adequate resistance in order to prevent the fixings from being pulled out of the fire barriers (the dowels were 35mm in diameter and fitted without a washer, whereas the use of an 80mm washer would have increased the surface area of the fixings and provided greater pull resistance); and
e) insufficient dowels were used in that they were not positioned at a maximum of 300mm centres along the fire barriers.
7.2 Insulation defects: Martlet alleged that the insulation boards were not properly fixed to the walls in that:
a) the adhesive was applied in dabs with no “sausage” around the edge of each board; and
b) the boards were fixed with inadequate 110mm dowels (whereas again 180mm dowels should have been used).
7.3 Substrate defects: Martlet alleged that Mulalley failed properly to repair the underlying substrate and fill existing penetrations and vents.
Martlet pleaded that as a result of the fire barrier defects, their effectiveness would be compromised in the event of fire spreading to the cladding system. First, the gaps between the fire barriers and the substrate, and the vertical gaps between adjacent fire barriers, would allow fire and smoke to bridge the fire barriers. Secondly, the use of inadequate dowels compromised the ability of the fire barriers to remain fixed to the walls in the event of fire or high winds. Accordingly, Martlet pleaded that, in breach of regulation 4 of the Building Regulations 2000, the works were not carried out so as to comply with requirements B3(4) and B4(1) of Schedule 1 to the regulations. Such requirements provided:
“B3(4) The building shall be designed and constructed so that the unseen spread of fire and smoke within concealed spaces in its structure and fabric is inhibited …
B4(1) The external walls of the building shall adequately resist the spread of fire over the walls and from one building to another, having regard to the height, use and position of the building.”
The fire barrier and insulation defects were pleaded as breaches of Mulalley's obligations in respect of both workmanship and design. Thus, if the workmen were following Mulalley's design in using adhesive as alleged and 110mm dowels without washers then Martlet contended that the works were not designed with reasonable skill and care.
THE DEFENCE
By its Defence, Mulalley denied any design breach but made a number of admissions of defective workmanship. Specifically, it admitted at paragraphs 38–42 of the Defence that:
10.1 the “dot and dab” application of adhesives to the firebreaks did not comply with requirements B3(4) and B4(1);
10.2 there were at least two vertical gaps in the firebreaks whereas there should have been none;
10.3 the firebreaks and insulation boards should have been secured with 180mm dowels and 80mm washers; and
10.4 such admitted defects compromised the effectiveness of the fire barriers.
No admissions were made as to other alleged vertical gaps in the fire barriers, the spacing between dowels or that the dowels used compromised the stability of the fire barriers in the event of fire or high winds. Further, Mulalley denied that the alleged breaches of contract caused the claimed loss and damage:
11.1 As to the waking watch, the Defence asserted that this was introduced on 23 June 2017, nine days after the Grenfell tragedy, upon identifying defects in the internal fire compartmentation of the towers arising from works for which Mulalley was not responsible.
11.2 As to the decision to replace the cladding, Mulalley pleaded that the boards used were combustible and no longer permitted for use on buildings over 18 metres in height. The use of EPS, the Defence contended, was no longer in accordance with the then applicable Building Regulations. Accordingly, the replacement of the cladding system was in any event necessary following Grenfell in order that Martlet might comply with its duty as building owner pursuant to the Regulatory Reform (Fire Safety) Order 2005 to take such fire precautions as might reasonably be required to ensure that the towers were safe.
REPLY
By its Reply, Martlet joined issue with the causation defence and insisted that the pleaded breaches of contract were an effective cause of the claimed loss and damage. It then pleaded:
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