Mueller Europe Ltd v Central Roofing (south Wales) Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division (Technology and Construction Court)
JudgeMr Justice Stuart-Smith
Judgment Date22 February 2013
Neutral Citation[2013] EWHC 237 (TCC)
Date22 February 2013
Docket NumberCase No: HT-11306

[2013] EWHC 237 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Stuart - smith

Case No: HT-11306

Between:
Mueller Europe Limited
Claimant
and
Central Roofing (south Wales) Limited
Defendant

Neil Moody QC and Andrew Miller (instructed by Kennedys Solictors) for the Claimant

Graham Eklund QC and Richard Liddell (instructed by Lyons Davidson Solicitors) for the Defendant

Hearing dates: 15, 16, 17, 21, 22, 23, 24, 28, 31 January 2013

Mr Justice Stuart-Smith

Introduction

1

The Claimant ("Mueller") operates a large factory premises in Bilston, West Midlands, where it makes copper tubes. In the early hours of Sunday 9 November 2008 a disastrous fire broke out in the factory. By the time it was brought under control, part of the factory roof had collapsed and extensive damage had been caused to the fabric of the factory and its contents. At the time of the fire the Defendant ("Central") was part way through a major contract to refurbish the roof of the factory. In order to carry out its work on the roof while enabling Mueller to continue production below, Central had rigged a suspended "birdcage" scaffold just below the roof. The scaffold was boarded out and sheeted with combustible materials. The fire occurred because one or both of a pair of gas-powered radiant heaters operated and set light to the combustible materials in the scaffold. The heaters were part of the system for heating the factory and were suspended from the roof structure. The birdcage scaffold enclosed the heaters so that they were only a short distance above the upper surface of the scaffold's floor. Once enclosed by the combustible materials of the completed birdcage scaffold, the heaters were an obvious fire hazard, which should have been appreciated by anyone who turned their mind to the question.

2

By this action, Mueller claims that the contract between the parties means that Central is solely responsible for the fire and is liable to it for a sum in excess of £20,000,000. For its part, Central submits that the contract imposes sole responsibility for the fire upon Mueller. It also submits that, if it might otherwise have been liable to Mueller, its liability is avoided by the operation of the doctrine of estoppel by convention or by the doctrine of waiver. It also advances a plea of contributory negligence; and it submits that the quantum of the claim advanced by Mueller is excessive. These, in briefest outline, are the issues, which were litigated during the trial of the action and are the subject of this judgment.

PART 1 — LIABILITY

Summary of Conclusions on Liability

3

This judgment concludes that:

i) The heaters had not been routinely isolated during the course of the works. This was because Mr Henwood of Central assumed, without checking, that Mueller would be isolating them and because Mr Jones of Mueller had not read Central's method statement and assumed that Mr Henwood would inform him if anything needed to be done. If Mr Jones had been asked to provide permits to work confirming isolation of the heaters he would have checked that they were isolated before issuing the permits; and if he had been informed of occasions where heaters were found burning in close proximity to the scaffolds, he would have taken steps to prevent it happening again;

ii) There had been prior incidents of heaters operating in close proximity to the birdcage scaffolds. They were known to Mr Henwood and to Mr Smith of Mueller, but were not reported either internally within Central or to Mr Jones, who was the Mueller employee responsible for the administration of the contract: see [13–68];

iii) Central acted in breach of its contractual obligations to carry out the works safely and to report prior incidents. Mueller acted in breach of its contractual obligation to isolate the heaters: see [69–106];

iv) No waiver or estoppel by convention is established: see [107–113 ];

v) Contributory negligence is inapplicable: see [114–119];

vi) Central's breaches of contract were an effective or dominant cause of the fire and Central is liable to Mueller for the consequences of the fire: see [120–129].

The Factual Background

The Parties

4

Both Mueller and Central are substantial and reputable concerns. In a promotional video, which was shown in opening, Mueller emphasises the high standards and technical competence of its operations. It had experienced and suitably qualified in-house mechanical and electrical engineers and technicians who carried out mechanical and electrical maintenance of the factory and its plant. They answered to Mueller's Engineering Manager, Mr Jones, who was ultimately responsible for the whole of the factory, its plant and equipment. He was very experienced and had worked his way up over the years, becoming Engineering Manager in 1998. It is a mark of the extent of his responsibilities that in his evidence he said that the administration of the roof refurbishment contract only amounted to about 5% of what he had to do. While the percentage was not exact, I accept that the contract formed only a small part of his responsibilities while it was being carried out.

5

Central's promotional material emphasised its substantial size and experience, its accreditation by all relevant specialist bodies, its impressive client list and its commitment to operating to the highest standards of health and safety management. On the Mueller contract, its site manager was Mr Henwood, who had by then been involved in the roofing industry for over 40 years. He answered to Mr Thomas, a director of Central, who had particular responsibility for the health and safety aspects of projects undertaken by the company and who was responsible for the satisfactory delivery of the Mueller project.

The Contract

6

In May or June 2007, Mueller sent pre-construction information to Central 1. It did not specifically mention the gas heaters as a hazard. It identified Mr Jones as Mueller's point of contact. It said 2 that the Principal Contractor was to compile a Construction Phase Health and Safety Plan for the construction phase of the works which was to be sufficiently developed before the project could commence. The Principal Contractor was to develop the plan as part of his duties, in particular taking reasonable steps to achieve compliance with both the rules and recommendations of the plan and all legislation relevant to health and safety matters. The contractor's Health and Safety Plan was to remain an active document throughout the project.

7

Central sent Mueller a number of quotations 3 before the final one. When attempting to obtain the business Mr Tony Davies, the Managing Director of Central, gave a presentation to Mueller in the course of which he stressed Central's strong commitment to health and safety and that Central operated the highest levels of health and safety management. By that he meant that everyone involved in safety management (the contract manager and above) and the site supervisor had formal qualifications, so that Central was as good as or better than its competitors. Mr Davies' speaking notes 4 show that his presentation concentrated heavily upon Central's experience in roofing, and the steps that would be taken to reduce risk throughout the construction period. He said that Central's directors and management had signed up to ongoing training in site safety which included hazard identification, risk management and risk control; and he said that Central would produce a construction phase health and safety plan together with task specific methods of work, which would incorporate guidelines set out by the HSE and which would be passed on to all personnel verbally and in writing. Mr Davies (correctly) accepted that the purpose of method statements was to ensure that Central's work could be carried out safely; and that it was important that all of Central's staff should sign and understand its method statement; and that Mueller should have come away from his presentation with an understanding that Central could be relied upon to run the job safely.

8

The final quotation was sent on 4 September 2007 and was in the sum of £2,075,000, which was significantly more than the earlier quotes. There had by then been a number of discussions between the parties and the increase in price was, as explained by Mr Davies, because it had been decided to use birdcage scaffolds in order to enable Mueller to continue production below Central's area of work. Although the type of scaffold had been decided and there had been brief discussions about how the works would be carried out, the precise method of working that Central would adopt had not yet been discussed in detail or worked out by Central. Specifically, Mr Davies confirmed in evidence that Central did not set out until after the contract had been entered into precisely what the birdcage would look like or where it would be positioned in relation to the existing factory structures and services; and before the contract was entered into he did not discuss with Mueller the need to turn off the heaters. After the contract had been entered into he left further discussions about how the work was to be conducted to Mr Thomas and Mr Henwood.

9

The final quotation was sent to Mr Brian Parsons, Mueller's Manufacturing Director, who then conducted the negotiations which led to the signing of the

contract. On 20 September 2007 he sent a draft contract to Mr Davies. The draft contract was based on a template provided by Mueller's American parent, which Mr Parsons had amended. Central replied on 2 October 2007 and raised a number of queries by a letter from Mr Davies' co-director, Mr Jeffreys. As originally drafted, Clause 8.9 of the draft contract was headed "Damaged or Destroyed Property" and imposed two obligations...

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