Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd (formerly known as Dunne Building and Civil Engineering Ltd) ((in Administration))
| Jurisdiction | England & Wales |
| Judge | Mr Justice Fraser |
| Judgment Date | 16 March 2021 |
| Neutral Citation | [2021] EWHC 590 (TCC) |
| Date | 16 March 2021 |
| Docket Number | Case No: HT-2019-000372 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2021] EWHC 590 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
TECHNOLOGY AND CONSTRUCTION COURT (QB)
Rolls Building
Fetter Lane
London, EC4A 1NL
THE HONOURABLE Mr Justice Fraser
Case No: HT-2019-000372
Alexander Nissen QC (instructed by Stephenson Harwood LLP) for the Claimant
Lucy Colter and Will Cook (instructed by Weightmans LLP) for the Third Defendant
The First and Second Defendants did not appear and were not represented
Hearing dates: 16, 17 and 18 February 2021
This judgment is in the following parts:
A. Introduction
B. The Issues
C. Independent Category 3 checks
D. The British Standard
E. The Witnesses
F. The Experts' Joint Statement
G. Preliminary Issue 1 – Duty of Care H. Preliminary Issue 2 – Warranties I. Conclusions
Appendix: RNP's Terms of Business
A. Introduction
These proceedings concern the construction of 100 Bishopsgate, London EC2 (referred to as 100BG in the pleadings), a sizeable construction project in the City of London. The Claimant, Multiplex Construction Europe Ltd (“Multiplex”), was the main contractor for this project, which comprised what is called a campus of three main buildings around an enlarged public space. The site is two acres in size. Multiplex had contracted with the employer on the basis that it, Multiplex, had design and build responsibilities. Building 1 of the three is a 40 storey tower, situated on the corner of Bishopsgate and Camomile Street. The other two buildings are both 6 storeys high, each connected to Building 1 at what is called the Podium Level. This was therefore a very substantial construction project. The First Defendant, Bathgate Realisations Civil Engineering Ltd, was formerly known as Dunne Building and Civil Engineering Ltd (and is referred to in the pleadings, and all the documents, simply as “Dunne”, notwithstanding its change of name to Bathgate). I shall therefore also refer to it in this judgment as Dunne. Dunne entered into administration on 19 July 2016 1.
This is a trial of preliminary issues, set out as ordered at [11] below. They concern the legal relationship between RNP, an independent design checker engaged by Dunne, and Multiplex. There was no contract between Multiplex and RNP, and Multiplex allege that RNP owed it certain duties of care, and also that RNP had provided warranties to Multiplex. Accordingly, Multiplex seeks to advance a claim directly against RNP, notwithstanding the lack of any direct contractual link between them.
Dunne was engaged as a sub-contractor to Multiplex for the design and construction of the concrete package of works to Building 1 at 100BG, which included both the sub-structure and superstructure works. This included the concrete core, which was constructed, level by level, using what is called a slipform rig, which is part of the temporary works. The slipform rig is a constantly moving piece of equipment that permits the concrete core to be constructed incrementally. Originally Dunne was engaged by Multiplex in 2011, but the project was put on hold by the employer until 2015. In 2015 Multiplex was given instructions by the employer to proceed with the project, and therefore Dunne was instructed by Multiplex to proceed in 2015 too. The identity of the employer is not relevant to this case, nor is the period 2011 to 2015 when the project was on hold.
The Sub-Contract terms between Multiplex and Dunne are not in dispute. It incorporated the JCT Design and Build Sub-Contract 2005 Edition, Revision 2, 2009, subject to certain modifications. The Sub-Contract contained the following material terms:
1. By Clause 2.13.1, Dunne warranted and understood that it had “exercised and shall continue to exercise all the reasonable skill, care, and diligence to be expected of a properly qualified and competent architect or other appropriate designer experienced in designing work of a similar size, scope, nature and complexity to the Sub-Contract Works”;
2. By clause 2.13.2, Dunne warranted and undertook that “using the standard of skill, care and diligence set out in clause 2.13.1”:
(a) “The various elements of the design of the Sub-Contract Works shall be properly co-ordinated and integrated”; and
(b) “The completed Sub-Contract Works shall comply with the Contractor's Requirements, Statutory Requirements and any performance specification or other requirements under this Sub-Contract”.
3. By paragraph 21.16.18; Part 1 of Contractor's Requirements, and in relation to “Site Safety Environmental Health and Safety Plan”, Dunne stated that it would ensure that all “temporary works and structural work method statements and temporary works design submissions should as a minimum receive a complete and independent third party check”.
4. By paragraph 34.2.11; Part 1 of Contractor's Requirements, the parties agreed that “The Sub-Contractor shall be responsible for submission of all details of any temporary works… needed to facilitate construction. All temporary works must be 3 rd party checked by a qualified person. Details shall be submitted to the Contractor at least seven days before proposed erection. No temporary works shall be commenced without written approval of the Contractor”.
The concrete core is part of the permanent works, and the slipform rig used to construct it is part of the temporary works. Dunne had, due to the terms of its sub-contract with Multiplex, full design responsibility both for the concrete core, and for the temporary works, and this is agreed by the parties. The Second Defendant, BRM Construction LLC (“BRM”) was a specialist design and engineering consultancy, who was appointed by Dunne in respect of the design of the slipform rig, under a Consultancy Agreement executed between Dunne and BRM on or about 18 November 2015. BRM was based in Dubai and does not appear to have been insured. Another entity, RNP Associates Ltd (“RNP”), was engaged by Dunne to provide independent third party design services. RNP was a professional design checking consultancy based in London. It entered liquidation on 1 October 2018. RNP was insured.
The Third Defendant, Argo Global Syndicate 1200 (“Argo”), are RNP's insurers. By reason of the Third Parties (Rights against Insurers) Act 2010 (“TPRAI Act”), Multiplex claims that the rights RNP had to be indemnified by Argo were transferred to Multiplex. RNP's liability to Multiplex has not yet been determined, but is said to arise as a result of the independent design check performed by RNP on the design for the temporary works. Such an independent third party check is required under the relevant British Standard, namely BS 5975 (3 rd edition, effective from 31 December 2008). It was also, as has been seen, required by Dunne under the terms of Dunne's sub-contract with Multiplex, namely in paragraph 34.2.11; Part 1 of the Contractor's Requirements (which is set out at [5](4) above). RNP was the independent third party design checker for the design of the slipform rig, and provided what is called a Category 3 design check on that design. RNP was engaged by Dunne to perform this design check for a modest fee of £3,978, in circumstances which I explain further below.
The heart of the case as a whole arises as a result of what occurred after Dunne went into administration. Multiplex terminated Dunne's sub-contract, as it was permitted to do, and engaged an alternative specialist sub-contractor, Byrne Brothers Ltd (“Byrne”) to replace Dunne, and to complete the sub-contract works. At that point in mid-2016, Dunne had performed the concrete core slipform works to Building 1 up to level 7, out of the 37 levels required. It is said by Multiplex that those works had progressed only very slowly, but nothing turns on that in terms of resolution of the preliminary issues and any claim against Argo. When Byrne was first engaged, the first thing that it did was to investigate both the works to date, and the slipform rig as constructed on site. Byrne concluded that both were defective. Indeed, not only was Byrne not prepared to take responsibility for the performance of the slipform rig, but Byrne concluded that in some respects it was unsafe and should not be used. Multiplex therefore had the rig replaced, as part of wider works considered necessary at that time in order to proceed with Byrne, and to continue the project. The works thereafter proceeded with Byrne completing those the subject of the sub-contract between Multiplex and Dunne.
The costs of Multiplex replacing the slipform rig, and taking other remedial steps, form part of the substantial losses overall that Multiplex claims it has suffered as a consequence of the various breaches by each of Dunne, BRM and RNP in respect of the works at 100BG. The total claim is pleaded in the sum of over £12 million, including remedial works, delay, disruption and consequential losses. Default judgments have already been obtained by Multiplex against both Dunne and BRM. The limit on the policy provided by Argo is £5 million, and given RNP's liquidation, any recovery against that defendant is said by Multiplex to be limited to that figure.
Multiplex claims that it is entitled to proceed directly against Argo to recover under the policy because RNP owed it, Multiplex, duties of care and/or had provided warranties direct to Multiplex. It also relies upon the terms of the TPRAI Act, but nothing arises in that respect under the...
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