Murphy & Sons Ltd v Johnston Precast Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson |
| Judgment Date | 10 December 2008 |
| Neutral Citation | [2008] EWHC 3104 (TCC),[2008] EWHC 3024 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-05-264 |
| Date | 10 December 2008 |
[2008] EWHC 3024 (TCC)
Mr Justice Coulson
Case No: HT-05-264
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Christopher Lewis and Ms Jennifer Jones (instructed by Fenwick Elliott LLP) for the Claimant
Ms Nerys Jefford QC (instructed by Mills and ReeveLLP) for the Defendant
Hearing dates: 27, 28, 29, 30 October, 3, 4, 5, 10 and 11 November 2008
The Honourable
A. INTRODUCTION
Pursuant to a main contract made on or around 21 st September 1998, Thames Water Utilities Limited (“Thames Water”) engaged the claimant, J Murphy and Sons Limited (“Murphy”) to design and carry out major water main refurbishment works, including the replacement of seven subterranean mains water pipes, in the vicinity of Holland Park Avenue in West London. This came to be called the Holland Park Project. One element of those works involved the design and construction of a tunnel between Shaft 3 (at the Shepherd's Bush roundabout) and Shaft 1 (located about 80 metres south of that, off Holland Road). Within that new tunnel was one length of 600mm glass reinforced plastic pipe (GRP), laid at the bottom of the tunnel, and another length of 900mm GRP pipe above it. Both of these GRP pipes were supplied to Murphy by the defendant, Johnston Precast Limited (“JP”). The tunnel was subsequently backfilled by Murphy with foam concrete supplied by Pro-Pump Limited (“Pro-Pump”).
On the morning of 13 th November 2004, the 900mm GRP pipe in the tunnel between Shaft 3 and Shaft 1 burst open part way along its length, at a location beneath or immediately adjacent to the roundabout. There was considerable flooding as a result. When the burst was investigated, a 21 metre void in the foam concrete was discovered, affecting the top third of the pipe. The location of the burst was almost exactly halfway along this void. Subsequently, it was decided to take up the entirety of the 900mm GRP pipe between Shaft 1 and Shaft 3. Some parts of the 900mm pipe in the location of the burst were tested the following year at the University of Surrey.
On 16 th August 2005, Thames Water commenced arbitration proceedings against Murphy claiming damages arising out of the burst water main. A large number of pleadings were produced in that arbitration, and the experts produced a joint statement. On 28 th September 2007, the arbitration proceedings were settled when Murphy agreed to pay Thames Water the sum of £3.9m in settlement of their claim. In addition, Murphy incurred costs of £270,000 in connection with that arbitration.
Murphy sought to recover these sums in separate TCC actions issued against both Pro-Pump and JP. I am told that the Pro-Pump proceedings were discontinued by consent earlier this year, although I have no documents (such as a Tomlin Order) in which any such settlement has been recorded. Reference was made at the trial to the pleadings in the Pro-Pump action. This Judgment, therefore, deals solely with Murphy's outstanding claim against JP.
There are a number of particular disputes between Murphy and JP arising out of and in connection with the burst water main. The principal issues include:
a) Whether or not there was a contract between Murphy and JP;
b) If there was a contract, the terms of that contract, and whether (on one analysis of the formation of the contract) certain terms should be excluded by operation of the Unfair Contract Terms Act 1977 (“ UCTA”);
c) Whether JP owed any duty of care to Murphy (either in the absence of a contract or operating alongside any contract) and, if so, the nature, scope and extent of such a duty;
d) Whether JP was in breach of contract and/or in breach of any duty of care;
e) Whether any such breach by JP was the cause or alternatively an effective cause of the burst water main.
There is no dispute about quantum. JP accept that if (which they deny) they were in breach of contract and/or duty, and if (which they also deny) any such breach was the cause or an effective cause of the burst water main, then the sums noted in paragraph 3 above, which total £4.17million, represent a reasonable quantification of their liability in accordance with the principle set out in Biggin v Permanite Limited [1951] 2 KB 314 CA.
I propose to structure this Judgment in the following way. At Section B, I set out some of the background to the Holland Park Project. At Section C, I deal with the contract/no-contract issue by setting out the relevant facts, the applicable principles and my analysis of the evidence. At Sections D and E, I deal with the relevant terms of the contract (including my analysis of the disputes arising under UCTA) and the issues relating to the existence, nature and scope of any duty of care owed by JP to Murphy. Thereafter, at Section F, I set out briefly the post-contract chronology, including the manufacture and delivery of the GRP pipe, the installation of the pipe, the backfilling of the tunnel, and the subsequent events following the burst in November 2004.
I then address, at Section G, the four possible causes of the burst water main and set out my conclusions as to the effective cause(s) of the burst in both factual and legal terms. Whilst it is conventional to deal with breach first, followed by causation, it seems to me that the dispute as to the effective cause(s) of the burst is the critical issue between the parties, and it would be counter-productive not to address it at this stage of the Judgment. I then go on in Section H to consider the allegations of breach of contract and/or duty against JP. It will be seen that the alleged breaches can be properly analysed by reference to the four possible causes of the burst. In Section I, I set out my views in relation to the contribution issue. There is a short summary of my conclusions at Section J.
I should say at the outset that this has been an old-fashioned TCC trial in the very best sense of the word: clearly-defined issues; courteous but effective cross examination; succinct oral and written submissions in both opening and closing; and, perhaps best of all, no dispute on quantum. This case is a good example of the sort of typically efficient TCC litigation to which Jackson J (as he then was) referred recently in Multiplex Constructions v Cleveland Bridge [2008] EWHC 2220 (TCC). 1 I am very grateful, not only to counsel, but to all those involved in the preparation and presentation of this case.
B. BACKGROUND
B1. JP's GRP Pipe
Although they are now no longer in existence, in the late 1990's JP had become well-known manufacturers and suppliers of GRP pipe. A spreadsheet running to 37 pages was prepared showing the large volume of GRP pipe manufactured and supplied by JP to various utility companies, principally in the UK. Evidence about this history of JP's manufacture and supply of GRP pipe was given by Mr Clarke, who was JP's engineering manager, and Mr Preece, JP's production manager.
From the spreadsheet and the oral evidence, the following points about JP's GRP pipe should be noted:
a) The GRP pipe was used for two distinct purposes: for potable water, and for sewage.
b) The GRP pipe was made with a standard resin. It was only if the pipe was going to be used in what the spreadsheet described as an “aggressive environment” that JP utilised a different kind of resin, called vinyl ester (“VE”) resin.
c) The GRP pipe was commonly used in conjunction with concrete and other cementitious material. This could take many forms and included, in particular, the use of concrete thrust blocks and cementitious grout.
d) The evidence was that no problems had been reported with any of these long pipe runs supplied to the utility companies noted in the spreadsheet.
Mr Clarke identified three contracts within his knowledge where the GRP Pipe supplied by JP was completely surrounded in concrete: Sewardstone; the Lea Valley improvement scheme for Thames Water; and a project in Headingley in Leeds, for Yorkshire Water.
B2. Murphy
Murphy are and were well-known civil engineering contractors. Murphy had both a tunnelling and a pipeline division within their organisation, which made them an ideal choice as the main contractor on this project. Mr Don Robertson was the Project Manager on the Holland Park Project, and answerable to both divisions. Murphy also engaged Maunsell as their design consultants.
The principal point of contact between Murphy and JP was Mr Robertson. He gave extensive oral evidence and I regarded him as an entirely fair and honest witness, doing his best to recollect events – many of which would have seemed entirely mundane at the time —that happened almost 10 years ago. He said that he had “very little” experience of GRP pipes, and that had occurred many years prior to this contract. On the one contract when he had come across GRP pipes before, he had noted a tendency on their part to squash under their own weight, so he had a particular concern about how any GRP pipe would be handled.
B3. The Main Contract and Murphy's Tender
In 1998, Thames Water sought tenders for the design and construction of major water main works in the Shepherds Bush/Holland Park area. This work, which came to be called the Holland Park Project, involved the design and construction of three shafts and a number of tunnels connecting the shafts. Shaft 1 was situated south of the Shepherds Bush roundabout, just off Holland Road. A lengthy tunnel was to be constructed between Shaft 1 and Shaft 2, which was over a mile to the east, close to Campden Hill Reservoir. Originally, it was intended that, in addition to that long tunnel, two shorter lengths of tunnel would be constructed...
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