Peak Construction (Liverpool) Ltd v Mckinney Foundations Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SALMON,LORD JUSTICE EDMUND DAVIES,LORD JUSTICE PHILLIMORE |
| Judgment Date | 01 July 1970 |
| Judgment citation (vLex) | [1970] EWCA Civ J0701-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 July 1970 |
[1970] EWCA Civ J0701-2
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Salmon
Lord Justice Edmund Davies and
Lord Justice Phillimore
MR D. GARDAM, Q.C. and MR I.N.D. WALLACE, (Instructed by Messrs. Herbert Smith & Co,) appeared on behalf of the Appellants (Defendants).
MR ANDREW RANKIN, Q.C. and MR STANLEY BRODIE, (instructed by Messrs Layton & Co. of Liverpool) appeared on behalf of the Respondents (Plaintiffs).
In 1963 the Liverpool Corporation decided to embark upon the erection of three multi-story blocks of flats. In each case the plaintiffs were to be the main contractors. The first or pilot block was to be begun in February, 1964, the second block three months afterwards and the third block three months after the second block. This appeal concerns only the first of these blocks.
On the 17th February, 1964 the Corporation entered into a written contract with the plaintiffs under which the plaintiffs agreed to build a 14-storey block of 58 flats, together with 33 garages, at East Lancashire Road in Liverpool for the price of £232,521. The form of this contract has been much criticised during the course of the argument - and not without justification. Indeed, if a prize were to be offered for the form of a building contract which contained the most one-sided, obscurely and ineptly drafted claused in the United Kingdom, the claim of this contract could hardly be ignored, even if the R. I.B.A. form of contract was amongst the competitors. Fortunately, however, nothing of much importance turns upon the construction of the clauses relevant to this appeal. The contract called for the completion of the work in 24 months (Clause 21), and appointed the Corporation's Director of Housing to be the architect in charge of the contract works.
I will now read the material parts of the relevant clauses. Clause 2: "Should any discrepancies appear, or misunderstanding arise as to …. the proper execution of the works …. or any other matter or thing whatsoever arising out of the contract the same shall be explained by the Architect and such explanation shall be final and binding upon the Contractor, and the Contractor is to execute the works according to such explanation and without charge being payable by the Corporation."
Clause 4: "The works …. shall be executed in the best and most substantial and workmanlike manner, with materials ofthe best and most approved quality of their respective kinds …. and to the full and entire satisfaction of the Architect according to the instructions and directions which the Contractor may from time to time receive from the Architect…."
Clause 16: "The Architect……shall have full power at any time to reject any or all of the materials or workmanship which may seem to him defective …. and the Contractor shall I remove forthwith all such materials or workmanship so rejected …. and shall replace the same with such better and more efficient quality and description of materials and workmanship as shall be satisfactory to the Architect."
Clause 20: "The Contractor shall without recompense, claim or demand, delay or suspend the progress of the works, or any part thereof, whenever and for such time as shall be required by the Architect …."
Clause 22: "Time shall be considered as of the essence of the Contract on the part of the Contractor, and in case the Contractor shall fail in the performance of the works or any part thereof by and at the times herein mentioned or at other the day or days to which such time or times may be extended by the Architect under the Contract, the Contractor shall be liable to pay the Corporation, as and for liquidated damages, the sum of 25/-d per flat for each and every week or part of a week which may elapse between the time appointed for completion and the actual time of completion …."
Clause 23: "If by reason of any enlargements or other additions to the works, or in consequence of any local combination of workmen or general strikes or lock-outs forcemajeure or other unavoidable circumstances the Contractor shall in the opinion of the Architect have been unduly delayed the Architect shall make by writing under his hand such extension of time …. as to him may seem reasonable …."
Clause 27: "The amount payable to the Contractor by the Corporation under the Contract shall be the Contract price, but subject to such additions or deductions (if any) as are in the specification or herein specified."
Clause 40, which I need not read, provided for arbitration in the case of any dispute or difference arising between the Corporation or the architect on their behalf and the plaintiffs relating to any matter arising out of the contract.
The tender, which war; a contractual document, contained the following clause: "We agree that the above tender 'B' shall be subject to variation due to any authorised net increase or decrease in the Standard hates of Wages, Contributions to Annual and Public Holidays, Travelling Expenses, Lodging Allowances, in accordance with the Working Rule Agreements for the District; and National Insurance Contributions which may take place after the date of the tender."
The defendants were the nominated sub-contractors to design and construct the foundation piles for all the three blocks of flats to which I have referred. The sub-contract price for the piling work at East Lancashire Road was between £10,000 and £11,000. The piles were designed by the defendants, and the piling work was started in May, 1964. The defendants left the site, having supposedly completed the work satisfactorily, some six weeks later. The piles had heavily reinforced concrete cores and concrete skins; they averaged about 42 feet in length. There were 62 of them to support this block of flats, which was 68 feet square. Twenty-four of these piles were in the centre and 38 on the perimeter of the site. The defendants were followed on to the site by Truscon Limited. Their task was to build a heavily reinforced concrete raft 3 feet 6 inches deep over the central piles, to cap the perimeter piles and construct the necessary ground beams. The central and perimeter piles would bear the weight of the central core walls and the perimeter wallsrespectively. In August Truscons discovered a comparatively minor fault in one of the central piles. This was rectified by the defendants and the central raft was duly completed.
On the 2nd October Truscons by chance discovered a very grave fault in one of the perimeter piles - pile No. 19. For all practical purposes it was useless. This defect was caused by the defendants' use of unsuitable material and by their faulty workmanship. It clearly constituted a serious breach of contract on their part. Everyone concerned was naturally very alarmed. Had the defective pile gone unnoticed it would probably have caused a serious crack in the completed structure. Moreover, the chance discovery of this defective pile suggested that there might well be other similarly defective piles which, unless discovered and replaced, might cause the whole block of flats to collapse, with serious consequences. There might have been much loss of life, for which the Corporation, the plaintiffs and. the defendants would have been blamed. They would not only have suffered gravely in reputations, but would no doubt all have been liable for enormous damages.
There was a meeting on the site on the 6th October between representatives of all the parties concerned. Everyone, agreed in principle that an investigation of the piles was urgently required and that the necessary remedial work should be carried out as expeditiously as possible. In the meantime, all further work on the site was suspended. It was obvious that tie defendants' breach of the sub-contract in relation to pile No. 19, and possibly in relation to other piles, would cause sons delay in the completion of the main contract works. Between the 6th October and the 2nd November the defendants replaced pile No. 19 with two sound piles and carried out an examination of the other 16 uncapped piles. Twenty-one of the perimeter piles had already been capped by Truscon Limited before the suspension of work. The defendants discovered surface defects in some of the 16 pilesthey examined. None of these defects could have affected the stability of the structure, but, quite rightly, they were repaired. This was the position when a further meeting took place between all the parties on the 2nd November. The representatives of the Corporation did not express themselves as satisfied with the repairs done to the 16 uncapped piles to which I have referred, and it was generally considered that the 21 capped piles should also be investigated. The architect asked the defendants to put forward proposals to provide a completely satisfactory foundation for the building. He said that these proposals would be put before the city building surveyor for his approval, and stated that both he (the architect) and the plaintiffs would prefer to have an independent opinion in support of the defendants' proposals. On the 17th November another meeting took place between representatives of the plaintiffs, the defendants and the Corporation. The architect who headed the Corporation's team explained that the city building surveyor had net been invited to attend as "it was intended to arrive at a positive solution to the problem raised by the defective piling before approaching the city building surveyor for his observations
It is apparent from the correspondence that there were acute differences of opinion between the city building surveyor, on the one hand, and the architect, and indeed everyone else, on the other. The city building surveyor had set his face against any independent investigation and any solution except the one which...
To continue reading
Request your trial
-
City Inn Limited V. Shepherd Comstruction Limited
...McKenzie & Co LtdSC 1967 SC (HL) 63; 1967 SLT 229 Peak Construction (Liverpool) Ltd v McKinney Foundations LtdUNKUNK [1970] 1 BLR 111; 69 LGR 1 Percy Bilton Ltd v Greater London CouncilWLRUNKUNK [1982] 1 WLR 794; [1982] 2 All ER 623; 20 BLR 1 Porteous' Trs v Porteous 1991 SLT 129 Raphael an......
-
Re Sanpete Builders (S) Pte Ltd
...not be bound to pay any liquidated damages. This was stated by Salmon LJ in Peak Construction (Liverpool) Ltd v McKinney Foundation Ltd [1970] 69 LGR 1 at p 12: ... it is clear that even if cl 23 had provided for an extension of time on account of delay caused by the (employer), the failure......
-
Ng Koon Yee Mickey v Mah Sau Cheong
...Pte Ltd, The v Pacific Motor Credit (Pte) Ltd [2015] 3 SLR 695 (refd) Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 69 LGR 1 (refd) Percy Bilton Ltd v Greater London Council [1982] 1 WLR 794 (refd) Petroplus Marketing AG v Shell Trading International Ltd [2009] 2 Lloyd......
-
Ying Ho Co Ltd And Others v The Secretary For Justice
...to invoke, as he did, the support of Peak Construction (Liverpool) Ltd v. McKinney Foundations Ltd (1970) 1 BLR 111 (also reported at (1970) 69 LGR 1), Astilleros Canarios SA v. Cape Hatteras Shipping Co Ltd [1982] 1 Lloyd’s Rep 518, and Maskell v. Horner [1915] 3 KB 106 for reasserting the......
-
Construction & Infrastructure - What's News? - 24 April 2012
...according to rectification measure rather that diminution in value Peak Constructions (Liverpool) v McKenney Foundations Limited (1970) 69 LGR 1 followed SMK Cabinets v Hili Modern Electrics Pty Ltd [1984] VR 391 followed Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 a......
-
Construction & Infrastructure - What's News - 12 May 2015
...139 Olindaridge Pty Ltd & Anor v Tracey & Anor [2014] QCAT 207 Peak Constructions (Liverpool) v McKenney Foundations Limited (1970) 69 LGR 1 SMK Cabinets v Hili Modern Electrics Pty Ltd [1984] VR 391 at 397 Turner Corporation Limited (Receiver and Manager Appointed) v Austotel Pty L......