Rotherham Metropolitan Borough Council v Frank Haslam Milan & Company Ltd M J Gleeson (Northern) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LEGGATT,LORD JUSTICE ROCH,LORD JUSTICE WARD |
| Judgment Date | 22 March 1996 |
| Judgment citation (vLex) | [1996] EWCA Civ J0322-4 |
| Docket Number | QBENF 94/0248/B QBENI 94/0707/B |
| Court | Court of Appeal (Civil Division) |
| Date | 22 March 1996 |
[1996] EWCA Civ J0322-4
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(Mr Justice Forbes)
Before: Lord Justice Leggatt Lord Justice Roch Lord Justice Ward
QBENF 94/0248/B
QBENF 94/0290/B
QBENI 94/0707/B
MR R JACKSON with MR M CANNON (Instructed by Messrs Masons, Manchester M5 3EQ) appeared on behalf of the Second Defendant
MR M BOWDERY (Instructed by Messrs Park Nelson Thompson Quarrell, London WC2A 2JP, London Agents for Messrs Howes Percival, Northampton NW1 SPN appeared on behalf of the First Defendant
MR J UFF QC with MR A STEYNOR (Instructed by Messrs Sharpe Pritchard, Rotherham, London Agents for T C Mumford Esq, Director of Legal Services, Rotherham Metropolitan Borough Council) appeared on behalf of the Respondent
Friday, 22 March 1996
The defendants in the action, Frank Haslam Milan & Company Limited ('Haslam') and M.J. Gleeson (Northern) Limited ('Gleeson') appeal against the order of Forbes J. whereby on 31st January 1994 judgment for the plaintiffs, Rotherham Metropolitan Borough Council ('Rotherham') was entered against the defendants on the issue of liability only.
The dispute concerns the site preparation and construction of a new five storey office building now known as Norfolk House, and used as the new civic offices of Rotherham.
Rotherham as employers engaged Haslam as contractors to carry out advance site preparation work in 1979. The Contract was in the JCT Standard Form 1963 Edition, July 1977 revision with Quantities, Local Authorities Edition. The Contract Sum was £138,038 or such other sum as should become payable under the Contract. The works to be executed were described in the Specification, Contract Drawings and Bills of Quantities.
The site of Norfolk House formerly contained shops and terraced housing. The advance site preparation works carried out by Haslam included excavation over the entire plan area in order to remove old foundations and cellars, the installation of bored cast in place piles, the construction of external retaining walls and the supply and placing of imported fill material to the level approximately of the underside of the ground floor slab construction, except in the basement area.
Norfolk House is constructed with an in situ reinforced concrete frame clad in brickwork, curtain walling and aluminium windows. The ground floor slab of the building is constructed of suspended in situ reinforced concrete bearing on ground beams which in turn bear on the piles. About one quarter of the ground floor plan area towards the rear of the building has a basement beneath.
Haslam's works were carried out as part of Phase I between March and July 1979. Phase I covered site preparation and some foundation work. A formal contract was sealed on 4th July 1979 but Rotherham allege and the Official Referee found that an antecedent agreement was made in writing between Rotherham and Haslam on 23rd February 1979. Haslam dispute this.
Gleeson were employed as contractors by written contract under seal on 2nd October 1979 to construct Phase II of the development, that is, the remaining foundations of the superstructure. The Employer under this contract was Morgan Grenfell (Local Authority Services) Limited. This was an arrangement in the early 1980's which assisted local authority finances, but there was a Deed of Novation on 20th June 1983 between Morgan Grenfell, Rotherham and Gleeson by which both Rotherham and Gleeson agreed to perform and be bound by the terms of the Building Contract in every way as if Rotherham had entered into the Building Contract as Employer in place of Morgan Grenfell. Gleeson's work reached Practical Completion on 7th September 1982. No Final Certificate has been issued.
Haslam's tender was in standard form dated 22nd February 1979. It named a contract price and undertook to complete the works within 17 weeks. The reply of 23rd February 1979 from Rotherham accepted the tender. It asked for confirmation that Haslam were prepared to enter into a Bond in respect of the works, and for production of Haslam's insurance policies and that of their piling sub-contractor. It also looked forward to the execution of a formal contract.
Both contracts were governed by the JCT Standard Form of Building Contract, 1963 Edition (July 1977 revision) with Quantities (Local Authorities Edition). Both contracts therefore contained this sub-clause:
"1(1) The Contractor shall upon and subject to these Conditions carry out and complete the Works shown upon the Contract Drawings and described by or referred to in the Contract Bills and in the Articles of Agreement and these Conditions (which Drawings, Bills, Articles of Agreement and Conditions are hereinafter called "The Contract Documents") in compliance therewith, using materials …. of the quality …. therein specified, provided that where and to the extent that approval of the quality of materials …. is a matter for the opinion of the Architect …. such quality …. shall be to the reasonable satisfaction of the Architect …."
"6(1) All materials, goods and workmanship shall so far as procurable be of the respective kinds and standards described in the Contract Bills …."
"(3) The Architect/Supervising Officer may issue instructions requiring the contractor to open up for inspection any work covered up or to arrange for or carry out any test of any materials or goods (whether or not already incorporated in the Works) or of any executed work, and the cost of such opening up or testing (together with the cost of making good in consequence thereof) shall be added to the Contract Sum unless provided for in the Contract Bills or unless the inspection or test shows that the work, materials or goods are not in accordance with this Contract."
"11 (2) The term 'variation' as used in these Conditions means the alteration or modification of the design, quality or quantity of the Works as shown upon the Contract drawings and described by or referred to in the Contract Bills, and includes the addition, omission or substitution of any work, the alteration of the kind or standard of any of the materials or goods to be used in the Works …."
"12 (1) The quality and quantity of the work included in the Contract Sum shall be deemed to be that which is set out in the Contract Bills …."
By clause 30(7), subject to arbitration or other proceedings having been commenced, the Final Certificate shall have effect as "conclusive evidence that when the quality of materials or standards of workmanship are to be to the reasonable satisfaction of the Architect …. the same are to such satisfaction."
The Bills of Quantities referred in relation to Haslam to granular hardcore and in relation to Gleeson to hardcore and provided that -
"[Granular] hardcore shall be graded or uncrushed gravel, stone, rock fill, crushed concrete or slag or natural sand or a combination of any of these. It shall not contain organic material, material susceptible to spontaneous combustion, material in a frozen condition, clays or more than 0.2% of sulphate ions as determined by BS 1377."
The Bills of Quantities later referred in relation to Haslam to -
" Granular hardcore
Filling in making up levels"
and in relation to Gleeson to -
" Hardcore
Filling around foundations".
The judge recorded at page 11 of the judgment the admission on the pleadings that "…. the fill supplied by Haslam and the fill supplied by Gleeson conformed to the requirements particularised in the contract specification for granular hardcore ….".
The Bills of Quantities also provided for samples and tests:
"Samples of proposed material and workmanship shall, if required by the Architect, be submitted for approval, and these samples will be kept by the Architect who shall have power to reject all such materials and condemn such workmanship not in accordance with the approved samples …."
"The Architect may, whenever he considers it desirable, test any materials before they leave the maker's premises as well as after delivery on the site, and the Architect shall be at liberty to reject any materials after delivery should he consider them unsatisfactory, notwithstanding the preliminary test and approval of the materials at the maker's premises."
Documents before the Court evidence (a) agreement that the Clerk of Works should approve materials before their use on site, (b) confirmation that the granular fill material was satisfactory for use in cellars, but not behind retaining walls, subject to results of sulphate tests, (c) the testing of samples for sulphate content, and (d) objection to crushed slag on the ground that it did not comply with the range of gradings specified.
In February 1979 the Building Research Establishment published Digest 222, replacing an earlier Digest 142 which made no mention of steel slag. Under the heading "Hardcore" and the subheading "Materials" Digest 222 stated -
"Ideally materials used as hardcore should chemically inert and not affected by water but few of the materials available at reasonable cost satisfy these requirements completely."
It added that steel slags -
"….may contain phases (i.e. distinct forms of matter) which will cause expansion on wetting such as free lime, free magnesia or broken refractory bricks and are not recommended for fill or hardcore purposes."
The judge expressly accepted the evidence of Professor...
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