RSK Environment Ltd v Hexagon Housing Association Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 30 July 2020 |
| Neutral Citation | [2020] EWHC 2049 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-000425 |
| Date | 30 July 2020 |
[2020] EWHC 2049 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Rolls Building
Fetter Lane, London, EC4Y 1NL
Mrs Justice O'Farrell DBE
Case No: HT-2019-000425
Paul Cowan (instructed by Kennedys Law LLP) for the Claimant
Paul Reed QC and Emma Hynes (instructed by DWF Law LLP) for the Defendant
Hearing date: 16 th June 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This claim concerns a geotechnical investigation and report prepared by the Claimant (“RSK”) in respect of a site at 52–54 Kings Highway in Plumstead, London. The Defendant (“Hexagon”) carried out a residential housing development at the site. Hexagon asserted a claim in negligence against RSK for damages, following ground collapse at the site causing damage to the housing.
By these Part 8 proceedings, RSK claims declaratory relief that, if and insofar as RSK assumed a common law duty of care to Hexagon in respect of the ground investigation and report, the nature, scope and extent of such duty was circumscribed by the limitations of liability provisions contained in RSK's proposal document.
Hexagon opposes RSK's claim for relief on the grounds that use of the Part 8 procedure is inappropriate in all the circumstances; further, Hexagon was not bound by the limitations of liability in RSK's proposal because they were not brought to Hexagon's attention and it did not agree to be so bound.
Background
By letter dated 21 November 2013 from RSK to Skillcrown Homes Ltd (“Skillcrown”), RSK submitted its proposals and budget costs for undertaking geoenvironmental and geophysical investigations at the site:
“Based on the information of the proposed development available to us, our recommended approach to providing advice on geotechnical and geoenvironmental/contamination aspects or the site is detailed below.
We would recommend a phased approach to investigating the presence of mine workings beneath the site, as outlined below:
1. A desk based review of all available information on mine workings in the area;
2. A non-intrusive geophysical micro-gravity survey of the site to identify any possible voids or anomalies;
3. Sinking of three percussive boreholes to confirm the general ground conditions and depth to Chalk;
4. A targeted intrusive investigation of any anomalies using dynamic probing techniques for shallow anomalies and rotary probing techniques for anomalies at depth; and
5. If any voids are encountered, downhole CCTV camera and laser surveys could be employed to assess their condition and extent. (Please note that we have not made allowance for conducting these surveys within the current schedule of costs).”
RSK stated that the results of the investigation would be compiled into a combined factual and interpretative site investigation report.
Having set out the proposed scope of the work and its estimated fees, RSK stated:
“The fee estimate is subject to acceptance of the RSK Group Terms & Conditions, a copy of which is attached, and we cannot proceed with the work until such acceptance has been confirmed in writing or alternative conditions agreed with us and confirmed in writing.”
RSK's terms and conditions were enclosed with the proposal letter and included the following provisions:
“These terms and conditions (“Conditions”) are to be read in conjunction with the RSK Proposal.
…
Definitions and Interpretation
1. In these Conditions:
…
“Client” means the contracting party for whom Work is performed by RSK and the party responsible for payment of the Fee;
…
“Work” means the scope of work detailed in the Proposal;
…
RSK Obligations
4. RSK will exercise reasonable skill, care and diligence in the performance of the Work and in accordance with the provisions of the Proposal. RSK will undertake the Work in accordance with current health, safety and environmental legislation available at the time the Contract is agreed.
…
Liability Limitation
6. This Condition 6 sets out the entire financial liability of RSK (including any liability for the acts or omissions of its employees, agents, consultants and subcontractors) to the Client in respect of any breach of the Contract; any use made by the Client of the Work, the Deliverables or any part of them; and any representation, statement or tortious act or omission (including negligence) arising under or in connection with the Contract.
6.1 All warranties, conditions and other terms implied by statute or common law are, to the fullest extent permitted by law, excluded from the Contract.
6.2. Nothing in these Conditions limits or excludes RSK's liability for death or personal injury resulting from negligence, or for any damage or liability incurred by the Client as a result of fraud or fraudulent misrepresentation by RSK.
6.3. Subject to Conditions 6.1 and 6.2:
(a) RSK shall not be liable for Indirect Loss;
(b) The total liability of RSK under or in connection with the Contract for all claims, whether in contract, tort (including negligence), breach of statutory duty or otherwise, will be limited to the lesser of (i) £1 million; or (ii) the amount recoverable by RSK under professional indemnity insurance maintained in accordance with these Conditions and in force at the time the claim, or (if earlier) circumstances that may give rise to the claim is, or are, reported to the insurers in question;
(c) RSK's liability to the Client shall be limited to such proportion of the Client's loss and damage as it would be just and equitable for RSK to pay having regard to the extent of its responsibility for the loss and damage and on the assumption that (i) all other consultants contractors, subcontractors, project managers and advisers engaged in connection with the project have provided contractual undertakings on terms no less onerous than those set out in this Contract to the Client in respect to their obligations in connection with the project; and (ii) all the parties referred to in this clause have paid to the Client such proportion of the loss or damage that it would be just and equitable for them to pay, having regard to the extent of their responsibility for the loss or damage;
(d) Subject to the other limitations contained in this Condition 6, if RSK is in breach of its obligation under Condition 4 to exercise reasonable skill, care and diligence in the performance of the Work, RSK's liability will be limited to the reasonable cost of correcting or completing the relevant part of the Work or, if necessary, the cost of obtaining replacement work of equivalent standard as that provided for in the scope of the Work.
6.4. No action or proceeding for any breach of this Contract will be commenced against RSK after the expiry of six years from the date of the completion of the Work, as indicated by the provision of the final Deliverable.”
The proposal was formally accepted by Skillcrown on 4 December 2013 by signing the agreement form sent with the proposal letter, stating:
“The scope of services, costs, and Terms and Conditions for the proposed transaction as described in the RSK proposal is hereby accepted. RSK Environment Limited is authorised to perform the services as specified in the Scope of Work for the client below.”
By email dated 28 April 2014 from Skillcrown to RSK, Skillcrown notified RSK that Hexagon was happy to wait for the final version of the report to be in joint names.
On 30 April 2014 RSK published its site investigation report, in which the client was identified as Skillcrown and Hexagon.
The general notes to the report included the following:
“RSK Environment Limited (RSK) has prepared this report for the sole use of the client, showing reasonable skill and care, for the intended purposes as stated in the agreement under which this work was completed. The report may not be relied upon by any other party without the express agreement of the client and RSK. No other warranty, expressed or implied, is made as to the professional advice included in this report.”
The introduction to the report included the following:
“RSK Environment Limited (RSK) was commissioned jointly by Skillcrown Homes Limited and Hexagon Housing Association Limited to carry out a geo-environmental assessment of the land at Brickfield Cottages, Plumstead, London, SE18 2BJ. It is understood the site is being considered for redevelopment with low rise housing and flats.
This report is subject to the RSK service constraints given in Appendix A.
…
The project was carried out to an agreed brief as set out in RSK's proposal (ref. 371086 L01 (01), 21 November 2014)…”
The service constraints set out in Appendix A included the following:
“1. This report and the site investigation carried out in connection with the report (together the “Services”) were compiled and carried out by RSK Environment Limited (RSK) for Skillcrown Homes Limited and Hexagon Housing Association Limited (the “client”) in accordance with the terms of a contract between RSK and the “client”, dated 4 December 2013. The Services were performed by RSK with the skill and care ordinarily exercised by a reasonable environmental consultant at the time the Services were performed. Further, and in particular, the Services were performed by RSK taking into account the limits of the scope of works required by the client, the time...
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...Try Infrastructure Ltd v Mott Macdonald [2008] EWHC 1570 (TCC) per Akenhead J at [190]; RSK Environment Ltd v Hexagon Housing Ltd [2020] EWHC 2049 per O'Farrell J at [31]–[47] and Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd [2021] EWHC 590 per Fraser J a......